Chapter 1

Introduction to
Product, Product levels and
Product Classification.

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 Contents
• Product
• Product levels
• Product classification:
• Consumer Products
• Industrial Products

• Product Classification as other marketable

entities
• Individual Product Decisions
• Product Attribute Decisions
• Introduction to Brands and Branding
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 What is a Product?

• Product - Anything that can be offered to a market for attention,

acquisition, use or consumption.

• Satisfies a want or a need.

• Includes:
– Physical Products
– Services
– Persons
– Places
– Organizations
– Ideas
– Combinations of the above
Levels of product

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The five product levels are:
levels of product:
Core benefit:
The fundamental need or want that consumers satisfy by consuming the product or service. For example, the need to
process digital images.

Generic product:
A version of the product containing only those attributes or characteristics absolutely necessary for it to function. For
example, the need to process digital images could be satisfied by a generic, low-end, personal computer using free
image processing software or a processing laboratory.

Expected product:
The set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. For
example, the computer is specified to deliver fast image processing and has a high-resolution, accurate colour screen.

Augmented product:
The inclusion of additional features, benefits, attributes or related services that serve to differentiate the product from
its competitors. For example, the computer comes pre-loaded with a high-end image processing software for
absolutely no extra cost or at a deeply discounted or incremental cost.

Potential product:
This includes all the augmentations and transformations a product might undergo in the future. To ensure future
customer loyalty, a business must aim to surprise and delight customers in the future by continuing to augment
products. For example, the customer receives ongoing image processing software upgrades with new and useful
features.
 Product Classifications
> Buy less frequently
> Gather
1. Consumer Products - for personal consumption. Theyproduct
are further classified as
information
below: > Fewer purchase locations
• Convenience products > Compare for:
• Suitability & Quality
• Shopping products • Price & Style
• Specialty products
• Unsought products

2. Industrial Products - products purchased for further processing or for use in

conducting a business. They are further classified as
• Materials and parts
• Capital items
• Supplies and services.
 Convenience Products
Convenience products customer usually buys frequently,
immediately, and with a minimum comparison and buying effort.
Ex. Newspapers, Candy, Fast food

• Requires very little buying efforts.

• Are low priced.
• Due to widespread distribution, these are available in
different convenience locations according to consumer wants
and needs.
• Producers adopt mass promotion strategies.

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 Shopping Products
Shopping products - are consumer products and services
that customer compares carefully on suitability, quality,
price, and style. Ex. Furniture, Cars, Appliances.

• These are products that are less frequently purchased.

• Consumers need shopping efforts and planning to
decide and compare this type of consumer products.
• In the selecting and purchasing process, customers keep
in mind the attributes like product quality price and
design.
• Consumers spend more of their time and efforts to
gather information and compare available alternatives.
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 Specialty Products
Specialty products – These are with unique characteristics
or brand identification for which a significant group of
buyers is willing to make a special purchase effort. Ex.
Medical services, Designer clothes, High-end electronics.

• This type of consumer products, consumers make efforts

in the decision-making process.
• Specialty products need serious efforts to make a
purchase. Specific consumers are involved in purchasing
efforts.
• These products are highly priced and follow exclusive
distribution and available in fewer outlets.
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 Unsought Products
Unsought products - These are consumer products that
the consumer does not know about or knows about but
does not normally think of buying. Ex. Life insurance,
Funeral services, Blood donations.

• Consumers don’t care about these types of

products and think about it when they need it.
• Unsought product pricing and distribution varies,
and promotion strategies need aggressive
marketing efforts i.e. more advertising and
personal selling than other types of products.
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Product Classifications
Industrial Products

Materials
Materials
and
and
Parts
Parts

Capital
Capital
Items
Items

Supplies
Supplies
and
and
Services
Services
 Industrial Products
(i) Materials and Parts: The goods that enter the
manufacturer’s products completely are classified as Materials and
parts.
Such goods are of two types:

1. Raw material: Raw material that has to be manufactured

is classified as manufactured materials. Including farm products
like cotton, sugar cane, oilseed and natural products such as
minerals (gas, iron ore), fish and lumber;
2. Manufactured material and parts. These are again of two
types – component materials like glass, iron, plastic and component
parts such as electric bulb, steering, and battery.

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 Industrial Products
ii) Capital Items: To make any manufacturing business
or large scale industry possible, capital items are used.
• These are such goods that are used in the production of
finished goods.
• These products have different buying motives and have
different attitudes and use different approaches in the
purchase of the products.
• These include installations like elevators, mainframe
Computers, and equipment like Hand Tools, Personal
Computer, Fax Machines etc.

