Chapter 5 discusses product strategy, defining a product as anything offered to satisfy consumer needs, which includes core, actual, and augmented products. It outlines various product classifications (consumer and industrial products), marketing considerations, and attributes such as branding and packaging. The chapter also explores brand strategies like line extensions, brand extensions, and the importance of packaging and labeling in product marketing.

1. Chapter 5
Product Strategy
Prepared by:
Nor Izzuddin Bin Norrahman
Lecturer of Management, Banking & Islamic Finance
Astin College

2. • A product can be defined as – Anything that
can be offered to a market attention,
acquisition, use, or consumption that might
satisfy a want or need.
• It includes:
– Physical Objects
– Services
– Persons
– Places
– Organizations
– Ideas

3. LEVELS OF PRODUCT

4. Core Product
• The most basic level
• Address the question: what is the buyer really
buying?
• Problem-solving benefits
• The benefit that the consumers will receive
• Example?

5. Actual Product
• Build around the core products
• Basically have 5 Characteristics:
– Quality level
– Features
– Design
– Brand name
– Packaging

6. Augmented Product
• Built around both core and actual product
• By offering additional consumer services and
benefits
• Examples?

7. Example

8. PRODUCT CLASSIFICATION
• Products and services fall into two broad
classes based on the types of consumers that
use them:
– Consumer Products
– Industrial Products

9. Consumers Product
• Are those brought by final consumers for
personal consumption.
• Marketers usually classify these goods
– Convenience Goods
– Shopping Goods
– Specialty Goods
– Unsought Goods

10. Marketing Consideration for Consumer
Products

11. Convenience Products
• Consumer products and services that the
consumer usually buys:
• FREQUENTLY,
• Immediately,
• And with a minimum of comparison and
buying effort.
• Examples?

12. Shopping Products
• Less frequently purchased.
• Customer will COMPARE carefully on:
– Suitability
– Quality
– Price
– Style
• Much time and effort needed to:
– Gather info
– Compare

13. Specialty Products
• Consumer products & services that have
UNIQUE characteristics.
• Which significant group is WILLING to buy
• Example?

14. Unsought Products
• Either:
– Consumer does not know about the products
– Consumer does not think to buy the products
• Example?

15. INDIVIDUAL PRODUCTS DECISIONS
Product
attributes
Branding Packaging Labeling
Product
support
services

16. Product Attributes
• Developing a product or services involves
defining the BENEFITS that it will offer.
• These benefits measured by:
– Quality
– Features
– Design

17. Product Attributes
• Product Quality
– Two dimensions:
• Level
– In developing product, the marketer must choose quality level
– To support the product position in market
– Examples?
• Consistencies
– Conformance quality
– Freedom from defects and consistency in delivering a targeted
level of performance
– Examples?

18. Product Attributes
• Product Features
– A product can be offered by varying features.
– Should ask question:
• How do you like the product?
• Which specific features do you like the most?
• Which features that you want us to add in the
products?

19. Product Attributes
• Product Designs
– Design is a larger concept than style
– Style – simply describe appearance of a product,
but it doesn’t necessarily make the product
perform better.
– Good design contributes to a product’s
USEFULNESS as well as it’s looks.
– Good design can attract attention, improve
product performance, cut production costs and
give strong competitive advantage.

20. Branding
• A brand is a name, symbol, term, sign, or
design, or combination of these, that
identifies the maker or seller of a product or
services.
• It help consumers identify the products.
• It also tell the buyer something about the
product

21. Branding
• Brand Equity
– Brands vary in the amount of power and value
– A powerful brand has high brand equity.
– High brand equity provides competitive
advantages.
– It also will affected the consumer brand
awareness and loyalty.

22. Branding
• Brand Name Selection
– A good name can add greatly to a product’s
success.
– Desirable qualities for a brand name includes:
• Suggest benefits and qualities (examples?)
• Easy to pronounce, recognize and remember
(examples?)
• Distinctive (Examples?)
• Translate easily to foreign language
• Should be capable of registration and legal protection

23. Branding
• Brand Sponsor
– Four sponsorship options:
• Manufacturer’s brand
• Private brand
– Hard to establish / costly
– Yield high profit – cannot be bought at other competitors
• Licensing
– Use well-known celebrity
• Co-Branding
– Mix the company resources with another company to create a
product

24. Brand Strategies

25. Brand Strategies
• Line Extension
– When company introduces ADDITIONAL items in
a given product category under the same brand
name.
– Examples: Flavors, colors, ingredients
– It is a low cost & low risk method in introducing
the new products.
– Risk: overextended – might lose its specific
meaning (Coke vs Diet Coke, Coke Zero, Vanilla
Coke)

26. Brand Strategies
• Brand Extensions
– Involves the use of a successful brand name to
launch a NEW or MODIFIED PRODUCTS in a NEW
CATEGORY]
– Example: Honda (Motorcycles, Cars, etc.)
– Pro: Instant recognition & faster acceptance
– Cons: if the brand extension fails, it may harm the
consumer attitude towards the brand name.

27. Brand Strategies
• Multi-brands
– Company often introduce additional brands in the
same category
– Example: Watches (CASIO)
• G-Shock (Durability)
• Edifice (Low-Price)
• Others?
– Why they do that? Isn’t the buyer will become more
confuse on which watch that they want to buy?
– Pro: To protect the flanks of its CASIO brand in the
watches industry
– Cons: May not profitable when it only meet small
market share. (sources which they have separated is
wasted)

28. Brand Strategies
• New brands
– A company may create a new brand name when
it enter a new category.
– Or because a company might believe that the
power of its existing brand name is waning and
need a new one.
– Example: Nestle -> MILO, HONEY STAR, NESCAFE
– Pros?
– Cons?

29. Brand Strategies
• Mega-brands
– Weeding out weaker brands
– Focusing the resources only on brands that can
achieve number one or two in the market
– Share positions in their categories.
– Examples?
– Pros?
– Cons?

30. Packaging
• Packaging involve designing and producing the
container or wrapper for a product.
• The package may include:
– The Brands name
– The instruction manual
– Ingredients
– Others?
• Why we need it?

31. Labeling
• Labels may range from simple tags to complex
graphic attached with the package.
• It perform several function:
– Identifies brand or product
• Sunkist -> print on an orange picture
– Describe several thing about the product
• Who made it? Where are they from? Expired Date
– Promote the product
• NEW PRODUCT! NEW FORMULA!

32. The End….any question? 