Marketing 25 chapter 4


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Marketing 25 chapter 4

  1. 1. Paul Adrianne Jacinto Babylyn Hernandez Geneveive Lara Vience Grampil
  2. 2. Outline <ul><li>A. Product B. Branding </li></ul><ul><li>Maslow Hierarchy needs Why Brands Exist </li></ul><ul><li>Types of Products Brand name Criteria </li></ul><ul><li>Levels of Products No meaning Names </li></ul><ul><li>Customers-Oriented Product Framework Brand Concept Mgnt. </li></ul><ul><li>Quality Brand Equity </li></ul><ul><li>look –Alive Products </li></ul><ul><li>ISO 9000 </li></ul><ul><li>New Product Opportunity </li></ul><ul><li>New Product Development </li></ul><ul><li>New Product Development Process </li></ul><ul><li>Product Life Cycle </li></ul>
  3. 3. Outline <ul><li>C. Packaging </li></ul><ul><li>Packaging Requirements for unit Packs </li></ul><ul><li>Packaging Brief </li></ul><ul><li>Label Development Process </li></ul><ul><li>D. Managing Product Line E. Green Marketing </li></ul><ul><li>Boston Consulting Group Grid Green Products </li></ul><ul><li>General Electric Matrix Environmental Threats </li></ul>
  4. 4. Objectives <ul><li>To Know the Product Strategy </li></ul><ul><li>To know about Product, Branding, Packaging, Managing Product line and Green Marketing. </li></ul>
  5. 5. <ul><li>For the poor majority, the downscale consumers, the issue is not product quality. It is simply product. It is not quality of life that matters for them what matters is simply life. Survival” </li></ul><ul><ul><ul><ul><ul><li>Dr. Eduardo Roberto </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Professor Asian Institute of Management </li></ul></ul></ul></ul></ul>
  6. 6. What is Product Strategy? <ul><li>The ultimate vision of the product, as it states where the product will end up. By setting a product strategy, you can determine the direction of your product efforts. </li></ul><ul><li>Similar to making effective use of a map, you first need a destination, and then you can plan your route. Just as a business has a strategic vision of what it wants to be when it grows up, the product has its own strategy and destination. </li></ul>
  7. 7. TWO Fundamental product questions <ul><li>What are my target market (Target customers) </li></ul><ul><li>What are their needs and wants? </li></ul>
  8. 8. Maslow Hierarchy of needs model
  9. 9. Example: ( Drinking Water market) <ul><li>Drinking water directly from the tap may satisfy a physiological need for thirst. </li></ul><ul><li>Boiling water may satisfy safety need against bacteria </li></ul><ul><li>Drinking bottled water may satisfy social need of having water that tastes well. </li></ul><ul><li>Drinking imported and high-end Perrier may satisfy an ego need for a status symbol </li></ul><ul><li>Embarking on a membership cum charity club where the “best bottled water of the world” will be shipped to you monthly may satisfy the need for self actualization </li></ul>
  10. 10. 3 Types of Products <ul><li>Durables- which have a long interval between repeat purchases. Examples are: </li></ul><ul><li>Floor polishers like Wilson and GE </li></ul><ul><li>Cars like Mitsubishi and Nissan </li></ul><ul><li>TV sets like Philips and Samsung </li></ul><ul><li>Non- Durables- which have stronger repeat purchases. Examples are: </li></ul><ul><li>Detergents like Surf and Tide </li></ul><ul><li>Ice cream like Selecta and Swiss Miss. </li></ul><ul><li>Audio/video cassette tapes like Sony and TDK. </li></ul>
  11. 11. <ul><li>Services- which are essentially intangible because there are no physical products involved. Example are as follows: </li></ul><ul><li>Auto serve center with the likes of Ambassador Inmogo or Zafra motors. </li></ul><ul><li>Beauty parlors like David salon or Ricky Reyes </li></ul><ul><li>Training services provided by Mansmith and Fielders, Inc. or the Cora Doloroso Career Center. </li></ul>
  12. 12. <ul><li>Effort – it is an objective measurement of the value the consumer place on the product. </li></ul><ul><li>Risk – which is the buyer’s subjective feeling about the consequences of making a purchasing mistake. </li></ul><ul><li>Exceptions (considerations) – exist in categorizing products according to effort and risk. </li></ul>Consumer satisfaction Evaluation
  13. 13. Four Types of Product according to customer’s effort and risk <ul><li>Convenience Products – are the lowest risk and lowest effort products where either none or very small decision-making is made by target consumers before buying the product. </li></ul><ul><li>Two types of Convenience Products </li></ul><ul><li>Staple Goods – Such as rice & sugar </li></ul><ul><li>Impulse goods – such as candies & snack food </li></ul>
