Brand & Product Management

How to classify products and the concept of product mix.

Throughout the lecture, I will explain why the above concepts are important to develop and
implement our marketing plan. We are here at the centre of beautiful Madrid. And we just
enter a well-known brand in Spain called Fnac. This is a place where you can get all your
entertainment, your culture, and your technology. We will use this as a base for today's
lecture.
I will begin by sharing some of the criteria commonly used to categorize products. Please
know that this is only a small list, but I will provide you with the reason why we need to
learn this topic.
For example, products can be categorized by the way clients purchase them.

 Convenience products are bought normally, without being given much thought, and are
typically available in many channels. So, and if not, we might find playing cards.
 Then we have need products, they require more planning and there is much more
product comparison before the purchase is done. For example, like a dining room at Fnac
we might find a mobile phone.
 Then we have specialty products. Their demand is more in elastic and depending on the
category there is less comparison before the purchase because they are sold through
specific channels. Consumers instead choose specialty goods primarily based on quality
or in style or viscosity or personal preference. Sellers of specialty good do not need to be
conveniently located because buyers will seek them out even if involves considerable
effort. For example, a car at Fnac, we can find drones.
Some goods may be considered need goods by some buyers and specialty goods by other
buyers. The key is to understand your target customer.

So, let us discuss other criteria commonly used to categorize products. By the level of
involvement in their purchase.
 Low involvement means that they would require little discussion from the potential
client. For example, hamburgers or fast food and if not, we can find toner for our printing
needs.
 High-involvement products, they require time and effort from customer during the
purchase process. For example, your first home at Fnac, I think a TV, or a smartwatch
requires high involvement.

Before I continue sharing other criteria, I want to see if you can begin to understand the
implications of why we need to understand this categorization. Think about it what kind of
marketing and sales support do you think that is needed to sell a convenience versus a need
versus a specialty product? What about a low involvement versus a high involvement.
I hope that you came into the conclusion that it is completely different because consumers
will require much more information, hand holding, and product credibility in the latter of
each of the mentioned criteria. It translates into human and financial resources to support
your product.
Let us look at other criteria commonly used, by the benefits they provide consumers. It
could be functional benefits paired up with rational and logical benefits. For example, at
Fnac we can find paper clips. But it could be also emotional benefits, products that satisfy
the ego expression needs of consumers. For example, a diamond ring. We could also classify
them by their physical state, tangible products consumers can touch, or intangible, services,
events, ideas. They do not necessarily result in the possession of an end product like
lodging, legal services, consulting, etc. At Fnac, you could buy, for example, online remote
assistance for your PC.
But in order to draw conclusions that will impact how you market them; you should look at
products in the categorization using more than one dimension. For example, functional, and
tangible, like a cup of coffee. Here at Fnac, we could find example of a laptop or functional
and intangible, like your telecom service, which they also sell here, by the way.
Or emotional and tangible, like a purse or a watch. Or emotional and intangible, like.
Another important element to consider, is our products can offer more than one benefit.
We will use this later on when we talk about the product’s life cycle.

The essential product is what customers are really buying their direct benefit. The coffee at
Starbucks or the camera at F Knack. The augmented product are these additional or
secondary benefits. The WiFi, or the app, at Starbucks. The insurance that might come with
our camera, or the photography class that is included when you purchase it. In summary,
when launching new products, you should think of having clarification of which consumer
need you are trying to satisfy and what type it is. Secondly, verifying that your essential
product is capable of satisfying that consumer-specific need. Otherwise, redesign your
product's main benefit. If you have an online product you can also prototype and test and
learn, so you can adapt your product by listening to customers. Third, understand how to
recommend your essential product to create the consumer's experience more gratifying and
protect your competition down the line.

Now let us talk about the concept of product mix. The product mix includes all product lines.
The amplitude of the product mix refers to the quantity of the product lines within the
categories that the organization place in. For example, here at Fnac, we can see that Sony is
present in consoles, in watches, in cameras, in TVs, in phones, etc, etc. Therefore, a product
line is a group of products that fulfil the same function. Each product line can be described
in terms of their longital, the total number of elements of product line. We can see here at
the TVs that we are under the same name brand. We have UHD 4K or LED or Smart TVs.
Then we have the def, the number of version and variants of each product within the same
line. For example, within Sony UHD 4K and 49 inches we have once that may have a higher
resolution, or they have 4K reality pro with MHL or they have more USB ports, or they have
a 1000 Hertz and then we have. Other ones which have different resolutions, and they have
different ports, and they have what is called SCART with 200 Hertz, among others. As you
can see, understanding your product mix is also crucial, because it needs to be
differentiated enough to address distinctive needs from the customer's point of view. And I
want to clarify that not from RND's point of view. Why else are we continue talking about
this? Because the main challenges that you will encounter in managing your product mix are
that your organization must determine the optimal number of product lines as well as the
longitude and the depth of each one. And you should consider the consistency of a product
mix. Understand which characteristics are shared by product lines. For example, do they
have the same technology that we can leverage, or are the products addressed at the same
market segment? Are they commercialized through the same channels, etc.? All of these
questions will impact the development of your new product and your marketing and sales
approach. That is why I am encouraged you think about them from the get-go. I hope you
have enjoyed your visit to Fnac. It is now time to discuss the product life stages.