Chapter # 12

Setting the product and

brand strategy

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 The product and the marketing mix

Product - is anything that can be offered to a market

and that have the ability to satisfy a need or want.

physical goods places

services properties
experiences organizations
events Information and
persons idea

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 Product levels

Potential product

Augmented product

Expected product

Basic product

Core product

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 Product levels / customer
value hierarchy

Core product: The (core benefit) fundamental

service or benefit that a customer is really buying. A
hotel guests is buying “rest and sleep.”
Basic product: Turn core benefit into basic product.
Thus a hotel room includes a bed, bathroom, towel,
desk and closet.
Expected product: A set of attributes and conditions
buyer normally expect with the product they buy. A
hotel guests expect a clean bed, fresh towel,working
lamp and a relative degree of quiet.

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 Product levels / customer
value hierarchy
Augmented product: Product augmentation leads the
marketer to look at the user’s total consumption system.
In the form of packaging, service, delivery
arrangements and other things that add value.
Following things must be noted :
1. Each augmentation adds cost.
2. Augmented benefits soon become expected benefits.
3. As company raise their augmented product’s price
competitors offer a ‘stripped-down’ version at lower
price.
Potential product: encompasses all possible
augmentations and transformations the product or
offering might undergo in the future. 5
 Product classification

Marketers have classified products on the basis of

characteristics : durability, tangibility, and use
(consumer or industrial). Each product type has an
appropriate marketing mix. Product’s broad
classifications are as follows.
Durability and tangibility
Consumer goods
Industrial goods

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 Product classification

Non-durable goods are tangible goods normally

consumed in one or few uses, like soap, soft drinks
• consumer consume quickly and purchased frequently
• strategy is to make the product available in many
locations, charge small mark up and advertise heavily.

Durable goods are tangible goods normally survive

many uses, like refrigerators, clothing
• require more personal selling and service, command a
higher margin and more sale’s guarantees.

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 Product classification

Services are intangible, inseparable, variable

and perishable products – require more quality
control, supplier credibility. Example: haircuts and
repair.

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Characteristics of Services
 Consumer-goods classification

Convenience goods
Shopping goods
Specialty goods
Unsought goods
We will discuss these classifications in terms of the
following considerations
 Consumer buying behavior
 price
 distribution and
 promotion
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 Convenience goods

Buy frequently & immediately

With minimum comparison and buying effort
Low priced
Widespread distribution, convenient locations
Mass promotion by the producer
Example:Toothpaste, magazines, soap, candy
Classified as :
Staples goods: Regular basis-toothpaste
Impulse goods : Without any planning-ice-cream
Emergency goods : Urgent basis-umbrella 11
 Shopping goods

Buy less frequently with much planning and

shopping effort
Comparison of brands based on suitability, quality,
price & style
Higher price than the price of convenience goods.
Selective distribution in fewer outlets
Advertising and personal selling by both producer
and reseller
Example: Television, furniture, clothing etc.
Classified as :
Homogeneous: similar in quality but different in price
Heterogeneous: product features and services 12
 Specialty goods

Unique characteristics or brand identification

Buyer willing to make a special purchasing effort
Strong brand preference and loyalty
Little comparison of brands, Low price sensitive
Higher price
Exclusive distribution in only one or few outlets per
market area.
More carefully targeted promotion by both
producer and reseller
Example: Rolex watches, Mercedes Benz, BMW.
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 Unsought goods

New innovations - consumer does not know about

the product
Or does not normally think of buying
Price and distribution will vary
Require much advertising & personal selling support
Example: Smoke detectors, Life insurance, & blood
donations etc

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Industrial-goods Classifications

Materials and Parts

Capital items
Supplies and Services

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 Materials and Parts

Include raw materials and manufactured materials

& parts
Raw materials consist of
 farm products ( wheat, cotton, fruits etc.)
 natural products (fish, crude petroleum etc.)
Manufactured materials and component parts
 component materials (iron, cement etc.) and
 component parts ( small motors, tires etc.)