  14. 14. <ul><li>consumers have “ specific” preferences for brands or suppliers but are willing to make substitutions when necessary, such as during stock-out situations. </li></ul><ul><li>Known brands like Colgate. Close-up are perceived to be less risky than buying unknown brands. Which may end up hurting the consumer’s gum. </li></ul><ul><li>Serving cheap beer instead of San Miguel or Budweiser beer in a party may lead to host being ridicules by the guest. </li></ul>Preference Goods
  15. 15. Shopping Goods <ul><li>consumer goods purchased less frequently than convenience goods, and thus requiring some information search and evaluation; related to limited problem solving buying behavior. </li></ul><ul><li>are usually high risk products where consumers like to shop around to find the best features and price for that product.. Examples include buying fridges, freezers or washing machines. </li></ul><ul><li>perceived by consumers as markedly different in quality and attributes, price is consequently less important hidden objection an unstated objection which a prospective buyer has to a product offered by a salesperson . </li></ul>
  16. 16. Specialty Goods <ul><li>have particularly unique characteristics and brand identifications for which a significant group of buyers is willing to make a special purchasing effort. Examples include specific brands of fancy products,  luxury cars , professional photographic equipment, and high-fashion clothing. For instance,  consumers  who favors merchandise produced by a certain shoe manufacturer or furniture maker will, if necessary, travel considerable  distances  in order to purchase that particular brand. In specialty-goods markets, sellers do not encourage comparisons between options; buyers invest time to reach dealers carrying the product desired, and these dealers therefore do not necessarily need to be conveniently  .. </li></ul>
  17. 17. Graph Representation
  18. 18. 3 Levels of Product <ul><li>Level 1: Core Product . What is the core benefit your product offers? Customers who purchase a camera are buying more than just a camera they are purchasing memories. </li></ul><ul><li>Level 2 Actual Product : All cameras capture memories. The aim is to ensure that your  potential  customers purchase your one. The strategy at this level involves  organizations  branding,  adding  features and benefits to ensure that theirproduct offers a differential advantage from their competitors. </li></ul><ul><li>Level 3: Augmented product:  What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on.  John Lewis  a retail departmental store offers free five year guarantee on purchases of their Television sets, this gives their `customers the additional benefit of ‘ piece of mind’  over the five years should their purchase develop a fault. </li></ul>
  19. 19. <ul><li>“ It is important that marketers realize the benefits desired or the purchase decision criteria of their customers as customer do not buy products themselves but the benefits of these products provide” For instance: </li></ul><ul><li>Pharmaceutical products must pass the purchase criteria requirements of the therapeutic committee of hospitals and industrial clinics to be included in their “formulary”, a list of therapeutic products authorized, endorsed and carried by hospital and clinic pharmacies. Products included in the formulary have the build-in advantage versus competition, as doctors will prescribe these medicines carried in their hospital pharmacy to their patients. </li></ul><ul><li>Airports buy X-ray machineries, not only to facilitate travel and comfort of their passengers, but also to ensure security for its airplanes, properties and people. </li></ul>
  20. 20. Customer Purchase Decision Criteria <ul><li>“ Change Gear ” - is a salesmanship technique that highlights that major capabilities of a product and dwarfs the lesser differentiated features. This technique is used in the hope that the customer may be convinced of the advantages of the products major capabilities. </li></ul><ul><li>Emphasis must also be given in meeting the changing customer purchase decision criteria over time to ensure that the company’s products will not become obsolete. </li></ul><ul><li>Two methods on satisfying customer’s needs and wants: </li></ul><ul><li>Problem Solving method </li></ul><ul><li>Creating Dissatisfaction method </li></ul>Company’s Differentiation Low High High Low Improve or Change Gear Maintain Low priority Possible overkill
