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Chapter Setting Product Strategy
Anything that can be offered to a market to satisfy a want or need.
1) Product Charactersitics & Classifications (1/7)
(Important for Product Augmentation) 1) Product Charactersitics & Classifications (3/7) 26-4 2 . desk. f resh towels. working and quietness) Fiv e Product Lev els Augmented product (May be overwhelmed if a guest f ound fresh flower in his room af ter returning from shopping) Potential product: all the possible augmentation the product might undergo in the f uture (Fastest internet in cell phone for News Viewing) Consumption System: the way the user performs the tasks of getting and using products and related services. Rest & Sleep) Basic product (Hotel Room with bed. bathroom.12/5/2011 The Product Product Physical goods Services Experiences Events Persons Places Properties Organizations Information Ideas Components of the Market Offering 1) Product Charactersitics & Classifications (2/7) 26-3 Product Levels: The Customer Value Hierarchy Core benefit (Hotel. towels. dresser and closet) Expected product (Hotel guests expect clean bed.
Umbrella 1) Product Charactersitics & Classifications (4/7) 26-5 Product Classifications Consumer-Goods Classification: Consumer S hopping goods (In the process of selection and purchase. price and style)…furniture. grave. Magazine Emergency goods: Need is urgent.Car.and major appliance Homogeneous shopping goods: Similar in quality and different enough in price Heterogeneous shopping goods: Product f eatures and services are more important that price S pecialty goods: (Special characteristics or brand f or which buyers are willing to make a special purchasing ef fort)….12/5/2011 Product Classifications Durability and Tangibility Nondurable goods (Soap.mark up should be low and advertise to induce trial) Durable goods (Refrigerators. characteristically compares on quality. clothing. Photographic equipment Unsought goods: Does not know or does not normally think of buying…. toothpaste…. Impulse goods: Without planning. …. rice. credibility and adaptability) Consumer-Goods Classification: Consumer Convenience goods S taples: Regular basis. used car….Lif e Insurance.etc. 1) Product Charactersitics & Classifications (5/7) 26-6 3 . Consumed quickly and purchased frequently….advertising and personal selling is required to sell them. require more quality control. clothing that needs more personal selling and higher margin and guarantee) Services (Intangible. Candy.
heavy equipments Equipment: Hand tool. castings Capital items: Facilitate developing or managing finished product. writing paper. Rice Natural products: Fish. office equipment (Computer and desk) 1) Product Charactersitics & Classifications (6/7) 26-7 Product Classifications Supplies & business services (Short-term goods and service that (Shortfacilitate developing the finished products) Maintenance & repair items (Paint. Installations: Buildings. Crude Petroleum Component materials: Cement.12/5/2011 Product Classifications Industrial-Goods Classification Industrial Materials and parts: Raw materials……Mfg Materials Farm products: Wheat. nails and brooms) Operating supplies (lubricants. coal. tires. wire Component parts: Small motor. pencil) Maintenance & repair services (window cleaning & repairing service) Business advisory S ervices (Legal and management consulting) 1) Product Charactersitics & Classifications (7/7) 26-8 4 .
12/5/2011 Product Differentiation Product form (size/ shape/ physical structure) Features Customization Performance Conformance (is the degree to which all the produced units are identical & meet the promised specifications ) Apple iPhone 4 and Toyota Durability Reliability Repairability S tyle (product’s look & f eel to the buyer) 26-9 2) Differentiation (1/4) 26-10 5 .
Braun. a German division of Gillette. hair dryers. coffeemakers. Scandinavian design for functionality. and food processors. Certain countries are winning on design: Italian design in apparel and furniture.12/5/2011 Sachet (pronunciation saSHā ) 26-11 Design: The Integrative Force Design is the totality of features that affect how a product looks and functions in terms of customer requirements. has elevated design to a high art in its electric shavers. 2) Differentiation (2/4) 26-12 6 . and environmental consciousness. aesthetics.
12/5/2011 2) Differentiation (3/4) 26-13 Service Differentiation Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair Returns 2) Differentiation (4/4) 26-14 7 .
cameras. and voice recorders. Flakes) Product type (Flavored rice) Item (Pran Chinigura Rice )/Stockkeeping Unit/Product Variant 3) Product and Brand Relationships (1/10) 26-15 R1 Product System and Mixes Product S ystem: A product system is a group of diverse but related items that function in a compatible manner. M P3 players. e-books. e Product mix (Product Assortment/ Product Portfolio): Set of all products and items a particular seller offers for sale Product mix has a certain: Width/Breadth (Different product lines the company carries) Length (Length of line) Depth (Variants are offered of each product in the line. keyboards. presentation projectors. Tide comes with mountain spring and regular) Consistency (P&G product lines are consistent and consumer goods are going through same distribution channel) 3) Product and Brand Relationships (2/10) 26-16 8 . Example: PalmOne smartphone product lines includes headsets.12/5/2011 Product hierarchy Need family (Hunger) Product family (Food) Product class (Cereal Food) Product line (Rice.
Slide 16 R1 RANA. 11/22/2009 .
