4/20/2021

The First P:
PRODUCT

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WHAT is PRODUCT?
 A product is anything that is offered to a market for
attention, acquisition, use or consumption and that
might satisfy a need or want (Kotler, 2008).

 A product is a set of tangible and intangible

attributes, including packaging, color, price, quality
and brand, plus the seller’s services and reputation
(William Stanton, 1991)

Classification of Products
 Durability and Tangibility Classifications:
 Durable goods
Nondurable goods
Services
Another way to classify product is by:
 Consumer Goods
 Industrial Goods

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Durable goods
 These are consumer goods that are used over a extended
period of time.

Nondurable goods
 These are consumer goods that are quickly consumed, worn
out, or outdated.

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Services
 These are activities, task, benefits or satisfaction that are
offered for a price.

Consumer Goods
 These are goods that are bought by household consumers for
their own final consumption.
 Classification of Consumer Goods
1. Convenience goods
Staples
Impulse goods
Emergency goods
2. Shopping goods
Homogeneous or uniform shopping goods
Heterogeneous or non uniform goods
3. Specialty goods
4. Unsought goods

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Convenience goods
 Are those which the consumer already knows and buys with
minimum of comparison and buying effort.
 STAPLES – are bought by consumer regularly.

Convenience goods
IMPULSE GOODS – are bought by the consumer
without planning or search effort.

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Convenience goods
 EMERGENCY GOODS – are bought by consumers
when there is an urgent need for them

Shopping Goods
 Are consumer goods for which consumer feel the
need to compare, seek additional information,
examine the product or reassure themselves about
a product’s quality, price, style, suitability or value
before making a purchase.

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Shopping Goods
Homogeneous or Uniform Shopping Goods – are
evaluated by consumer similar in quality and features
but differing in price.

Shopping Goods
Heterogeneous or Non-uniform Goods –for these kinds of
goods, cut, fit, style, and look are more important to
consumer than small price differences.

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Specialty goods
 Are consumer goods for which consumers have strong brand
preference and are willing to spend time and effort in finding
the chosen brand.

Unsought goods
 Are those which consumer are not yet aware of or which they
have no immediate need for.

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Industrial Goods
 Are also called organizational or business goods.

Classification of Industrial Goods

1. Raw Materials
Natural products
Agricultural products
2. Manufactured parts and material
Component Part
Component material
3. Installation
4. Accessory equipment
5. Operation supplies

Raw Materials
 Are industrial goods that are processed to become part of
another product.
1.Natural products 2.Agricultural products

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Manufactured Parts and Material

Component Part – enters the finished products complete without
any change in its form .

Component material – are usually processed further to become

another finished product.

Installation
 Are major capital items necessary for the
manufacture of a final product.

Examples:
o Buildings
o Heating plants
o Server for an internet services provider

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Accessory equipment
 Has substantial value and is used in an organization’s
operation.

Operation supplies
 Are low priced goods with short lifespan that help in an
organization’s operation without becoming part of the finished
products.

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New Product
Three distinct categories of new products.
1. Innovative Products – are truly unique products.
They satisfy a real need that has not been
satisfied at the time they are introduced.

New Product
2. Replacement Products – are significantly different from
existing products in form, function, and benefits.

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New Product
3. Imitative Products – are new to the company but not entirely
new to the market. These products imitate competitive
products with identical features; best way to described as “me,
too” products.

New Product Development Process

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Major Stages in New Product

Development
1. Idea Generation – involves a continuing search for product
idea that are in line with the needs of the target market and
with objectives of the organization.
2. Idea Screening – is the stage in which alternative ideas
are sorted. This involves analyzing new ideas to determine
which need further study and which are to be rejected.
3. Concept development and testing – is a development of
screened ideas into product concept.
4. Marketing strategy development – involves developing a
marketing strategy in introducing the product to the market.

Major Stages in New Product

Development
5. Business Analysis – it requires both activity and analysis.
The new product idea is evaluated making use of detailed
quantitative data on market demand, cost projection, and
investment requirement.
6. Product Development – follows favorable result of
business analysis, that is, a prototype or trial model of the
product is developed.
7. Test Marketing – is an experimental procedure in which the
company test a new product under realistic market
conditions in order to obtain a measure of its potential
sales when it is distributed nationally.
8. Commercialization – is the implementation of full scale
production and distribution.

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The Product Life Cycle

 It is a graphic representation of a product’s sales history from
its birth, or market beginning to its death , or withdrawal from
the market.

The Product Life Cycle

1. Introduction – at this stage, the product is launched full-
scale into the market, It is a period of attempting to gain
market acceptance for the product.
2. Growth- if the product earns market acceptance, it should
at some point enter a period of comparatively rapid growth.
3. Maturity – as the product approaches the end of its growth
period, sales begin to decline. Profit level off then fall
maturity stage.
4. Decline- This stage is characterized by falling sales and
falling profits.

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Product Mix Strategies

Product Line
– is a group of product that are fairly closely related. It’s a
broad group of products intended for essentially similar uses
having similar physical characteristic.
Product Mix
– The set of all product lines for sale by the company is called
product mix. It includes all product offerings of the company, no
matter how unrelated they may be.

Product Mix Strategies

 Product Positioning – is the image the product projects in the
minds of consumers compared with other products marketed
by the same company.
• Positioning in relation to a competitor
• Positioning in relation to a product class
• Positioning in relation to a target market
• Positioning by price and quality

 Product Mix Expansion

 Product line extension – occurs when company adds a similar
item to an existing product line with the same brand name.
 Product mix extension- occurs when a company add new product
line to the company’s present assortment of products

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Product Mix Strategies

 Trading Up and Trading Down – The product strategies of
trading up and trading down involve an expansion of product
line and change in product positioning.

 Product Alteration- it means improving an already existed

products.

 Product Mix Contraction – it means eliminating an entire

product line or simplifying the assortment within a line.

Brand
 it is a name, term, symbol, special design or combination of
these elements that is intended to differentiate the goods and
services of a company from those
of its competitors.

Brand name
Brand mark
Brand equity

 Trademark – is defined as brand that is given legal protection

because, under the law, it has been appropriated to one
seller.

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Packaging
 A package is basically an extension of the product offer for
sale. It is the container of wrapper of the product.
Purpose of packaging
 For safety and utilitarian purposes
 For a company’s marketing program
 For increase profit and sales volume

Labeling
 The paper or plastic sticker attached to a can of sardines or a
coffee jar is technically called label. The label is that part of a
product that carries information about the product or the
seller.

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