Principles of Marketing

Quarter 2 – Module 1:
The Product
 What I Know

Consumer products are classified into different types in order to better understand
consumer’s behavior, to assist in the design and to support the crafting of marketing
mix. Your task is to appropriately classify the following list of products into
convenience goods, shopping goods, specialty goods, and unsought goods.

1.

2.

3.

4.
 5.

6.

7.

8.

9.
10.

A company has to be good at both developing new products and managing

them in the face of changing tastes, technologies, and competition. Evidence
suggests that every product goes through a life cycle with different phases of sales
and profits. Now, your task is to identify the product life cycle accordingly.

11 12 13 14
 Lesson

1 The Product

Organizations assess the current market for new product opportunities and,
when potentially profitable, develop new product prototypes to test feasibility of
production.

Product Classification

Business Products

 Products that are

used to manufacture
other products.

Consumer Products

 Products purchased for

personal used

Consumer Goods

Consumer products referred to all those products that were meant for
personal use or direct consumption by the consumer. Based on the shopping habits
of the target consumer, Consumer goods are further classified as follows:

a. Convenience goods
 Products that are often purchased by the consumer and do not need much
forethought or effort on the part of consumers are called as Convenience Goods. Such
goods are consumed often and thus are purchased immediately with minimum effort.
Examples of convenience goods are Newspapers and most of the FMCG (fast moving
consumer goods) products such as food staples, toiletries and others

b. Shopping Goods

These products are planned purchases where a consumer evaluates various

brands – based on price, features offered and other traits – and then makes the
decision. Unlike the purchase of convenience goods, shopping goods involve
considerable expenditure and thus Consumers are ready to invest effort and time
comparing shopping products before making the final decision. Examples of
shopping goods would be the purchase of clothing, home furnishings and furniture.

c. Specialty goods

These are goods for which consumers need to make the considerable effort
before making the purchase. The products have unique features and brand
characteristics and thus consumers do not compare between different
brands. Rather, they might compare between different models of the same product
in the same brand. An example here would be a purchase of a car.

d. Unsought goods

These are products that the consumer is unaware of and thus has no intention
of buying. Products such as Mutual funds or Life Insurance come under this kind
the and need to be advertised to entice consumers.

Business Goods

These are products that are used to manufacture other products. They can be
used as raw materials, spare parts, capital supplies or consumables. Business goods
are further classified as follows:

a. Materials and parts

As the name suggests, these goods are used as raw materials for the
production of goods or enter the business as manufactured materials or as
component parts. Examples of raw materials would be cotton that is used to
manufacture fabric. Manufactured materials are component materials such as iron
or zinc that are used to manufacture other products. Component parts, such as
integrated circuits, are products that enter the final product without being changed.

b. Capital Items

These are long-lasting goods that assist developing or managing the finished
product.

c. Supplies and business services

These are products that facilitate developing or managing the finished product
supplies. This category is further divided into Operating supplies such as writing
papers and maintenance and repair products such as painting.

What’s In

Understanding the logic behind the product development. Express your thought by
writing AGREE or DISAGREE on the following expressions.

_______________1. Internal and external factors impacting production and demand

should all be considered during the product development period.
_______________2. The most important thing to keep in mind is that the product itself
must successfully fill an unwanted need in the market.

_______________3. A product is basically a need-satisfying offering.

_______________4. A product may serve different purposes, take different forms and
serve different types of buyers.
_______________5. Since products can be of various kinds, it becomes pragmatic to
divide different kinds of products into similar classes.

_______________6. Dining table is an example of a convenience goods.

_______________7. Consumer goods are used as raw materials for the production of
goods.

_______________8. A product can be anything from a hotel stay, a flight, a language

course, to clothes, food or a toothbrush.
_______________9. A product can be easily copied by other players in the market.

_______________10. Convenience goods involve considerable expenditure.

´GET ON BOARD, LISTEN TO YOUR CUSTOMERS NEEDS!´

(Dizon C. 2020)

What’s New
Read

COLGATE AND ITS VALIANT ATTEMPTS TO

STRECTH THE BRAND

Colgate has been (and probably always will be)

known as a brand for oral care. In fact, this is its
core strength. Colgate brand of toothpaste is the
leader in the many markets globally while the colgate
brands of toothbrushes and mouthwashes can
always be relied upon to be either number one or
number two in their respective categories. But if you
were an ambitious marketer, you would be seeing
this success from a different perspective; you would
think that colgate is such a powerful brand that it
deserves to be on more products. By not doing this,
it would be a waste of brand potential.

So, in 1982, the company launched

Colgate Kitchen Entrees that was a
line of frozen food which hope to
capitalize on the growing demand for
microwaveable meals. Furthermore,
the idea here was that after eating a
Colgate meal, the happy consumers
would move on to brush their teeth
with colgate products.
 Result: not only did the product turn out
to be a horrendous flop but it also
dragged the entire colgate oral care line
down with it as sales for Colgate
toothpaste and related products fell.

The lesson here was that if your brand is

heavily associated with a particular
product category, trying to stretch it
toward other categories may only end up
hurting your flagship products as the
association of the brand with the original
category gets diluted.

