Chapter 8

LEARNING OUTCOMES
Basic concepts of a product
Different product classification
Product line and product mix decisions
Product packaging and branding
Different phases of the product life
cycle
Introduction
o The product/service offered is based on research to determine needs
o Marketers must know their customers for both parties to benefit
o Marketers must stay abreast of changes in the market
o Customers are becoming more demanding.

 What is a product

o IS AN ITEM, IDEA OR SERVICE, OR A COMBINATION OF ALL THREE, THAT IS

MARKETED OR SOLD TO A CUSTOMER TO SERVE A NEED OR SATISFY A WANT.
 BENEFIT TO CUSTOMERS
 Satisfaction OF CUSTOMERS FOR MARKETERS
Product concept
The core product
The first layer of the product/ the
benefit
Benefits that vary in importance
Marketers need to define the core
benefits provided to customers
Add something to be more specific to
customers needs
Tangible or actual product

Physical product offered to

the customer
Product Unique features e.g
brand
Brand name and packaging
Tangible product example
Augmented Product
Tangible product plus additional
services (features)
E.g warranty, credit, delivery, after
sale
Guarantee benefits and satisfaction
Allows the company to stand out
of the crowd
Delights customers
Potential Product
It’s the reason why customers
purchase the product
New ways of differentiating it from
competitors
Reflects high levels of added value
Quality, shape, dimensions
Establishing & sustain market
leadership
Competitive advantage
Product Image

Encompasses all the previous layers

How the product is perceived by
customers
Created by all product attributes
Other marketing instruments like
marketing communication can add value
 CLASSIFYING PRODUCTS

Customers want more choices of products

Some companies offer the same products or different products
Other products are used In the production process
Marketers needs to come up with product classification systems to
Separate products according to criteria

Classify according to durability

Durable Products ( to be used over a long period of time) – tangible
Non-durable products (consumed over a short period) –
packed and non- packed products ; branding is important
Services (intangible benefit – Gautrain) – ensuring quality
Classification of consumer products

Its Products bought by individual consumers for their personal or family use
Time ; Money; risk
Three common categories
Convenience products : (staple; impulse; emergency)
Little time spend, inexpensive, widely available
Shopping products : uniform (price comparison) –
same in quality
: Non-uniform (features of products – clothing)
Satisfy individual taste – price not important
Specialty products : Maximum Branding loyalty – rolex
 Product line decisions
 Product line – product manufactured by one
company, similar in nature, same function,
target, price range
 Product mix – number of product lines
Need to look at the product strategy
plan THE PRODUCT Growth CAREFULLY
PROUDCT LINE STRETCHING – COMPANY
LENGTHENS PRODUCT LINE BEYONG CURRENT
RANGE
TRADING DOWN / TRADING UP / TRADING BOTH WAYS

 TRADING DOWN
 OFFERING EXPENSIVE PRODUCT AND TRADING DOWN BY OFFERING
CHEAPER PRODUCTS
 FASTER GROWTH AT THE END RATHER THAN AT THE TOP
  TRADING UP
 BE Attracted BY FAST GROWTH OR HIGHER
MARGINES
 E.G CHRYSLER PURCHASE LAMBORGHINI

 TRADING BOTH WAYS

 STRETCHING IN BOTH DIRECTIONS

 OFFERING BOTH HIGH AND LOW PRICES
 PRODUCT MIX DECISIONS

• Breadth of product mix

• How many product lines a company carries
• Depth of product mix
• Versions in product line
• Consistency
• HOW CLOSELY RELATED THE VARIOUS PRODUCT LINES
ARE IN THE END USE, PRODUCTION REQUIREMENT,
DISTRIBUTION CHANNELS
• PRODUCT DIVERSIFICATION
• EXPAPASION OF PRODUCT MIX BY ADDING NEW
PRODCUT LINES
• RELATED AND UNRELATED DIVERSIFICATION
 BRAND DECISIONS
• Brand is a product, service or concept used by
company to be different from other competitors and
to customers perceptions
• Devising ways to identify products and distinguish
them from competitors
• Consumers view branding as an important part of the
product and can add value to the product
• Definitions : page 169
Benefits of branding
oBranding makes it easy to buy products
 • Helps create loyalty
• Differential advantage
• Premium pricing
Manufacturer • Product diversification

• Brand marketing support by the manufacturer

• Attracts customers
Retailer

• Product identification easier

• Communicates features and benefits
• Product evaluation
• Risk in purchasing
Customer • Create interest in products
Types of brands
• Manufacture Brand – owned by
manufacturer
• Private brand – by wholesaler or
retailer
• Generic Brands - non branded
products
• Individual– from a product lines
• Family brands – Dettol
• Company names with a brand –
Colgate
 Packaging
Decisions Related to design, manufacture and materials used for
containing, protecting, handling, preserving and delivering product that
will be easily recognized and successfully marketed.
 Serves as a tool in promotion strategy
 Used to attract customers
 Innovative packaging can give advantage to attract customers

Functions of packaging
ENCLOSURE AND PROTECTION
REUSABILITY
COMMUNICATION
MARKET SEGEMENTATION
DISTRIBUTION
PRODUCT DEVELOPMENT
DIFFERENTIATION
 TYPES OF PACKAGING
•Family and individual packaging – for all
company product – (head and shoulders)
•Special packaging – Perfumes
•Reusable packaging
•Multiple packaging -
•Kaleidoscopic packaging – altering certain
information of the packaging
 LABELLING

•Labelling – it’s a
printed material on
the product package
•They include warnings
and instructions on
the products
Product life cycle
• Marketing strategy will have
to adapt to the product life
cycles
• Product life cycle is divided
into:
Introductory phase
Growth phase
Maturity phase
Decline phase