  21. 21. Mansmith and Fielders, Inc. product Philosophy <ul><li>A product can either be superior, at parity with or inferior to those of competition. Take for instance the canned corned beef market. </li></ul><ul><li>Product Philosophy No.1 </li></ul><ul><li>“ no relevant product advantage from competition must be allowed to exist” </li></ul><ul><li>Note: the word “relevant” as the product may have certain advantages but these advantages may not be meaningful to the customer. For a product advantage to be truly meaningful, it should satisfy the following criteria. </li></ul><ul><li>A real consumer need exists; </li></ul><ul><li>The product offers a unique benefit; and </li></ul><ul><li>The product actually delivers the benefit. </li></ul>
  22. 22. <ul><li>Product – launching similar version; or even reverse strategy to offense instead of defenses by introducing additional features such as easy pull tab cans at the same or- even at a lower price. </li></ul><ul><li>Price- offer a lower price of their regular corned beef to temporarily discourage trial of the new swifts all-lean corned beef; </li></ul><ul><li>Promotions - Preempt the successful launching of swifts by loading homes with pure foods corned beef. This can be done by offering, attractive free gifts for every can of Purefoods regular corned beef purchased at the retail level; </li></ul><ul><li>Placement – improve and increase display by renting, island displays at class A supermarkets reinforced with more attractive point-of-purchase shelf takers and price tags. </li></ul>
  23. 23. Quality <ul><li>Is an important competitive weapon that can result in increased market shares fr the firm, Quality as conforming to customer’s specifications, measured through customer’s satisfaction and not self-gratification. “A product quality is evaluated as high or low depending on its relative excellence or superiority among products or services that are viewed as substitutes by the consumer. </li></ul><ul><li>Attributes that signal quality have often been divided into intrinsic and extrinsic cues (Olson and Jacoby 1972) </li></ul><ul><li>Intrinsic cues involve he physical composition of the product such as the flvor, color and sweetness in an orange drink. </li></ul><ul><li>Extrinsic cues are product-related but not part of the physical product itself such as the brand name, price, warranty, product form, and level of advertising. Extrinsic cues act as substitute when instrinsic cues are not available at the point of purchase </li></ul>
  24. 24. Ten learning lessons about “ quality and customer satisfaction” <ul><li>Before a disappointing experience, consumers take a broad general concept of quality. It is stated almost like the statistician’s “null hypothesis” – “in a quality product, nothing must go wrong”. </li></ul><ul><li>It is when something goes wrong that consumers are able to go into the specific quality elements. </li></ul><ul><li>It is also when consumers are able to compare that they are able to say something about especific quality elements. </li></ul><ul><li>To the consumer, there is such a thing as the right amount of quality. More is not necessarily better, Neither is lesser. “ Just right is the right amount”. </li></ul><ul><li>When consumers do go into the specific quality elements, they often need to be probed in order that their concept of quality becomes truly specific. </li></ul>
  25. 25. <ul><li>To the consumer, there is such a thing as the right kind of quality. Each kind defines a need segment that must be satisfied. </li></ul><ul><li>It is the product's unexpected quality characteristic that impresses the consumer the most. The more unexpected that quality characteristic is, the deeper the consumer’s favorable impression and satisfaction. </li></ul><ul><li>There is a certain kind of customer satisfaction that they may be called a lower order because it results in, at most, a retrial. </li></ul><ul><li>There Is a second kind of customer satisfaction that is longer lasting. It is a satisfaction that brings the consumer to a committed usage of the product. It results in consumer “loyalty” </li></ul><ul><li>For the poor majority, the downscales consumers, the ssue in targeting marketing perfection is not product quality. It is simply product. It is not quality of life that matters to them. What matters is simply life. Survival. </li></ul>
