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UNIT 6
PRODUCT STRATEGIES

• Product definition & classification

• Product decisions
• Product life cycle

PRODUCT DEFINITION

A product is anything that can be

offered to a market for attention,
acquisition, use or consumption and
that might satisfy a need or want

They include physical objects, services, events,

persons, places, organizations, ideas, or mixes
of these entities
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PRODUCT

Combinations of pure tangible

products and pure services

Pure tangible Pure services

Product (soap, (doctor’s exam,
toothpast…) Financial
service…)

SERVICE
➢ Services are a form of product that consists of
activities, benefits, or satisfactions offered for sale.
They are essentially intangible & do not result in the
ownership of anything
➢ Banking, hotel, airline, taxe preperation, …

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PRODUCT LEVEL
Augmented product
Installation

Actual product
Warranty Packaging
Features
Core product
Brand Core
benefit
Design
Quality
Delivery
Services
& credit
After sales

PRODUCT LEVEL
 Core benefit
 Addresses the question “What is the
buyer really buying?”
 Actual product
 Product planners must turn the core
benefit into a actual product
 Actual product consists of features,
design, quality level, brand name &
packaging
 Augmented product
 Additional consumer services and benefit
 Each level adds more customer value

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SERVICE LEVEL
 Cost for delivered core
benefit would take at least
70% however its benefit
Supplementary recognition of only 30%
services  Cost for deliverd
surrounding services is
Core
maximum of 30% while it
benefit benefit recognition of 70% at
least

FACILITATING & ENHANCING SERVICES

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THE FLOWER OF SERVICE

PRODUCT CLASSIFICATION
Classified based on the purpose
for which the product is bought

Product & service

Consumer Business
products products

Products & services bought Products purchased for further

by final consumers for processing or for use in
personal consumption conducting a business

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CONSUMER PRODUCT TYPES

Classified based on how consumers go about buying them
Products that consumer Products that the consumer
usually buys frequently, Products either does not know about
immediately, & with a or know about but does not
minimum of comparison normally think of buying
& buying effort

Convenience Shopping Specialty Unsought

products products products products

Products that consumer Products with unique

in the process of seclection, characteristics or brand
& purchase, characteristically Identification for which a significant
compares on such bases as group of buyers is willing to
suitability, quality, price, & style make a special purchase effort

CONSUMER PRODUCT TYPES

Marketing Convenience Shopping Specialty Unsought
considerations
Consumer Frequent purchase, Less frequent Strong brand Little product
buying little planning, little purchase, much preference loyalty, awareness
behavior comparison or planning & shopping special purchase knowledge (or if
shopping effort, low effort, comparison of effort, little comparison aware, litle or
customer involvement brands on price, of brands, low price even negative
quality, style sensitivity interest)
Price Low price Higher price High price Varies

Distribution Widespread Selective distribution Exclusive distribution Varies

distribution, in fewer outlets in only one or a few
convenient location outlets per market
area
Promotion Mass promotion by Advertising & More carefully Aggressive
producer personal selling by promotion by both advertising &
both producer & producer & resellers personal selling by
sellers producer &
reseller
Examples Toothpaste, Major appliances, Luxury goods, such as Life insurance,
magazines, laundry TV, furniture, Rolex watch or fine blood donation
detergent clothing crystal

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PRODUCT DECISIONS
 Product line
 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 given price ranges
 Actual product
 Product quality
 Product features
 Product design
 Product package
 Product brand
 Agmented product (Installation; service after sales,
warranty…)

1. PRODUCT LINE DECISIONS

Product line wide
Number of different product
lines the company carries

Product line length Product depth

Product line
Total number of items decisions
Number of versions offered
the company carries of each product in the line

Product mix
The set of all product lines
& items that a particular
Seller offers for sale

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P&G PRODUCT LINE DECISION

Product line wide
Fabric & home care; Baby care;
feminine care; Beauty care;
health care; & Food & beverage

Product line length

Product depth
(Fabric & home care)
P&G (laundry detegent)
Laundry detegent;
Seven laundry detegent
Diswashing detegent…

Product mix
All product offered by P&G

PRODUCT STRETCHING DECISIONS

• Stretching downwards
• Add new products of lower
quality/price
• Stretching upwards
• Add new products of higher
quality/price
• Both ways Stretching
• Add new products of both lower
and higher quality/price

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2. PRODUCT ATTRIBUTE DECISIONS

