ICT-ED INSTITUTE OF SCIENCE AND TECHNOLOGY LIPA

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SHS DEPARTMENT
12 - ABM
Learning Module
In
Principles of Marketing
(SY. 2020-2021)

Instructor:
Jojie R. De Ramos
 Lesson 9. The Product

I. Lesson Objectives

As you read and study this chapter, concentrate on the following objectives, and
at the end of the chapter, be able to:

1. Discuss what is product and their classification;

2. Explain the product differentiation tools; and
3. Understand the product life cycle.

II. Read and Learn

Products are the vehicles by which the company attempts to accomplish its objectives.
As it is, the product is the only element in the marketing mix that the company cannot do
without. This chapter is an attempt to explain why this is so.

WHAT IS A PRODUCT

A product is anything offered for sale by a firm to buyers to satisfy their wants
and needs. Products may take any of the following forms:

1. a physical object like a toy or a kilo of pork;

2. a service like a Ferris wheel ride or a dental check-up;
3. a place like London or Boracay;
4. an organization like the Knights of Columbus or the Philippine Marketing Association
5. an idea like "pro-life" or "the preservation of the ozone layer; and
6. a personality like Evita Peron or Efren "Bata" Reyes.

To maintain the interest of buyers, the physical products are most often provided
with benefits like: (1) quality; (2) reputation of the manufacturer; (3) packaging; (4)
credit; (5) information about the product; (6) warranty; (7) after sales service; and (8)
delivery.

"A product is anything offered for sale by a firm to buyers to satisfy their physical,
social, symbolic, and psychological wants and needs."
CLASSIFICATION OF PRODUCTS

Products may be classified into two categories: (1) consumer goods; and (2)
industrial goods.

Consumer Goods

Consumer goods are those intended for final consumption by consumers. They
may be classified according to: (1) the rate of consumption and tangibility; and (2) the
consumer's shopping habits.

1. Rate of Consumption and Tangibility. Based on the rate of consumption and

tangibility, consumer goods are further classified as: (1) durables; (2) nondurables;
and (3) services.
a. Durable goods are tangible goods which normally survive many uses. Examples
are motorbikes, refrigerators, and filing cabinets.
b. Nondurable goods are tangible products which are consumed in one or a few
uses. Examples are ice cream, blank CD, toothpicks, and petrol.
c. Services are intangible goods like activities, benefits, or satisfactions which are
offered for sale. Examples are entertainment in movie houses and concerts,
transport services, tailoring services and haircuts.
2. Consumer's Shopping Habits. Based on consumer's shopping habits, consumer
goods may be further classified as: (1) convenience goods; (2) shopping goods; (3)
specialty goods; and (4) unsought goods.
a. Convenience goods are those which are purchased with a minimum of effort.
Many of them are readily available in many retail outlets. Examples are soap,
bread, soft drinks, and milk.
b. Shopping goods are those that are bought only after an effort to compare with
other goods is made. Examples are radio sets, ready-to-wear suits, cellphones,
and shoes.
 c. Specialty goods are those that the consumers seek to buy and they are not
willing or they are not able to accept substitutes. Examples are special
medicines, jewelry, and exotic foods like turtle eggs.
d. Unsought goods are those that are not yet wanted by or are still unknown to the
consumer. Because of the said reasons, consumers use no effort to seek them.
There are two types of unsought goods: (1) the new unsought goods, and (2) the
regularly unsought goods.
The new unsought goods are really new ideas or products that the
consumer still have to know to be motivated to buy. An example is the papaya
soap when it was first introduced. Consumers did not know much about it, so it
was not sought. Regular unsought goods are those that stay unsought but no
unbought forever. Examples are encyclopedias, educational plans memorial
plans, and life insurance plans.

Industrial Goods

Industrial goods are those used in the production of other goods. They are
categorized as follows:

1. installations 2. component parts and materials

2. accessory equipment 3. supplies
3. raw materials 4. services

Installations. This term refers to industrial products with long life, are generally
expensive, and they form part of the major capital equipment of an industrial firm.
Examples are buildings, generator, computers, elevators, and others.

Accessory Equipment. These are industrial goods that are used as aids in the
production process. They have a shorter usable life than installations. Examples are
hand tools and lift trucks in factories, fax machines, and desks in offices.

Raw Materials. These are unprocessed goods that will become part of another
product. Raw materials are of two types: (1) farm products; and (2) natural products.
Farm products are those grown by farmers, while natural products are those which
occur by nature.
 Component Parts and Materials. These are processed industrial goods that will
still be used and become an actual part of the finished product. Component materials
are exemplified by paper for further processing into printed magazine, textiles into
dresses, and flour into bread. Component parts are exemplified by tires mounted in
motor cars, strings in a violin, and knobs on television.

Supplies. These are items that are used as aids in the operations process but do
not become part of the finished product.

Services. These are expense items that assist in the operations. Among the
examples are maintenance services tor general housekeeping security services, and
consultancy services.