  26. 26. Look alike Products <ul><li>Technology enables products to be imitated and counterfeited more easily nowadays. Levi’s jeans, Microsoft computer programs, AMC cookware, Yale lock sets, Coleman water containers, Philips light bulbs, Casio, G-shocks, Prada bags, and Fundador brandy are some of the products that enjoy wide brand recall and market acceptability. This makes them primary targets of unscrupulous manufactures selling look-alike products. </li></ul>
  27. 27. New Product Opportunity <ul><li>Note that the product could come either as a totally new product in an existing market (Product Development ) or as an existing product in an existing market (Market Penetration) or as a product which may or may not need some modification to enter a new market ( Market Development). </li></ul><ul><li>New products are acknowledged as the source of long-term growth for any firm. New products must be coherent with existing products or markets. This means new products must be related to the existing market such as having new, improve features, new technology, or new brands (Brand Proliferation) to increase the hold of the company on the market. </li></ul>
  28. 28. New Product Development <ul><li>Two sets of needs must be met in new product development. One is internal which looks at the company’s objectives and resources, while the other is external which looks at the customer’s needs and wants. </li></ul><ul><li>PLDT launched the Tele-Tipid prepaid cards for their land lines not only to expand their base of users to the broad C and D income class by encouraging them to avail of a telephone at a relatively low cost, and also to shield the company from potential collection problems in the future. </li></ul><ul><li>Food Manufacturing companies launched value-added chicken products like-chicken nuggets not only to provide variety to the consumers but also to enable them to charge a higher price and profit. </li></ul>
  29. 29. New product development program <ul><li>To effectively respond to changing customer’s needs and wants. </li></ul><ul><li>To effectively respond to competitors and other threats fast. </li></ul><ul><li>Marketing strategy formulation must begin outside of the firm so that business is constantly focused on marketing opportunities. In order to do this, an environmental analysis and assumptions that can predict demand should be done. </li></ul>
  30. 30. Environmental analysis and assumptions for product development <ul><li>Customer lifestyle </li></ul><ul><li>Macro and micro economics </li></ul><ul><li>Raw Materials Costs, Availability and limitations </li></ul><ul><li>Competition </li></ul><ul><li>Technology </li></ul><ul><li>Social forces </li></ul><ul><li>Government </li></ul>
  32. 32. Possible product criteria for retail stores <ul><li>Product Uniqueness </li></ul><ul><li>Good Value </li></ul><ul><li>Advertising Support </li></ul><ul><li>Profitability </li></ul><ul><li>Introductory Discounts or allowances </li></ul><ul><li>Company reputation </li></ul>
  33. 33. Idea generation <ul><li>Mission Statement </li></ul><ul><li>Focus Group Discussions </li></ul><ul><li>Competitive Products Segmentation </li></ul><ul><li>Perceptual Mapping </li></ul><ul><li>Items by use </li></ul>
  34. 34. Cecilio Pedro <ul><li>One of the ten Outstanding Young Filipinos in 1991 and 1992 AGORA awardee for marketing excellence, was forced into the toothpaste business after his major customers shifted to the more convenient laminated plastic toothpaste tubes in the 1987. Because Mr. Pedro was supplying aluminum toothpaste tubes since 1977. </li></ul><ul><li>Mr. Pedro’s success was exceptioanl. Luck(God’s will), and timing played a major role. There must be systematic ways to regulary get new product ideas aside from using a company’s suggestion box attracting ideas from any employee. </li></ul>
  35. 35. Company’s Differentiation Quality of Service Few Many Very Friendly Not so Friendly Concentrates only on the determinant attributes of a product.
  36. 36.   a  graphics  technique used by asset  marketers  that attempts to visually display the perceptions of customers or potential customers. Typically the  position  of a  product ,  product line ,  brand , or company is displayed relative to their competition.
  37. 37. The starting point in “items by use” is to determine how existing consumers see existing products.
  38. 38. Idea screening procedures are needed to eliminate ideas generated with poor or low potential, and allow those with superior potential to go further.