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 Industrial Products
iii) Supplies and Business Services: These are short-
lasting goods and services that facilitate developing or managing
the finished products.
• Any short term goods or material that is necessary for the day
to day operations or a company or businesses is termed as
supplies.
• Business services describes work that supports business
operations.
• Supplies and Business Services never become part of the
finished goods but they are used to facilitate the business
operation.
• Supplies examples are brooms for cleaning the factory floor,
stationary, and lubricating oil. Business Services example is
technology support. 14
Individual Product Decisions
Product
Product Attributes
Attributes

Branding
Branding

Packaging
Packaging

Labeling
Labeling

Product
Product Support
Support Services
Services
 PRODUCT ATTRIBUTES
Product attributes are the benefits of the product or service. It includes:
 Quality
 Features
 Style and design

• In stage one of the individual product decisions includes defining the

product attributes, such as quality, features, style and design.
• Product benefits are communicated as well as delivered by the product
attributes.
• Individual product decisions start by deciding on product attributes,
this, in turn, means that the development of a product starts by
defining the benefits it will offer to consumers.

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 BRANDING
The second stage of individual product decisions.
• A brand is a name, term, sign, symbol, design or a combination
of these elements that identifies the products or services of
one seller and differentiates them from those of competitors.

Characteristics:
1. It adds significant value to a product.
2. Branding has become so strong that hardly anything goes unbranded.
3. Main tool that marketers use to distinguish their products from
their competitor’s offerings.

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 PACKAGING
Stage third is Packaging.
Packaging refers to activities of designing and producing the wrapper or
container for a product.
• Traditionally, the primary function of a package was to hold and protect the product.
• Packaging must now perform many tasks, which include attracting attention, describing
the product, and even making the sale.
• Poorly designed packages can harm a lot of businesses.
• “Green” packaging, meaning the use of environmentally responsible packaging materials,
becomes more and more important and adds value to many products.

Types of Packaging:
 Primary packaging - protects the product from damage.
 Secondary packaging - intended to protect not only the product, but also the primary
packaging, which often is the packaging most visible to the consumer in retail displays.
Examples include cardboard cartons, cardboard boxes and cardboard/plastic crates.
 Tertiary packaging - used for the protection and shipping of a product.
Example - Any company that ships any kind of good uses tertiary packaging in the distribution
process.

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 LABELLING
• Labelling – It identifies the product or brand and describes several things
about the product: who made it, where and when was it made, the
contents, how it is to be used etc.

• A label should only show and state what is true and what the customer can rely
upon.
• Misleading or deceptive labels must be seen as unfair competition.
• Legal consequences are likely to follow if:
 labels mislead customers,
 fail to describe important ingredients
 or even fail to mention required safety warnings

• Importance:
 Label can promote a brand.
 It supports the brand’s positioning
 May help to connect with customers.
 By a brand logo, the label can add personality to a brand and contribute to the brand
identity.
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 Brand Definitions

“A Brand is a distinguishing name and / or

symbol intended to identify the goods and
services of one seller and to differentiate
those goods and services from those of
competitors.”
David Aaker
American Marketing Association Definition
for Brand
• A name, term, design, symbol, or any other
feature that identifies one seller’s good or
service as distinct from those of other sellers.
The legal term for brand is trademark. A brand
may identify one item, a family of items, or all
items of that seller. If used for the firm as a
whole, the preferred term is trade name
(AMA).

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 American Marketing Association Latest
Definition on Brands
• "A brand is a customer experience represented
by a collection of images and ideas; often, it
refers to a symbol such as a name, logo, slogan,
and design scheme. Brand recognition and
other reactions are created by the
accumulation of experiences with the specific
product or service, both directly relating to its
use, and through the influence of advertising,
design, and media commentary."
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 Marketing
I am a great Painter
 Branding
I understand you are a great
painter
 Figure 1.2: Authors Shaping Brand Meaning

Firms Users

Brand Brand
Stories Stories
Shared
Brand Meaning
Brand Brand
Stories Stories

Popular
Influencers
Culture

Source: Adapted from Holt (2003, p.3)

 Branding Principles
1. Brand meaning is co-created.
2. Brand marketers matter!
3. Context matters.
4. Co-creating serves latent (often social) needs.
5. Branding is about identity.
6. Brands are assets.
7. Brands drive everything we do including
commas.
8. Branding must abide ethical norms.
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