Chapter 6: Product Mix Strategies

A. Product Line
Product line group of products, that are fairly closely related
- road group of products, intended for essentially si!ilar uses " ha#ing si!ilar
physical characteristics
ex. $i!%erly clar& producing se#eral lines of personal-care products. $i!%ies
diaper is one of the product lines it o'ers to the !ar&et
. Product Mix
Product !ix set of all product lines o'ered for sale %y the co!pany
- includes all product o'ering of co!pany, no !atter ho( unrelated theyh !ay %e
ex. )rancisco !otors !anufactures and sells #arieities of *eepneys, truc&s,
A+,-s and auto!oti#e parts
Strucutre of a product !ix: ./012 3 04P12
.idth !easured %y nu!%er of product lines carried
0epth #ariety of si5es, colors and !odels o'ered (ithin each product line
C. Product Strategies
-Strategies to e'ecti#ely !anage product !ixes:
6. Product Positioning
product-s position i!age the product pro*ect in the !inds of the consu!ers #s
other products !ar&eted %y sa!e co!pany
Positioning strategies:
6. Positioning in relation to a co!petitor
1he %est position is 0irectly against the co!petitor
ex. eer na eer of Asia %re(ery #s. San Miguel eer of San
Miguel Corporation
7. Positioning in relation to a product class
Associating its product (ith 8or disocciating it fro!9 a product class
ex. -Made in :apan-, -lo(-calorie-, -en#iron!ent-friendly-, Pepsi-
Cola and Coca-cola products as diet soft drin&s
;. Positioning in relation to a target !ar&et
)ocal point in positioning the product is 1arget Mar&et
ex. 1oyota, $ia and 2yundair !anufacturing #ans for fa!ily use
after price of gasoline rose and fa!ilies shifted fro! %uying
cars to #ans
<. Positioning %y price and =uality
So!e retails stores are &no(n for their high =uality !erchandise (hile
so!e are position for lo( price and lo(er =uality scale
ex. >ustan-s, Shangrila #s. +ni(ide (arehouse, 1utu%an center
7. Product Mix 4xpansion
6. Product line extension
co!pany adds a si!ilar ite!s, to an existing product line, (ith the
sa!e %rand na!e
Co!pany increases product 04P12
7. Product !ix extension
Co!apny adds a ne( product line, to co!pany-s present assor!ent of
products
Co!pany expands product ./012
;. 1rading up and trading do(n
expansion of product line " change in product positioning
1rading up adding a higher-priced product to a product line to attract
%igger nu!%er of consu!ers -purpose: %oost i!age or prestige of
product " increase sale of existing lo( priced products
1rading do(n adding lo(-priced ite!s to its line of prestigious
products -purpose: encourage people (ho can-t a'ord orginal product
to %uy ne( product cos it carries so!e of status?prestige of the higher-
priced product
<. Product alteration
/!pro#ing an already existing production
More proifta%le, less ris&y " less costly #s. de#eloping a co!pletely
ne( production
Many co!panies redesign?refor!ulate their products to gi#e the! a
ne( appeal
ex. sanitaty nap&ins redesigned to %e less %ul&y and !ore
a%sor%ent, po(dered !il& refor!ulated to increase nutritional
#alue
@. Product !ix contraction
4li!inating an entire product line or si!plifying the assort!ent (?in a
line
Purpose: to (eed out lo(-proAt and unproAta%le products
4xpected result: higher proAts fro! fe(er products
0. rands and 1rade!ar&s
rand na!e, ter!, sy!%ol, special design, or co!%ination of these ele!ents, intended to
di'erentiate the goods or ser#ices of a co!pany, fro! those of its co!petitors
rand na!e #er%al part of the %rand
-consists of (ords, letters, nu!%er that can %e uttered or #ocali5ed
rand !ar& part of the %rand that appears in the for! of a sy!%ol, design, distincti#e
coloring or lettering
- recogni5ed %y sight %ut CABBC1 %e uttered or #ocali5ed
6. Characteristics of Dood rand na!es
6. Suggesti#e of the product-s characteristicsEits %eneAts, use or action
suggest desira%le %eneAts
ex. Mr. clean, Softee, Manila Pure, eauty >est, Carefree
7. 4asy to pronounce, spell, and re!e!%er
si!ple, one-sylla%le na!es
ex. tide, co&e, *oy, raid, axe
;. 0istincti#e
so!e %egin their %rand na!es (? ad*ecti#es
ex. Allied an&, +nited Airlines
ex. S(atch, A#on, Bo&ia, Co&e, porsche
<. Adapta%le to ne( products that !ay %e added to the product line
Bo&ie %rand na!e for !o%ile Phones
Ligo &no(n for sardines lot its sales appeal (hen it expanded its line
to %ath soaps