  39. 39. One of the objectives of idea screening is to determine underlying unsatisfied consumer needs in the product usage situation. <ul><ul><li>Is there an existing product weakness to be exploited? </li></ul></ul><ul><ul><li>Is there a market need for additional products? </li></ul></ul>
  40. 40. How will the proposed product satisfy the consumer needs? What consumers needs exist? What specific product will make customers satisfaction possible?
  41. 41. Defining more parameters before an actual (and sometimes very expensive) product prototype will be assembled. <ul><ul><li>Financial Analysis and Marketing Mix plan </li></ul></ul><ul><ul><li>Communication Plan </li></ul></ul><ul><ul><li>Target Market </li></ul></ul>
  42. 42. A product advantage that cannot be communicated effectively has no value to the consumers. Communication plan brings to life the one-page product concept paper presented during the idea-screening phase.
  43. 43. This is the guesses are derived. The stage that a budding product champion may meet all key company decision makers for the first time.
  44. 44. Marketers must know the basic as well as the motivating features of a product.
  45. 45. This technique is designed to identify the motivating key features customers use to differentiate product Also known as Trade-off Study
  46. 46. A product brief is submitted by the marketing man to their technical product researchers to formalized prototype development.
  47. 47. During product development prototype testing, always give more than what is enough.
  48. 48. What to test Activity is not progress Duration of Test Market Products that pass the prototype development must be exposed to a portion of the actual customers within a realistic market environment.
  49. 49. Shows the process where both the customers and the suppliers change their behaviour while interacting in the market. Product life Cycle is primarily determined by the rate of new product development in a particular market.
  50. 50. BRANDING It’s almost alive, like a person ,it brings benefits to consumers. It assumers personality. You must have character to it! --John Pepper
  51. 51. <ul><li>Identification </li></ul><ul><li>Protection </li></ul><ul><li>Positioning </li></ul>
  52. 52. Criteria for Choosing A Brandname <ul><li>Distinctive is the brand closely associated with product? </li></ul><ul><li>Word Association- does it have a pleasant meaning? </li></ul><ul><li>Legal Requirement- can it be registered? </li></ul><ul><li>Memorability- can your name be remembered easily </li></ul><ul><li>Pronounciability- Can pronounce easily </li></ul><ul><li>Limitations- is the brand name too limiting to be used for Expansion? </li></ul>
  53. 53. PRODUCT New New Existing Brand Existing Multi brand New Innovation Line Extension Franchise Extension
  54. 54. No- Meaning Brand Names <ul><li>Unless the marketer has no financial consisting, or is introducing an absolutely new product, which he aims to associate with the generic brand of his brand, he should not consider no meaning names. </li></ul>
  55. 55. <ul><li>A brand concept is also not the name as positioning, positioning is implemented to build up and support the brand concept, while brand concept like a strategic, long term management plan, it enables the brand to change its positioning, including adopting a short –term reposition strategy, to respond to changing market situations. </li></ul>
  56. 56. Brand Equity <ul><li>The brand equity concept is like the owner’s equity concept, while owner’s equity refers to the net worth for a company (assets less liabilities) </li></ul>
  57. 57. Packaging <ul><li>“ Gusto ko yan, maganda ang design” </li></ul><ul><li>by: Charles Gosingtian, </li></ul><ul><li>Grade 3, 9years old </li></ul>
  58. 58. <ul><li>A “partner” of every product is his package and his brand. Packages of product are like dresses for women, some dresses make them look thin, while others make them look fat. </li></ul>
  59. 61. Criteria for Choosing Packaging Materials <ul><li>Protection </li></ul><ul><li>Display Value </li></ul><ul><li>Cost </li></ul><ul><li>Convience </li></ul><ul><li>Size </li></ul>
  60. 62. Performance Requirement for Unit Packs <ul><li>In the factory </li></ul><ul><li>In transit </li></ul><ul><li>In the store </li></ul><ul><li>In the home </li></ul>
