Product definition

A product is a physical good, service, idea,

person or place that is capable of offering tangible
and intangible attributes that individuals or
organisations regard as so necessary, worthwhile, or
satisfying that they are prepared to exchange money,
patronage or some other unit of value in order to
acquire it.
What is a Product?
It is more than physical products; includes
services, places, persons, and ideas
It is tangible or intangible
Some products are sold only to consumers,
while others are sold to organizations
Whether a product is a consumer product or a
business product depends on how it is used
The Total
Product Product
quality Physical
Seller’s characteristics
services of goods

Seller’s
Price
reputation

Colour Brand

Product
warranty Packaging

Design
The anatomy of a product
Core Product:
Fundamental service or benefit that the customer is
really buying.
Buys Milk for family……
wants healthy family
It’s not the product itself, it’s what the product can
bring about
…

6
Tangible Product:
The product itself
Appearance
Quality
Functionality

7
Augmented Product
Providing
: features/services to customers not offered
by competitors
The product plus accompanying services
Service/maintenance
Buying environment
Warranties & return policies

8
Potential Product
Managing product/service/information to add more
 value for customers
status the product will bestow
Dependability
trade-in value
any aspect of the product that helps bring about the
core product
Product hierarchy
Need Family: The core need Eg. Future Security
Product Family: All the products that can satisfy the
core need Eg. Savings & Income
Product Class: A group of products within the
product family recognized as having certain
functional coherence Eg. Financial instruments.
Product Lines : A group of products within Product
Class that are closely related because they perform a
similar function, are sold to the same customer
groups, are marketed through same channels or fall
within same price range. Eg. Life insurance
Product hierarchy contd….
Product type: A group of products within Product line
that share one of several possible forms of the
product. Eg. Term Life
Brand The name, associated with one or more items
in the product line that is used to identify the source
or character of item. Eg…?
Product variant: A distinct unit within a brand or
product line that is distinguishable by size , price ,
appearance , or some other attributes.
Consumer Goods Classes
Consumer products can be classified by the
buying behaviour of the consumers:
Convenience goods are bought with little time
and effort, such as milk, bread, a chocolate bar.
Shopping goods are those where extensive
comparison is the norm-- cars, furniture, clothes.
Specialty goods are those for which consumers
have a strong brand preference. BMW, Armani.
Unsought goods are those now unknown to the
consumer or, if known, undesired.
Classification of consumer goods
Classifying Business Products
raw materials: unprocessed, become part of
other manufactured products
manufactured parts and materials: processed
products that become part of other products
installations: major buildings and equipment
accessory equipment: used in operations,
include computers, desks, tools
operating supplies: low value, used by most
firms, convenience products for businesses
Product Mix and Product Line
- A product mix is the set of all products offered for sale by a
company
- The structure of a product mix has both breadth and depth
- Its breadth is measured by the number of product lines
carried
- Its depth by the variety of sizes, colors, and models offered
within each product line
- A product line is a broad group of products, intended for
essentially similar uses and having similar physical
characteristics
Product Scope Illustration
Product-Mix Strategies
- To be successful in marketing, producers and middlemen
need carefully planned strategies for managing their
product mixes
- There are several product-mix strategies:
- positioning the product
- product-mix expansion
- alteration of existing products
- product-mix concentration
- trading up and trading down
Product-Mix Strategies
Positioning the Product
- Positioning is (again!) about bringing attention to
products and differentiating them from similar ones
- Several major positioning strategies can be found:
- Positioning in relation to a competitor
- Positioning in relation to a product class or
attribute
- Positioning by price and quality
Product-Mix Strategies
Product-Mix Expansion
- Product-mix expansion is accomplished by increasing the
depth within a particular line and/or the numbers of lines
a firm offers to customers
- Line extension: A company adds a similar item to an
existing product line with the same brand name
- Mix-expansion: A company adds a new product line to
its present assortment (the new line may be related or
unrelated to current products, it may also carry one of the
company’s existing brand names or may be given an
entirely new name)
 Brand equity has to be taken into consideration!
Product-Mix Strategies
Alteration of Existing Products
- Rather than developing a completely new product,
management might do well to take a look at the
organization’s existing offerings
- Product alteration: Improving an existing product
- Product alteration can be more profitable and less
risky than developing a completely new one
Product-Mix Strategies
Product-Mix Contraction
- Product-mix contraction: Carried out either by
eliminating an entire line or by simplifying the
assortment within a line
- The intended result of product-mix concentration is
higher profit from fewer products
- As a result, many organizations now have fewer
product lines, and the remaining lines are thinner and
shorter
Product-Mix Strategies
Trading Up and Trading Down
- The strategies of trading up and trading down involve a
change in product positioning and an expansion of the
product line
- Trading up: Adding a higher-price product to a line in order to
attract a broader market, the new product’s prestige should
help the sale of the existing lower-price products
- Trading down: Adding a lower-price product to a company’s
product line, the firm expects that people who cannot afford
the original higher-price product will buy the lower-price one
- But: Both approaches are perilous strategies because the new
products may confuse buyers, resulting in negligible net gain
What comes to your minds
What is brand ?
A company’s face in the marketplace
– What consumers know
– What they believe
– How they respond
The total view a consumer has of a company and it’s
“marks”
Differentiation within the market space
Definition
A brand is any name, design, style, words or
symbols, singly or in combination that distinguish
one product from another in the eyes of the
customer.
A brand is essentially a sellers promise to
consistently deliver a specific set of features,
benefits, and services to the buyer. A brand can
convey up to six levels of meanings
Attributes
Benefits
Values
Culture
Personality
User
 Branding terms

• Brand name - word or illustration that distinguishes one

seller’s goods from another.
• Trade name - the legal name of an organisation, which
may or may not relate directly to the branding of its
products.
• Trade mark - brand name, symbol, or logo which is
registered and protected for the owner’s sole use.
• Brand mark - the element of the visual brand identity
that does not consist of words but design and symbols.
Types of brands

National Brand

Private Brand

Generic Name Brand

Generic Goods
National Brand
products that carry the name of the
manufacturer
Private Brand
products that carry the name of the seller,
not the manufacturer
Generic Name Brand
A brand name over which the original owner has lost exclusive claim
because all offerings in the associated class of products have become
generally known by the brand name (usually that of the first or leading brand
in that product class).

• ie. Xerox is the company

“photocopy” is the generic name,
- other Eg. Vaseline
Generic Goods

non-branded products that sell at discount

Eg. dish soap, aluminum foil, etc.
 Brand Loyalty Categories

1. Brand Recognition (also called Brand Equity)

2. Brand Preference / Loyalty
3. Insistence
Brand Recognition / Equity - awareness, loyalty, quality,
emotion
Brand Preference / Loyalty - the degree to which
customers are committed to further purchases eg. I will
always buy Reebok (Brand Insistence)
________________________________________________
Brand Awareness -your product is the first that comes to
mind in a certain product category
eg. jeans-Levi’s, walkman - SONY
Brand Association - the link to favorable images,
celebrities, geographic regions
Benefits of branding