26-17 3) Product and Brand Relationships (3/10) 26-18 9 . are sold to the same customer groups. make up a particular price range.12/5/2011 Product Line A Product Line is a group of products that are closely related because they perform a similar function. marketed through the same channels.
Large Memories. Monitor.S pecial S oftware Convenience items: S ell high volume but less promotion and higher margin. printers and software 3) Product and Brand Relationships (5/10) 26-20 10 . Installation may needed…. no promotion and high margin) Specialties: Low sales volume but high promotion.12/5/2011 Table : Product-Mix Width and Product-Line Length for Unilever ProductProduct-Mix Width Detergents Wheel Bar Power Surf excell Toothpaste Close Up (Gel) Pepsodent (Fluoride) Pepsodent Power Disposable Bar Soap Lux Haircare Susilk Dov e Dov e Clear Lif ebuoy Beverage Taaza Lipton PRODUCTPRODUCTLINE LENGTH 3) Product and Brand Relationships (4/10) 26-19 ProductProduct-Line analysis Sales and Profits needs to analyze Four types of Product classes: Core product (Produces high sales volume and low margin) Staples (Basic Ingredient): CPU. (low volume.
The company may find that the middle market is stagnating or declining Upmarket S tretch: High end market for more growth.12/5/2011 Product-Line analysis Market profile Product Map for a Paper-Product Line 3) Product and Brand Relationships (6/10) 26-21 ProductProduct-Line Length Line Stretching Downmarket S tretch The company may notice strong growth opportunities as mass retailers attract a growing number of shoppers with value-price valuegoods The company may wish to tie up lower-end competitors. higher margin or to position full line mfg. if lowerattacked by lower end competitors. Two-Way S tretch: Middle market company may try to stretch Twotheir line in both directions 3) Product and Brand Relationships (7/10) 26-22 11 .
& pruning (Microsoft S martphone “Kin”) 3) Product and Brand Relationships (8/10) 26-23 Product-Mix Pricing ProductProduct-line pricing: Price for low quality. Fog light for car.Shampoo and conditioner bundle 3) Product and Brand Relationships (9/10) 26-24 12 . Printer and Ink Two Part Pricing: Fix ed plus variable. average and high quality items Optional feature pricing: Optional products and associated price.12/5/2011 Product-Line Length Line Filling Just-noticeable difference Just- Line Modernization. Telephone bill ByBy-Product Pricing: Petroleum processing…and pricing Product Bundle Pricing: Bundle price should be cheaper than lose one…. featuring. extended warranty CaptiveCaptive-Product Pricing: Camera and Film.
Jamuna & coBashundhara. Intel coand IBM. S ame company co-branding: Amul Milk and Butter co Joint venture co-branding: Citi Bank Visa Card. Warranties & Guarantees Packaging and Labeling Packaging Package Primary Package (Cologne comes in a bottle) Secondary Package (Cardboard box) Shipping Package (Contains 10 box in one big pack) Factors which have contributed to the growing use of packaging as a marketing tool Self -Service (books for example) Self Consumer affluence (better package means dependability and prestige) Company and brand image (company or brand) Innovation opportunity (easy to open or easy to carry) 4) Packaging. 3) Product and Brand Relationships (10/10) 26-25 Packaging.12/5/2011 Co-Branding and Ingredient Branding Co Co-Branding/Dual Branding: Product are often Cocombined with products from other companies in various ways. Labeling. Warranties & Guarantees (1/4) 26-26 13 . Multiple S ponsor Co-branding: Citibank/American CoAirlines/Visa credit card partnership Retail Co-branding: Pizza + Pepsi Co- Ingredient Branding: S pecial case of co-branding. Labeling.
Guarantee reduces buyers perceived risk. Warranties & Guarantees (3/4) 26-28 14 . Labeling. Labeling. Labeling. Warranties & Guarantees (2/4) 26-27 Packaging. 4) Packaging. Money back guarantee if not satisfied which is suitable for new products. replacement or refund.12/5/2011 Tetra Pak .Aseptic Pack 4) Packaging. Warranties & Guarantees Labeling Functions Identification (identify the product or brand) Grading (grade of the product) Description (describe) Promote (through attractive graphics) Warranties and Guarantees Products under warranty can be returned to the manufactured or designated repair center for repair.
for example. It is a promise by a seller with a buyer for complete replacement of the item/ article or product. Warranty covers only repair of the article. usually guarantee is valid for a fixed period of time.12/5/2011 Packaging. It is more or less like insurance policy for that we have to pay certain amount to come into legal contract. some importer or distributor resell the products will use warranty 4) Packaging. even if we do not pay for or it was offered free of cost by a seller. Warranties & Guarantees According to the 1975 Moss Magnuson Act. S o on the basis of this legal bond the company can be taken to court if it does not bound what has been agreed in the warranty document. Warranty is also a document that protects consumer rights. It has a legal status. a company manufacture a scooter is liable for manufacture guarantee. Labeling. Labeling. A guarantee is a document to protect consumer rights. Warranties & Guarantees (4/4) 26-29 15 . warranty and 197 guarantee are the same thing. Warranty is more in distribution and reselling parts. Guarantee is more in manufacture. on the other hand.
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