  61. 63. Label Development Process <ul><li>Before labels are finally recommended for approval, rough designs are submitted first. This is ensure more and better choices before final designs are given. Design that are accept by an approving summer panel validation. </li></ul>
  62. 64. PROOFS <ul><li>Or actual printed samples of the labels are then submitted to printing supplies after final artwork are accepted. Several proofs may be done depending on how a printer conforms to the color standard of the company. </li></ul>
  63. 65. Label Development Process <ul><li>Initial Design </li></ul><ul><li>Consumer test </li></ul><ul><li>Final Design </li></ul><ul><li>Proofing </li></ul><ul><li>Delivery And Quality Check </li></ul>
  64. 66. Managing Product Line <ul><li>Boston Consulting Group matrix is linked to the product life cycle concept so its important to track their movement over time. </li></ul>
  65. 67. <ul><li>BCG PLG </li></ul><ul><li>Question Mark Introduction Stage </li></ul><ul><li>Star Growth Stage </li></ul><ul><li>Cash Cow Maturity Stage </li></ul><ul><li>Dog Declining Stage </li></ul>
  66. 68. Relative Market Share Higher Lower Relative Market Growth higher lower Star Growth Question Mark introduction Cash Maturity Dog Declining Stage
  67. 69. General Electrical Matrix <ul><li>is an alternative technique used in brand marketing and Product management to help a company decide what product(s) to add to its product portfolio, and which market opportunities are worthy of continued investment. Also known as the 'Directional Policy Matrix,' the GE multi-factor model was first developed by Mckinsey for General Electric in the 1970s. </li></ul>
  68. 70. <ul><li>Relative Market Share </li></ul>General Electric Matrix Strong Average weak higher Average Weak Invest / Growth Invest / Growth Invest / Selectively Invest / Grow Invest / Selectively Harvest / Divest Invest / Selectively Harvest / divest Harvest / divest
  69. 71. GREEN MARKETING <ul><li>Promotional activities aimed at taking advantage of the changing consumer attitudes toward a brand. These changes are increasingly being influenced by a firm's policies and practices that affect the quality of the environment, and reflect the level of its concern for the community. </li></ul>Source:
  70. 72. GREEN PRODUCTS <ul><li>Green products can be loosely referred to as ” having relatively less impact on earth and the consumer. Companies must redesign old product and packages that are more environment friendly and advanatge to the consumers. </li></ul>
  71. 73. Environmental Threats <ul><li>Some of the more popular “green Threats” and their impact to the environment are as follows: </li></ul><ul><li>1.Global Warning and Ozone Depletion </li></ul><ul><li>2.Acid Rain </li></ul><ul><li>3.Air Pollution </li></ul><ul><li>4.Over- Packaging </li></ul>
  72. 74. Global Warning and Ozone Depletion <ul><li>1822 a mathematician French jean fourier compared earth’s atmosphere to that of a greenhouse which is building glass where one can glow flowers and plants that need a lot of warmth . </li></ul>
  73. 75. Acid Rain <ul><li>When power plants burn coal to make electricity and when cars burn gasoline –invisible gases like carbon dioxide released into the air. </li></ul><ul><li>Water Pollution </li></ul><ul><li>An increasing source of water pollution is non-point-source pollution. </li></ul><ul><li>Such as pesticides and fertilizers used in farms or even our gardens. </li></ul>
  74. 76. Air Pollution <ul><li>introduction of chemicals, particulate matter, or biological materials that cause harm or discomfort to humans or other living organisms, or cause damage to the natural environment or built environment, into the atmosphere. </li></ul>
  75. 77. Over Packaging <ul><li>Over packaging is a problem which seems to be on the increase at a time when it really should be on the decrease. The time has come to put a stop to this completely unnecessary waste of resources. Manufacturers and retailer's main incentive for over packaging their  goods is branding and marketing. Most modern consumers have grown used to this over packaging and in the case of supermarket fruit and veggies actually prefer to buy the more heavily packaged items as they are perceived to be &quot;cleaner&quot; than the unpackaged ones. </li></ul>
  76. 78. <ul><li>THANK YOU FOR LISTENING! </li></ul>