Products, services and brands, Developing and managing innovation

Product and services

A product can be defined as anything that that can be offered to a market for attention, acquisition,
use or consumption that might satisfy a want or a need. Products also include, services, events,
personal, places, organisations or ideas.
Products are more than just tangible objects. Products are key elements in the overall market offering.
A service is an activity, benefit or satisfactions offered for sale that is essentially intangible and does
not result in the ownership of anything.
Product, services and experiences
Products are key elements in the overall market offering. Market offerings often include both tangible
goods and services.

Levels of product and services Product Classification

Types of consumer products

Consumer products are products and services bought by final consumers for personal consumption.
Marketers usually classify these products and services further based on how consumers go about
buying them: convenience goods, shopping goods, specialty goods, unsought goods.
Other types of products
Marketers have broadened the concept of a product to include other market offerings.

Product decisions
Individual product decisions: The focus of all these decisions is to create core customer value

Product and service attributes

Product The characteristics of a product or service that has the ability to satisfy stated or implied
quality customer needs.
One of the main positioning tools – has a direct impact.
Closely linked to customer value and satisfaction. Total quality management – constantly
improving the quality of products, services and business process
Product quality has two dimensions, level (performance) and consistency (conformance).
Product Features are one of the competitive tools used for differentiating the company’s product
features from competitor products.
Companies will survey buyers to identify new features and decide which ones to add to
its product
Product Style describes the appearance of a product. It can be, ‘eye-catching’ or ‘yawn-
style and producing’, grab attention and produce pleasing aesthetics, BUT, style does not
design necessarily make the product perform better.
Design is more than skin deep – it goes to the very heart of a product. Good design
contributes to a product’s usefulness as well as to its looks.  Design is a larger concept
than style

Branding
A name, term, sign, symbol, design, or a combination that identifies the product or service and
differentiates it from competitors
Brand is viewed as an important part of the product, can add value to a product and customers attach
meanings to brands, and develop brand relationships.  Can also be a sound
Packaging
Involves designing and producing the container or wrapper for a product. The importance of
packaging is to attract attention, describe the product, help make the sale and is part of a brand’s
identity.
A poorly designed package can cause frustration for customers and lost sales for companies, and can
lead to “wrap-rage,” which is the frustration we all feel when we’re trying to free a product from
nearly impenetrable packaging. A well-designed package is functional and provides value.
Labelling
Labels range from simple tags attached to products to complex graphics that are part of the package.
Importance of labels Labelling concerns
 Identifies the product or brand  Labels can be mislead customers
 Describe the several things about the  Fail to describe important ingredients
product, including who made it, where it  Fail to include needed safety warnings.
was made, when it was made, its contents, As a result, several federal and state laws
how it is to be used regulate labelling.
 Help to promote the brand, support its
positioning and connect with customers

Product support services

A company’s offer usually includes some support services, which can be a minor or a major part of
the total offering.  Support services are an important part of the customer’s overall brand
experience. It can augment the actual product.
Product line decisions
A product line is a group of products that are closely related because they:
- Function in a similar manner
- Are sold to the same customer groups
- Are marketed through the same types of outlets, or
- Fall within a given price range

Lengthening the line

Key product line decisions is length (the number of products in the product line). If the line is too
short, then you can add items. If the line is too long, you can remove items.
Marketers analyse their product lines periodically to assess each item’s contribution to the
organisations performance. Length is influenced by the company objectives and resources.
Expanding the line
Product line filling is adding more items within the current line. It can assist in, achieving extra profit,
satisfies intermediaries, using excess capacity, improving competitive position (blocking competitors
or being seen to the leading full-line company).
Product line stretching is where a company can stretch its line downward, upward, or both ways.

Product mix decisions

A product mix (or product portfolio) consists of all the product lines and items that a particular seller
offers for sale. An organisations with several product lines has a product mix. There are 4 dimensions
of a product, product mix width, product mix length, product mix depth and consistency.

*The management of the

product mix dimensions is
the basis of the company’s
product strategy

Service Characteristics

Brands and brand strategy decisions

Brand equity: Brands are more than just names and symbols. They are a key element in the
company’s relationships with consumers. Brands represent consumers’ perceptions and feelings
about a product and its performance – everything that the product or service means to consumers. 
Brands exist in the heads of consumers.
The differential effect that knowing the brand name has on customer response to the product and
its marketing. High brand equity provides a company with many competitive advantages. Measuring
brand equity:
Brand strategy decisions:

Brand Positioning: Brands can be positioned at any three levels.

Strong brands go beyond attribute or benefit positioning. It is
important that the brand promise simple and honest.
Brand name selection: Difficult task, and includes part science, part
art and part instinct. The brand name should:
- Suggest something about the product’s benefits and quality
- Should be easy to pronounce, recognise and remember
- Should be distinctive
- Should be extendable
- Translate easily into other languages
- Capable of registration and legal protection
Brand name sponsorship:

Brand development:

Managing brands: Companies must manage their brands carefully. The brands positioning and values
must be carefully communicated. The brand’s positioning will not take hold fully unless everyone in
the company lives the brand.
*Brands are not maintained by advertising but by the customers’ brand experiences.
New product development strategy (developing and managing innovation)
A business can obtain new procuts in two ways:
Acquisition
Buying a whole company, a parent or a licence
to produce someone else’s product.

What are new products?

New products refer to a variety of products that the business develops through its own research and
development (R&D) efforts. It includes:
Some reasons for failure
includes, overestimates of
market size, production cost
blow-outs, poor product design
Product development process and incorrect positioning

Idea generation: Internal idea sources, such as R&D and employees. External idea sources such as
distributors/suppliers, competitors, customers and crowdsourcing.
Idea screening: The goal of screening is to spot goods ideas and drop poor ones as soon as possible in
order to reduce investment in product development with little potential. Some issues to consider in
screening may include, is it real, is there a real desire or need, will customers buy it, and does it offer
a sustainable competitive advantage.
Concept development and testing: A product idea is an idea for a possible product that the company
can see itself offering to the market. A product concept is a detailed version of the idea stated in
meaningful consumer terms. A product image is the way consumers perceive a potential or actual
product.
Market Strategy development: The process of designing an initial marketing strategy for a new
product based on the product concept. The marketing strategy is in three parts:
1. The target market; the planned value proposition; and the sales, market share and profit goals
for the first few years
2. The product’s planned price, distribution and marketing budget for the first year
3. The planned long-run sales, profit goals and marketing mix strategy.
Business analysis: Assessment of the product’s financial attractiveness. Business analysis might
include things such as:
- Sales, costs, and profit projections
- Review sales for similar products
- Estimates of maximum and minimum sales
- Scenarios for alternative product development and product growth possibilities
Product development: Developing the product concept into a physical product in order to ensure that
the product idea can be turned into a workable market offering.
Test marketing: The stage of a new-product development where the product and marketing program
are introduced into more realistic market settings. May involve consumers testing prototypes, often
involves marketing in a small region such as NZ or Newcastle, and simulated test-marketing is widely
used. One of the advantages of test
marketing is the ability to evaluate
a product and its market program
before commercialization.
Commercialization: Full scale intro of a production into the marketplace. Some issues to consider is
timing, when to launch, where to launch and planned rollout in specific locations over defined
timelines.

Product life cycle and strategies

After launching a product, the company wants to earn a decent profit to cover all the effort and risk it
went through in launching. Management is aware that each product will have a life cycle, although its
exact shape and length is not known in advance. The product life cycle is a helpful concept and can
describe, the product class, the product form, or a brand.
The product life cycle has 5 distinct stages: