11 Ippt

11
Setting
11
Product Strategy
Setting Product Strategy
Chapter Questions
 What are the characteristics of products and
how do marketers classify products?
 How can companies differentiate products?
 Why is product design important and what
factors affect a good design?
Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from 11-2
the United States edition of Marketing Management, 14e.
Chapter Questions
 How can a company build and manage its
product mix and product lines?
 How can companies combine products to
create strong co-brands or ingredient brands?
 How can companies use packaging, labeling,
warranties, and guarantees as marketing
tools?
What Is a Product?
A product is anything that can be offered to

a market to satisfy a want or need, including
physical goods, services, experiences,
events, persons, places, properties,
organizations, information, and ideas.
Figure 11.1 Components of the
Market Offering
Figure 11.2 Five Product Levels
Product Classification Schemes
Durability
Tangibility
Use
Durability and Tangibility
Nondurable goods
Durable goods
Services
Consumer Goods Classification
Convenience
Shopping
Specialty
Unsought
Industrial Goods Classification
 Materials and parts
 Capital items
 Supplies/business services
Product Differentiation
 Product form  Durability
 Features  Reliability
 Customization  Repairability
 Performance  Style
 Conformance
Service Differentiation
 Ordering ease
 Delivery
 Installation
 Customer training
 Customer consulting
 Maintenance and repair
 Returns
Design
The Product Hierarchy
Guidelines for Marketing Luxury
Brands
Product Systems and Mixes
Figure 11.3 Product-Item
Contributions to a Product Line’s
Total Sales and Profits
Figure 11.4 Product Map for a
Paper-Product Line
Source: Benson P. Shapiro, Industrial Product Policy: Managing the Existing Product Line (Cambridge,
MA: Marketing Science Institute Report No. 77–110). Copyright © 2003. Reprinted by permission of
Marketing Science Institute and Benson P. Shapiro.
Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
Product-Mix Pricing
 Product-line pricing
 Optional-feature pricing
 Captive-product pricing
 Two-part pricing
 By-product pricing
 Product-bundling pricing
What Is Cobranding?
In co-branding—also called 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
Requirements for successful ingredient
branding
1. Consumers must believe the ingredient matters to
the performance and success of the end product.
2. Consumers must be convinced that not all
ingredient brands are the same and that the
ingredient is superior.
3. A distinctive symbol or logo must clearly signal
that the host product contains the ingredient.
4. A coordinated “pull” and “push” program must
help consumers understand the advantages of the
branded ingredient.
What is the Fifth P?
Packaging, sometimes called the 5th P,

is all the activities of designing and
producing the container for a product.
Factors Contributing to the
Emphasis on Packaging
 Self-service
 Consumer affluence
 Company/brand image
 Innovation opportunity
Packaging Objectives
Functions of Labels
 Identify the product or brand

 Grade it
 Promote it
For Review
 What are the characteristics of products and
how do marketers classify products?
 How can companies differentiate products?
 Why is product design important and what
factors affect a good design?
Also for Review
 How can a company build and manage its
product mix and product lines?
 How can companies combine products to
create strong co-brands or ingredient brands?
 How can companies use packaging, labeling,
warranties, and guarantees as marketing
tools?

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A product is anything that can be offered to

In co-branding—also called dual branding or

Packaging, sometimes called the 5th P,

 Identify the product or brand

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