The Product as a More Useful Variables

The product is one of the variables in the marketing mix and it can be unique so it
will be more attractive to buyers. When the marketer does it, he is making his product
different from the others.

The purpose of product differentiation is not only to satisfy customers and make
more profits but to beat the competition. In product differentiation, the following tools are
considered:

1. branding
2. quality
3. image
4. product features
5. packaging
6. location
7. promotion
8. innovation
9. different service levels

When product differentiation efforts become successful buyers become brand

loyal customers.
 Some of the product differentiation tools will be discussed in this chapter.

BRANDING

Branding is that marketing action which identifies and helps differentiate the
goods or services of one seller from those of another. A consumer who uses a product
and begins to like it, will find less difficulty in purchasing the product again if he is
provided with a brand to remember.

Brand

A brand is a name, term, sign, symbol, or design, or a combination of these

elements, that is intended to identify the goods or services of one seller or a group of
sellers. Brand may either be: (1) legally registered; or (2) not legally registered. Legally
registered brands are provided with legal protection called trademark.

Brands, whether legally registered or not, consists of two distinct parts: (1) brand
name; and (2) brand mark.

Brand Name. This term refers to that part of a brand consisting of words, letters,
and/or numbers that can be vocalized. Examples are Suzuki, UST, Tide, and Hundred
Islands.

Brand Mark. This refers to that part of a brand that appears in the form of a
symbol, design, or distinctive coloring or lettering, and which cannot be vocalized.
Examples are the three flowers appearing in a Carnation milk product label, and the
pictorial presentation of a boy appearing in Dutch Boy paint labels, the Apple logo, the
Samsung logo..

Licensing as an Alternative

There are times when a company is not in a position to engage in developing its
own brand. In this case, licensing offers an alternative option.

In a licensing agreement, the firm which owns or controls a brand allows another
firm to use the brand in exchange for royalties or some other form of payment.
Licensing offers much flexibility because the licensee is not barred from using other
options when needed.

Criteria for a Good Brand

As brands serve to facilitate the purchasing of products, effort must be made to

assure that the brand selected is a good one.

Among the desirable qualities of a good brand are the following:

1. It should suggest something about the product’s benefit and qualities.

2. It should be easy to pronounce, recognize, spell, and remember.
3. It should be distinctive.
4. It must be adaptable to additional product lines.
5. It must be capable of being legally registered. Names that sound like an already
registered name is no longer acceptable for copyright registration.

When to Adapt a Brand

Although branding may be helpful to the marketer, it is not always the case.
There are instances when products need not be branded. Some of the conditions
favorable to branding are the following:

1. The demand for the general product class which the product or service under
consideration belongs should be large.
2. The demand should be strong enough so that the market price can be high enough
to make the effort profitable.
3. There should be economies of scale. When serving the demand, there is an
indication that cost decreases as more units are sold. This condition is favorable for
branding.
4. The product quality should be the best for the price, and the quality should be easy
to maintain.
5. The brand or trademark should make it easy for the product to be identified.
6. Availability of the product is dependable and widespread. The buyers must be
convinced that they could use the product as long as they want.
7. Favorable shelf location or display space in stores must be available for retailing
activities.

BRANDING STRATEGIES

When branding products or services, firms have several options. These are:

1. manufacturer branding
2. reseller branding
3. mixed branding; and
4. generic branding

Manufacturer branding is a branding strategy in which the brand name for a

product is designated by the manufacturer. Two alternative approaches are available:
(1) multiproduct approach; or (2) multibrand approach.

The multiproduct approach, also referred to as blanket or family branding

strategy, uses the same brand name to cover a group of products. This approach offers
the following advantages:

1. Buyers who have a positive experience with the product will extend this favorable
attitude to other products with the same brand.
2. The level of brand awareness is raised and can reduce the rate of advertising costs.

The multibrand approach requires the firm to provide each product with a
distinctive name. Among the advantages of this approach are:

1. It is useful when each brand is intended for a different

2. There is no risk of one product’s failure affecting another

Reseller branding, also referred to as private labeling or private branding, refers

to the branding strategy of a firm which manufactures products but sell them under the
brand name of a reseller. An advantage is the shifting of promotional costs from
manufacturer to reseller.
 Mixed branding refers to the use of the manufacturer and reseller brands in a
product. It is expected that market segments attracted to the manufacturer and to the
reseller will patronize the mixed branded product.

Generic branding is a branding strategy which lists no product name, only a

description of contents. This approach is applicable to rice, salt, Sugar, and charcoal.
Activity for Lesson 9 – Week 13

1. Give at least 8 examples of each:

- Durable Goods
- Non-durable Goods
- Service
2. Give at least 5 products under the following categories:

- Convenience Goods
- Shopping Goods
- Specialty Goods
- Unsought Goods
3. Why is branding important?
4. Differentiate multiproduct approach and multiband approach and provide examples
5. Differentiate the four (4) branding strategies

Note for ODL: Send your answers to jojie.deramos@yahoo.com

To be submitted on or before November 21, 2020

Wag sulat kamay nakatype po 