• Product quality
• The ability of a product to perform its functions
• It includes the product’s overall durability, reliability,
precision, repairability, and conformance quality;
other valued attributes
• Durability: Product’s expected operating life
• Reliability: Probability product will not malfunction or
fail in a time period
• Repairability: Ease of fixing product –
malfunctions/fails
• Conformance quality: Degree units – identical, meet
promised specification

PRODUCT ATTRIBUTE DECISIONS

• Product features
• A product can be offered with varying features
• Ranging from very simple to higher level model
• Firm must assess each feature’s value to customers
versus its cost to the firm
• Supplement basic function

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PRODUCT ATTRIBUTE DECISIONS

• Product design (styles)
• Simply describe the appearance of a product
• It should be eye-catching
• Not necessarily make the product perform better
• Good design contributes to a product’s usefulness as
well as to its looks
• Size, shape or physical structure

PRODUCT PACKAGING
 Packaging
 Reason for packaging
 Consolidation
 Protection
 Information
 Brand recognition
 Sales promotion
 Efective packaging

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PRODUCT ATTRIBUTE DECISIONS

• Product packaging
• The activities of designing and producing the
container or wrapper for a product.
• The design, science, art, and technology of enclosing
or protecting products for distribution, storage, sale,
and use
• Raw material: large bags, sacks, or drums
• Consumer products: boxes, bottles, ect.
• Services & retail stores: the actual physical layout of
the store

REASONS FOR PACKAGING

 Consolidation
 Protection
 Information
 Brand recognition
 Sales promotion

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REASONS FOR PACKAGING

• Consolidation
• Main reason for packaging:
easier to ship, store and display
• Contain the product; keep it
together
• Liquids in bottles, cans, jars…
• Hard-goods in bxes, plastic
containers…
• Bulk goods in large boxes
containers…

REASONS FOR PACKAGING

• Protection
• Protect products from breaking,
being tampered with, or going
bad
• Bubble wrap, foam, plastic or
Styrofoam
• Perishable goods in shrink wrap,
cans…
• Cotton & safety seal/childproof
cap for medicine containers

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REASONS FOR PACKAGING

• Information
• Law requires labels on food packages
• Ingredients
• Nutritional information
• Name & address of manufacturer
• Universal product code (UPC)
• Net quantity of product
• Sering size
• How to store product
• Best before date
• Assembly/cooking instruction
• Health warning…

REASONS FOR PACKAGING

• Brand identification
• Identify the product for the
consumers
• Specially designed packages to
stand out from competition
• Proprietory design:
• Colourful & eye-catching
• Product name prominent

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REASONS FOR PACKAGING

• Promotion
• Another way to promote &
advertise brand/event
• Easy to display & self service - –
market product effectivelly
• Take-home cups from theatres
with movie advertising on it –
souvenir
• Limited edition packaging
making it collectible
• Environmentally friendly
packages

EFFECTIVE PAKAGING
• Creative & Unique & simple
• Attractive colour schemes, graphics and fonts
• Easy to read labels; Use desired images
• Include necessary & legal information
• Ease of opening and closing
• Appropriate shape and size (or weight) - Relevant
to product
• Easy to stock and display
• Doesn’t look tampered
• Project the desired image; Appropriate language
• Packaging costs; Packaging texture
• Deter shoplifting; Tamper-resistant
• Environmentally friendly

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KETCH-UP HEINZ

PRODUCT BRAND

Abrand is a name, term, sign, symbol, or

design, or a combinnation of these, intended to
identify the goods or services of one
seller or group of sellers and to
differentiate them from those of competitors.

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BENEFITS OF BRANDING TO THE FIRM

• Recognition of its products by

consumers and publics
• Brands evoke a sense of prestige and
status
• Branding allows the firm to use
market segmentation more effectively
• Branding reduces the consumers
price sensitivity
• Allows mark-up on prices
• Provide legal protection

BENEFITS OF BRANDING TO THE

CONSUMERS

• Able to identify with the product

identity and be assured of quality
• Reduces buying risk
• Provide shopping efficiency
• Satisfies status needs of consumers
• Assure consumer of consistency in
terms of quality

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TYPES OF BRAND
• Individual brand names: product of
different brand marketed to different
consumers; failure of one product will not
affect the sales of other products (Tide,
Camay, safeguard)
• Family brand names: one brand name
for various products; less advertising
cost (LG, Samsung)
• Combination brand names: product carry
both family and individual brand names
(IBM-thinkPad, Compaq Presario)