What is It

“A brand is a name, term, design,

symbol, or any other feature that
identifies one seller’s good or service
as distinct from those of other sellers” “Branding is endowing
(American Marketing Association). products and services with the
power of a brand” (Kotler &
Keller, 2015)

Branding is important because not only is it what makes a memorable

impression on consumers but it allows your customers and clients to know what to
expect from your company. It is a way of distinguishing yourself from the competitors
and clarifying what it is you offer that makes you the better choice. Your brand is
built to be a true representation of who you are as a business, and how you wish to
be perceived.
The objective is to attract and retain loyal customers and other stakeholders by
delivering a product that is always aligned with what the brand promises.

Brand definition: purpose,

values, promise

Brand positioning statement

Advertising and
communications: TV, radio,
magazines, outdoor ads,
website, mobile apps…
Companies tend to use different tools to
create and shape a brand. For example,

Sponsoring and
branding can be achieved through:

partnerships

Product and packaging

design

In-store experience

Workspace experience and

management style

Workspace experience and

management style

Customer service

Pricing strategy
 Packaging
Definition: The Packaging is more than just your product's
wrapping material pretty face. Your package design may affect
around a consumer
everything from breakage rates in
item that serves to
contain, identify, shipment to whether stores will be willing
describe, protect, to stock it.
display, promote and
otherwise make the
product marketable
and keep it clean

The Product Life Cycle is a model that predicts the general trend that most
successful products or services will follow during their lifetime. This life cycle can be
reviewed across an entire category, or in the context of an individual companies
product. It is a strategy tool that helps companies plan for new product development
and refine existing products

There are 4
stages to the
life cycle
process shown
in the table
below. While
decline can be
avoided by
reinventing
elements of the
product, it also
recognizes that
some products
never move beyond the introduction phase whilst others move through the life cycle
much faster than others.
What do the PLC stages mean?

Stage 1: Introduction Stage 2: Growth

Introducing a new Here, the product is being

product where it’s bought and with volume,
unknown and the price declines.
products are small. Distribution increases and
The price is often promotion focuses on
higher as product benefits
distribution is
limited, and
promotion is
personalized.

Stage 3: Maturity
Stage 4: Decline

Here, the product

The product is reaching the
competes with
end of its life and faces
alternatives and
fewer competitors. The price
pricing drops.
may rise and distribution
Distribution becomes
has become selective as
intense (it’s available
some distributors have
everywhere) and
dropped the product.
promotion focuses on
Promotion aims to remind
the differences to
customers of its existence.
competitors’ products.

Direction: Put a tick (/) on the corresponding column.

Stages Introduction Growth Maturity Decline

1. Products end its life
2. Products competes with
alternatives
3. Products are being bought
4. New products are introduced
5. Promotion is personalized
6. Promotion focus on differences
7. Distribution is limited
8. Distribution becomes intense
9. Price is often higher
[Link] fewer competitors
 What’s More
Guessing a Brand Game. The following advertising tagline conveys
the brand’s spirit in the shortest way possible. In just a few words, you’re expected
to grasp the vibe of your brand. Guess what is the specific product based on the
given tagline.

1. Think different
2. Just do it
3. It’s finger lickin’ good
4. Open happiness
5. Have a break
6. Melt in your mouth not in your hands
7. Bida ang Saya
8. We find ways
9. Make it possible
10. It’s you that counts.

What I Have Learned

Direction: Fill in the blanks to complete the conceptual information
about pricing.

The process of identifying consumer needs within a market, and innovating towards
developing a product to fulfill those needs, is referred to as new 1.
____________________ development. When developing new products, the most
important thing to keep in mind is that the product itself must successfully fill an 2.
____________________ in the market, transforming a market opportunity into a
tangible and marketable product.

3. ____________________ products referred to all those products that were meant for
personal use or direct consumption by the consumer. On the other hand, 4.
____________________ are products that are used to manufacture other products. They
can be used as raw materials, spare parts, capital supplies or consumables.

5. ____________________ helps to identify a product and distinguish it from other

products and services while 6. ____________________ is the silent salesman that will
grab busy consumers’ attention in-store.
The 7. ____________________is a model that predicts the general trend that most
successful products or services will follow during their lifetime. This lifecycle can be
reviewed across an entire category, or in the context of an individual companies
product. It is a 8. ____________________ tool that helps companies plan for new
product development and refine existing product. While 9. ____________________ can
be avoided by reinventing elements of the product, it also recognizes that some
products never move beyond the 10. ____________________ phase while others move
through the life cycle much faster than others.

What I Can Do
Having learned the stages of a product life cycle, indicate the stages
concern in the blank provided.

The price
may rise and
The price is distribution
often higher has become
as selective as
distribution some
is limited distributors
have
dropped the
product.

1.______________________

2. _______________________

Here, the product

competes with
The price
alternatives and
declines.
pricing drops.
Distribution
Distribution becomes
increases
intense (it’s available
and
everywhere)
promotion
focuses on
product
benefits
3._________________________

4._______________________
 Assessment
Directions: Think and Match. Look for the best match of information
from the given terms inside the word pool.

1. Products such as Mutual

2. Such goods are
funds or Life Insurance
consumed often and thus
come under this kind the
and need to be advertised are purchased
to entice consumers. immediately with
minimum effort.

3. These are long-lasting

4. This category is
goods that assist
further divided into
developing or managing
Operating supplies
the finished product.
such as writing
papers and
maintenance and
5. These are repair products such
goods for as painting.
which
consumers
need to make
Specialty goods unsought goods
the
considerable Convenience goods
effort before
Capital items
making the
purchase. supplies and business services