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 Capital Items

 Aid in buyer’s production or operation

 Including installations and accessory equipment
 Installations consist of major purchases such as
buildings ( factories, offices) and fixed equipments
( generators, large computer system)
 Accessory equipment include portable factory
equipments and tools ( hand tools, lift trucks) office
equipments (computers, fax machine)

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 Supplies and Services

 Supplies includes operating supplies (lubricant,

paper, pencil etc.) maintenance and repair items
(paints, nails etc.)
 Business services include maintenance and repair
services ( widow cleaning, computer repair) and
business advisory service (legal, management,
consulting, advertising)

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 Product Differentiation (1)

 Form: (the size, shape, or physical structure)

 Features:
 Customization:
 Performance quality: (Performance quality is
the level at which the product’s primary
characteristics operate.)
 Conformance quality: (the degree to which all
produced units are identical and meet promised
specifications)

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 Product Differentiation (2)

 Durability: (a measure of the product’s expected

operating life)
 Reliability: (measure of the probability that a
product will not malfunction or fail within a
specified time period)
 Repairability:
 Style:

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 Product Mix

A product mix (called product assortment) is the set of

all products and items that a particular seller offers for
sale.
A company’s product mix has certain –
Width – how many products lines the company
carries.
Length – the total numbers of items in the mix.
Depth – refers to how many variants are offered of
each product in the line - size, color, flavor
Consistency – refers to how closely related the
various product in end use, production requirement
and distribution channel etc. 21
 Product Mix

Product Mix Width

Fabric Care Household Personal Deodorants

Care Cleaning
Ivory Snow Ivory Ivory Secret
Product Dryel Comet Camay Sure
Line
Tide Mr. Clean Olay Old Spice
Length
Joy Swiffer Coast
Cheer Zest
Oxydol Safeguard

Selected Proctor and Gamble Products 22

 Product and Service Decisions
Individual Product and Service Decisions

Packaging involves designing and

producing the container or
wrapper for a product

Labels identify the product or

brand, describe attributes, and
provide promotion
 Product and Service Decisions
Product Line Decisions

A product line is a group of products that are

closely related because they function in a similar
manner, are sold to the same customer groups, are
marketed through the same types of outlets, or fall
within given price ranges.
Product line length is the number of items in the
product line.
 Line stretching
 Line filling
 Product and Service Decisions
Product Line Decisions

 Line stretching: Line stretching occurs when a company

lengthens its product line beyond its current range, whether
down-market, up-market, or both ways.
 Down-Market Stretch A company positioned in the middle
market may want to introduce a lower-priced line.
 Up-Market Stretch Companies may wish to enter the high
end of the market to achieve more growth, or realize higher
margins.
 Product and Service Decisions
Product Line Decisions

 Two-Way Stretch Companies serving the middle

market might stretch their line in both directions.

 Line filling: Product line filling involves adding

more items within the present range of the line.
Product and Service Decisions
Product Line Decisions
 Product and Service Decisions
Product Mix Decisions
Product mix (or Product portfolio) consists of all
the products and items that a particular company
offers for sale. A company’s product mix has four
important dimensions:
 Width
 Length
 Depth
 Consistency
 Product and Service Decisions
Product Mix Decisions

 Product mix width refers to the number of

different product lines the company carries.
 Product mix length refers to the total number of
items a company carries within its product lines.
 Product mix depth refers to the number of
versions offered for each product in the line.
 Product and Service Decisions
Product Mix Decisions

 Finally, the consistency of the product

mix refers to how closely related the
various product lines are in end use,
production requirements, distribution
channels, or some other way.
 Product and Service Decisions
Product Mix Decisions: Consistency

• Michelin
has three
distinct, but
somewhat
related,
product
lines.
(Tourist
guide,
Restaurant
guide, and
 Product and Service Decisions
Product Mix Decisions

•Product mix decision: Sony has a large a diverse product

portfolio, divided into four primary product business, each
containing hundreds of product. “Welcome to the world of Sony”
Product and Service Decisions
Product Mix Decisions

•Product mix: Sony ‘s product mix

consists thousand of products within its
four primary product lines, Electronics,
 Branding decision

The first decision is whether to develop a brand

name for a product or not. If the decision is yes,then
consider the following decision
Brand-sponsor decision
Brand-name decision
Brand strategy decision
Brand repositioning decision

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 Branding decision

Brand-sponsor decision
Manufacture brand - Many consumer prefer certain
national brand
Many product categories are not feasible or attractive on a
private brand basis
Distributor brand - More profitable
- Differentiate themselves from competitors
Licensed brand -

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 Branding decision

Brand-name decision
Individual names - Best name for each product, Does
not tie its brand reputation to the product’s- good quality
(Seiko), Low quality (pulsar)
Blanket brand name - Development cost is less, instant
recognition- Campbell soup
Separate family names - Company produces quite
different products-Sears (Kenmore-appliances), Holmart-
major home installations
Company individual names - Corporate name
combined with individual product names - Pran 36
 Branding decision

Brand strategy decision

Line extensions
Brand extensions
Multi-brands
New-brands
Co-brands

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 Branding decision

Product Category
Existing New
Brand Name

Existing Line Brand

extension extension

New
Multibrands New brands

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