@. Capa%le of %eing registered and legally protected
Deneric na!es 8ex. /cecrea!9 cannot %e registered as a %rand na!e
nor legally protected
Ba!es already registered and used %y other Ar!s cannot %e
registered and legally protected
7. rand 4=uity
rand 4=uity - #alue a %rand adds to a product
ex. ,ol#o, Bi&e, >olex %rand na!es add #alue to a product, %uyers (ould pay
!ore for /M and Co!pa= %rands #s. Apple and 0ell %rands
Creating %rand e=uity process of creating loyal follo(eres (ho pro#ide (ord-of-!outh
support and add #alue to the product
;. Protecting a rand na!e
-So!e %rands %eco!e so (ell accepted that the %rand na!e is su%stituted for the generic
na!e of the product 8ex. Collophane, lioneleu! and nylon all patents ha#e expired %ut
pu%lic continue to use the %rand na!es as generic na!es9
-rands that ha#e %eco!e genereic 8not yet legally9: Ferox, %and-aid, scotch tape, shellane
-1o pre#ent loss of distinticiti#e character of %rand na!e and a#oid falling into a generic
na!e, ; strategies:
6. 4nsuring that the (ords Gtrade!ar&H or leters G1MH appear ad*acent to the %rand
na!e
7. 1o use 7 na!esI co!pany-s na!e 3 %rand na!e or %rand na!e 3 generic na!e
ex. :ohnson-s %a%y po(der, San Miguel %eer, Luc&y Me Pancit
Canton
;. /ncorporating into the% rand na!e a distincti#e signature or logo
4. Pac&aging
Pac&age an extension of the product o'ered for sale
-contained or (rapper of the production
Pac&aging refers to all acti#ities of designing and producing the container or (rapper for a
production
(? ser#ices container is BC1 tangi%le pac&age %ut the PAC$AD4 C) ,AL+4 for the
consu!er
Purposes of Pac&aging:
6. )or safety and utilitarian purposes
pac&aging protect a product on its (ay fro! producer to the Anal consu!er
ex. child proof containers of !edicines
pac&aging also protect product fro! spillage, spoilage " e#aporation
7. )or a co!pany-s !ar&eting progra!
pac&aging helps identify a product " pre#ents su%stitution of co!petiti#e
products
J points of purchase, pac&age ser#es as Silent Sales Person
)eatures of pac&age adds sales appeal
ex. no-drip spout, resua%le *ar, pu!p dispenser, attached cap
;. )or increased proAt and sales #olu!e
pac&aged goods are usually !ore attracti#e K help encourage additional
sales
4asy to handle pac&ages !in!i5e losses fro! da!age K helps cut
!ar&eting costs
). La%eling
la%el paper or plastic stic&er attached to a can of sardines or a co'ee *ar
- part of a product that carries infor!ation a%out the product or the seller
-!ay %e part of a pac&age or tag directly attached to the product
)unctions of a la%el:
6. Carries the %rand na!e and identiAes the product
7. Carries infor!ation a%out the product
;. 2elps pro!ote the product through its attracti#e designs and colors
+ni#ersal Product Code 8+PC9 series of %lac& %ars reada%le %y optical scanners
La%eling la(s of di'erent countries di'er
D. Cther /!age-uilding )eatures
Additional product attri%utes:
6. Product 0esign
distincti#e design !ay %e the only feature that di'erentiates a product fro! its CCMP41/1C>S
engineering design and appearnce design contri%utes to the product-s pro!otional appeal
good design i!pro#es salea%ility of a product %y !a&ing it easier to handle and operate
7. Color
signiAcant co!ponent in custo!er-s acceptance?re*ection of production
does not gi#e a selling ad#tange to the product cos !any Ar!s o'er color
$no(ing (hen to change colors is the selling ad#antage
ex. Christ!as decors colors in a certain year (ere sil#er and %lue
;. Product Luality
=uality le#el of a product should %e co!pati%le (ith its intended use
ex. s=uid %alls does not necessarily ha#e to use grade A s=uid
Maintaining =uality of product e#en (hen production increases successful !anage!ent of
=uality
Co!pany should underta&e continuous -=uality-i!pro#e!ent progra!- to achie#e this
<. .arranties
+sing (arranties as pro!otional de#ices to sti!ulate sales, %y reducing consu!ers- ris&s
Purpose of (arranty assure %uyers that they (ould %e co!pensated, in case the product does
not perfor! accdg to expectations
@. After-sales ser#ice
Ar!s o'er post-sales ser#ices such as !aintenance and repair
Purpose to satisfy custo!ers " to increase re#enues and %uild relationships
ex. Ctis, !a&ers and sellers of ele#ators, deri#e a lot of re#enue fro! repair and
!ainteneance ser#ice contracts