GOOD BRAND CHARACTERISTICS

• Easy to recognise/remember/pronounce
(OMO, Coke, IBM)
• Be distinctive (Qantas, Xerox, Compaq)
• Suggest something about the product or
its benefits (Sunsilk, head & shoulders,
Điện quang)
• Be easily translated into foreign
languages

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TOP BRAND IN 2018

No Brand 2017 Values (billion $)
1 Amazon 3 150.8
2 Apple 2 146.3
3 Google 1 120.9
4 Samsung 6 92.3
5 Facebook 9 89.7
6 AT&T 4 82.4
7 Microsoft 5 81.2

8 Verizon 7 62.8
9 Walmart 8 61.5
10 ICBC (Industrial and 10 59.2
Commercial Bank of China)

TOP BRAND IN CSR 2019

No Brand
1 Rolex
2 Lego
3 Disney
4 Adidas
5 Microsoft
6 Sony
7 Canon
8 Michelin
9 Netflix
10 Bosch

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3. AUGMENTED PRODUCT
 ORDERING EASE: ease to place order

 DELIVERY: how well product delivered

 INSTALLATION: work done to make a product

operational in planned location

 WARRANTY

 SERVICE AFTER SALE

 …

PRODUCT LIFE CYCLE

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PRODUCT LIFE-CYCLE
MARKETING STRATEGIES

Strategy must change over

the product life cycle (PLC) due to
product, economic & competitive changes

1.Products - limited life

2.Sales pass through distinct stages
3.Different profits at each stage
4.Different strategies in each stage

Sales & Profit Life Cycles

Marketing Management -

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Product Life-Cycle Marketing Strategies -

Product Life Cycles

▪ Most PLC curves are bell-shaped

▪ 4 stages:
Introduction
Growth
Maturity
Decline

Adopter Categorization on the Basis of

Relative Time of Adoption of Innovations

Marketing Management - An
© Kotler, Keller, Ang, Leong & Tan Asian Perspective
4th Edition

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Common Product Life-Cycle Patterns

Not all are

bell-shaped
PLC

Marketing Management - An A

Product Life-Cycle Marketing Strategies –

Style, Fashion & Fad Life Cycles

3 special categories of PLC:

 Style - basic & distinct mode of
expression
 Fashion - currently accepted or
popular style
 Fads - fashions – come & adopted
quickly, peak early & decline fast

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Style, Fashion & Fad Life Cycles

INTRODUCTION

Introduction
• Sales growth is slow

The product life cycle • Profits are low or negative

stage in which the new • Expenses is high (high
product is first distributed distribution & promotion
& made available expenses)
for purchase.

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GROWTH

• Product has gained

Growth acceptance and more
consumer is buying products
The product life cycle • Sales grow rapidly
stage in which a • Profits are positive
product’s sales start • Competitors enter the market
climbing quickly.

MATURITY

• Sales reach a peak and

Maturity
increase at a much
The stage in the slower pace
product life cycle • Over capacity leads to
in which sales
intense competition
growth slows or
levels off.

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DECLINE STAGE

• Innovations or shifting in
consumer preference bring
Decline about decline
• Profits decline and may
The product life cycle become negative
stage in which a • Fall in reputation cause
product’s sales customers concerns about
decline. company and its products

SUMMARY OF PLC
Characteristics Introduction Growth Maturity Decline

Sales Low sales Rappidly rising Peak sales Declining sales

sales
Costs High cost per Average cost per Low cost per Low cost per
customer customer customer customer
Profits Negative Rising profits High profits Declining profits

Customers Innovator Early adopters Middle majority Laggards

Competitors Few Growing number Stable number; Declining number

beginning to
decline
Marketing Creat product Maximize market Maximize profit Reduce
Objectives awareness & share while defending expenditure &
trial market share milk the brand

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SUMMARY OF PLC
Strategies Introduction Growth Maturity Decline

Product Offer a basic Offer product Diversify brand & Phase out weak
product extensions models items
service, warranty
Price Use cost-plus Price to penetrate Price to match or Cut price
market beat competitors
Distribution Build selective Build intensive Build more Go selective; phase
distribution distribution intensive out unprofitable
distribution outlets
Advertising Build product Build awareness Stress brand Reduce to level
awareness among & interest in the differences & needed to retain
early adopters & mass market benefits hard-core loyals
dealers
Sales Use heavy sales Reduce to take Increase to Reduce to minimal
promotion promotion to entice advantage of encourage brand level
trial heavy consumer switching
demand

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