CHAPTER 13 :

SETTING PRODUCT
STRATEGY
MARKETING MANAGEMENT
 What is a Product?

A product is anything that can be offered to a market to

satisfy a want or need, including physical goods,
experiences, persons, places, properties, organizations,
information and ideas.
 PRODUCT CHARACTERISTICS AND
CLASSIFICATIONS
FIVE PRODUCT LEVELS : THE CUSTOMER - VALUE HEIRARCHY
Potential Product - Attributes that encompasess all possible
augmentations and transformations the product might undergo in
the future.

Augmented Product - Attributes that exceed customer

expectation.

Expected Product - A set of attributes and conditions buyers

normally expect when they purchase the product.

Basic Product - Marketers are turning the core benefit into a bsic
product.

Core Benefit - The Service or Benefit the consumer is really

buying.
PRODUCT CHARACTERISTICS AND
CLASSIFICATIONS

Product Qualification Schemes

Durability and Tangibility

Consumer - Goods Classifications

Industrial - Goods Classification

 Durability and Tangibility

Non-durable goods Durable Goods Services

Tangible goods consumed Tangible Goods that survive Intangible, Inseperable
frequently many uses variable and perishable
 Consumer Goods Classification

Convenience Goods
Consumer item that is widely available and purchased frequently and with minimal effort.

Shopping Goods
Consumer goods that are usaually purchased after the customer has compared price,
quality and style in more than one store.

Specialty Goods
It is a product that a certain consumers will actively seek to purchase because of uniique
characteristics or loyalty to a specific brand.

Unsoght Goods
Is a product of which consumers are unaware or not that interested in actively pursuing for
purchase.
 Industrial Goods Classification

Materials and Parts : Goods that enter the manufacturer's product completely.

Capital Items : Long lasting goods that facilatate developing or managing the finished product.

Supplies/business services : Short-term goods and services that facilatate developing or managing the
finished product.
PRODUCT DIFFERENTIATION

Product Form

Features

Customization

Performance Quality
PRODUCT DIFFERENTIATION

Conformance Quality

Durability

Reliability

Repairability

Style
SERVICE DIFFERENTIATION
 Ordering ease

 Delivery

 Installation

 Customer Training

 Customer consulting

 Maintenance and Repair

 Returns
 DESIGN

 It refers to the totality of features that affect

how a products looks, feels, and functions
to a customers.

 A well designed product is peasant to look

at and easy to open, install, use, repair, and
dispose of.
 LUXURY PRODUCTS

SUB-ZERO REFRIFERATORS - The target is customers with high

standards of performance and design who cherish their home and what they
buy to furnish it.

PATRON TEQUILA - Patrón has surpassed Jose

Cuervo to become the world’s largest tequila brand.

MONTBLANC LUXURY GOODS - The goal of Montblanc, whose

products now range from
pens to watches to leather goods and fragrances, is to be a strong luxury
brand to
as many classes of luxury customers as possible, while still retaining a
prominent
public image.
MARKETING LUXURY
BRANDS
PRODUCT AND BRAND RELATIONSHIPS :
PRODUCT HIERARCHY

Need Family : The core that underlines the existence of a product family.

Product Family : All the product classes that can satisfy a core need with
reasonable effectiveness.

Product Class : A group of products within the product family recognized as

having a certain functional coherence, also known as product category.
PRODUCT AND BRAND RELATIONSHIPS :
PRODUCT HIERARCHY

Product Line : A group of products within a product class that are closely related because
thay perform similar function, are sold to the same customer group, are marketed through
the same outlets or channels.

Product Type : A group of items within a product line that share one of several possible
forms of product.

Item : A distinct unit within a brand or product line distinguishable by size, price,
appearance, or some other attribute.
PRODUCT SYSTEM AND MIXES

A product system is a group of diverse but related items that function in a compatible manner.

A product mix (or also called as product assortment) is a set of all products and items a particular
seller offers for sale.
PRODUCT SYSTEM AND MIXES
PRODUCT MIX : WIDTH, LENGHT,
DEPTH AND CONSISTENCY

Width : How many different products lines

Length : Total Number of items in the mix/line

Depth : How many variants of each product in the line

Consistency : How closely related different product lines in terms of production

requirement, distribution channels etc.
PRODUCT MIX
PRODUCT LINE ANALYSIS
PRODUCT LINE LENGTH : LINE
STRETCHING

Down Market Stretch : It means adding low-end items in the product line

Up Market Stretch : Adding high end items in the product line..

Two way Stretch : Stretching the line in both direction if a company is in the middle of the market.
PRODUCT LINE LENGTH
 PRODUCT LINE LENGTH

Line Filling
Line Modernization
Featuring
Pruning
 PRODUCT MIX PRICING

Product Line Pricing - Involves the seperation of goods and services into cost categories in order to create various
percieved quality levels into minds of consumers.

Optional - Feature Pricing - It is a method through which company earns more through cross selling products along with
a basic core product

Captive - Product Pricing - Where products recieve compliments, companies will charge a premium price since the
consumer has no choice.
 PRODUCT MIX PRICING

Two - Part Pricing - Service firms engage in two-part pricing, consisting of a fixed fee plus a variable usage
fee.

By-product Pricing - The production of certain goods—meats, petroleum products, and other
chemicals—often yields by-products that should be priced on their value.

Product - bundling Pricing

Pure Bundle - Occurs when a firm offers its products only as a bundle.
Mix Bundle - The seller offers goods both individually and in bundles, normally charging less for the
bundle than if the items were purchased separately.
 CO-BRANDING AND
INGREDIENT BRANDING
Co-Branding - Marketers often combine their products with products from other
companies in various ways. Co-branding is also called as dual branding or brand
bundling—two or more well-known brands are combined into a joint product or marketed
together in some fashion.

Ingredient Branding - When materials, components or parts that are necessarily

combined with other branded products.
 PACKAGING

Packaging - Includes all activities

of designing and producing the
container for a product.
 FACTORS CONTRIBUTING TO THE
EMPHASIS ON PACKAGING

 Self Service
 Consumer affluence - Rising affluence means consumers are willing to pay a
little more for the convenience, appearance, dependability, and prestige of
better packages.
 Company/brand image - Packages contribute to instant recognition of the
company or brand.
 Innovation opportunity - Unique or innovative packaging can bring big
benefits to consumers and profits to producers
BRANDING AND PACKAGING
 LABELING

LABEL - is a simple tag elaborately

designed graphic that is part of the
package.
 WARRANTEES AND GUARANTEES

Warranties are formal statements of expected product performance by the

manufacturer. Products under warranty can be repaired, replaced or refunded within
a specific time period.

Guarantees are formal assurance that a certain condition will be fulfilled,

specifically in case of product quality.