Product. New

Product Concepts
© iStockphoto.com/Nikolay Titov
Chapter 10 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1
What Is a Product?
Everything, both favorable

Product and unfavorable, that a
person receives in an
exchange.
◆ Tangible Good
◆ Service
LO1
What is a Product?
A product is anything that can be offered
to a market to satisfy a want or need,
including physical goods, services,
experiences, events, persons, places,
properties, organizations, information, and
ideas.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

What Is a Product?
Product is the starting point of Marketing Mix
Product
Price Promotion
LO1 Place (Distribution)

Types of Products
A product used to manufacture other

Business goods or services, to facilitate an
Product organization’s operations, or to resell
to other customers
Consumer A product bought to satisfy an

Product individual’s personal wants
LO2
Types of Consumer Products
Products
Consumer Business
Products Products
Convenience Shopping Specialty Unsought

Products Products Products Products
LO2
Types of
Consumer Products
Increase market share among
Convenience A relatively
existinginexpensive
customersitem that
Product merits little shopping effort eg bread
A product that requires comparison
Attract new customers to
Shopping shopping, because it is usually more
Product existing
expensive and products
found in fewer stores
eg clothes,TV.
A particular item for which
Specialty Create search
consumers new products for and
extensively
Marketpresent tomarkets
Product are reluctant Diversification
accept
Development
substitutes,eg RollsRoyce
A product unknown to the potential
Unsought buyerIntroduce
or a knownnew products
product that the
Product buyerinto
does notmarkets
new actively seek eg
LO2 insurance
Convenience: Packaging is important to sell the product. Consumers
will accept a substitute. Marketers focus on intense distribution, time
utility. Convenience products can be categorized into staple (milk),
impulse (not intended prior to shopping trip).
Shopping: Consumers expend considerable effort planning and
making purchase decisions. IE appliances, stereos, cameras.
Consumers are not particularly brand loyal. Need producer
intermediary cooperation, high margins, less outlets than convenience
goods. Use of sales personnel, communication of competitive
advantage, branding, advertising, customer service etc. Attribute
based (Non Price Competition), product with the best set of attributes
is bought. If product attributes are judged to be similar, then priced
based.
Specialty: Buyer knows what they want and will not accept a substitute
eg. Mercedes. Do not compare alternatives. Brand, store and person
loyal. Will pay a premium if necessary. Need reminder advertising.
Unsought: Sudden problem to resolve, products to which consumers
are unaware, products that people do not necessary think of
purchasing. Umbrellas, Funeral Plots, Encyclopedia!!

Figure 12.2 Five Product Levels

• Core Product- Marketers must first define what the core BENEFITS
the product will provide the customer.
• Basic Product-Marketer must then build the actual product around
the core product. May have as many as five characteristics:
– Quality level
– Features ,Brand name, Packaging
all combined to carefully deliver the core benefit(s).
• Augmented Product-offer additional consumer benefits and services.
– Warranty
– Customer training

• SONY CAMCORDER: Core--the ability to take video pictures
conveniently
• Actual--Sony Handycam (brand name), packaged, convenient design

so you can hold it, play back features etc. that provide the desired
benefits, high quality etc.
• Augmented--receive more than just the camcorder. Give buyers a

warranty on parts and workmanship, free lessons on how to use the
camcorder, quick repair service when needed and toll free telephone
number when needed.

Product
Lines and Mixes
A group of closely-related
Product Line product items.
All products that an

Product Mix organization sells.
LO3
Product Mix and
Product Line
• The product mix is the set of all products
offered for sale by a company.
• A product mix has two dimensions:
– Breadth(Width) - the number of product
lines carried.
– Depth(length) - the variety of sizes,
colours, and models offered within each
product line.
• A product line is a broad group of
products, intended for similar uses and
having similar characteristics.
Chapter 10 Copyright ©2012 by Cengage Learning Inc. All rights reserved
10 - 13 13
Exhibit 10.1
Campbell’s Product
Lines and Product
Mix
LO3
Adjustments
Adjustments to
Product Items,
Lines, and Mixes
Product Line
Product Product
Extension or
Modification Repositioning
Contraction
LO3
Types of Product Modifications
Quality Modification
Functional Modification
Style Modification
Planned Obsolescence: The practice of

modifying products so those that have already
been sold become obsolete before they actually
need replacement.
LO3
Pruning
Pruning weak
brands can
strengthen the
remaining brands in
the line

Repositioning
Why reposition
established brands?
Changes in
Changing
Declining Sales Social
Demographics
Environment
LO3
Product Line Extension
Adding additional products to an existing product
line in order to compete more broadly in the
industry.
Symptoms of Overextension
LO3
• The Product and the Product Mix
Product-line length
• Line Stretching
Downmarket Stretch
• The company may notice strong growth opportunities as
mass retailers attract a growing number of shoppers
The company may wish to tie up lower-end competitors
who might otherwise try to move upmarket
The company may find that the middle market is stagnating or declining.
• Up market Stretch
• Two-Way Stretch

Branding
Brand That part of a brand that can be spoken,

Name including letters, words, and numbers
Brand The elements of a brand that

Mark cannot be spoken
Brand
The value of company and brand names
Equity
Global A brand where at least a third of the

Brand earnings come from outside its home country
LO4
Benefits of Branding
Product
Identification
Repeat Sales
New Product
Sales
LO4
Individual Brands Versus
Family Brands
Individual Using different brand names

Brand for different products.
Marketing several different

Family
products under the same
Brand
brand name.
LO4
Trademarks
A Trademark is the exclusive right to use a
brand.
◆ Many parts of a brand and associated symbols
qualify for trademark protection.
◆ Trademark right comes from use rather than

registration.
◆ To renew the trademark, the company must prove

use of the mark.
◆ Rights continue for as long as the mark is used.
LO4 ◆ Trademark law applies to the online world.

Functions of Packaging
Contain and Protect
Promote
Facilitate Storage, Use,

and Convenience
Facilitate Recycling
LO5
• https://youtu.be/i2pnLrsMtPs

Innovations in Packaging

Packaging Objectives
• Identify the brand
• Convey descriptive and persuasive
information
• Facilitate product transportation and
protection
• Assist at-home storage
• Aid product consumption

Labeling
Persuasive Informational
▪ Focuses on ▪ Helps make proper

promotional selections
theme
▪ Lowers cognitive
▪ Consumer dissonance
information is
secondary
LO5
Functions of Labels
Identifies
Grades
Describes
Promotes

Universal Product Codes
Universal
A series of thick and thin
Product Codes
(UPCs) vertical lines (bar codes),
readable by computerized
optical scanners, that
represent numbers used to
track products.
LO5
Global Issues in Branding
One Brand Name
Everywhere
Global Options Adaptations &

for Branding Modifications
Different Brand
Names in Different
Markets
LO6
Global Issues in
Packaging
Labeling
Global
Considerations Aesthetics
for Packaging
Climate
Considerations
LO6

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Product Concepts

Everything, both favorable

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

LO1 Place (Distribution)

A product used to manufacture other

Consumer A product bought to satisfy an

Convenience Shopping Specialty Unsought

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

• Actual--Sony Handycam (brand name), packaged, convenient design

• Augmented--receive more than just the camcorder. Give buyers a

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

All products that an

Planned Obsolescence: The practice of

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Chapter 10 Copyright ©2012 by Cengage Learning Inc. All rights reserved 23

Brand That part of a brand that can be spoken,

Brand The elements of a brand that

Global A brand where at least a third of the

Individual Using different brand names

Marketing several different

◆ Trademark right comes from use rather than

◆ To renew the trademark, the company must prove

◆ Rights continue for as long as the mark is used.

LO4 ◆ Trademark law applies to the online world.

Facilitate Storage, Use,

Chapter 10 Copyright ©2012 by Cengage Learning Inc. All rights reserved 29

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

▪ Focuses on ▪ Helps make proper

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Global Options Adaptations &

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