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Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
Session 21 MG 220 MBA - 25 Oct 10
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Session 21 MG 220 MBA - 25 Oct 10

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Session 21 …

Session 21
MG 220 Marketing Management
MBA 10

Published in: Business
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  • 1. MG 220 Marketing Management MBA 10 Fall 2010 Muhammad Talha Salam, Asst. Professor talha.salam@nu.edu.pk Access it online: www.slideshare.net/talhasalam Part 5: Shaping the Marketing Offerings > Product Characteristics > Differentiation > Product & Brand Relationships > Case Study Class Discussion: LEGO Class Presentation | Session 21 | 25 Oct 2010
  • 2. Access it online: www.slideshare.net/talhasalam Product Characteristics & Classifications Product Levels: The Customer value Heirarchy What is a Product? • Anything that can be offered to a market to satisfy a want or a need Product Levels (Example: A motorcycle) • Levels which a marketers needs to address • Core Benefit (Fundamental) Transportation • Basic Product Standard structure and features • Expected Product (buyer’s expectations at buying) Efficient, certain guaranteed life • Augmented Product (Exceeds customer expect.) High performance, After sales • Potential Product (All augment. even considering future) More speed, power, safety, easy maintenance etc. MG 220 Marketing Management 2
  • 3. Access it online: www.slideshare.net/talhasalam Product Characteristics & Classifications Product Levels: The Customer value Hierarchy Competing at different levels • In developed countries, branding & positioning is done at Augmented Level. • In developing countries, it takes place at Expected product level. Important points related to Product Augmentation Strategies • Each Augmentation adds costs • Augmented benefits soon become expected benefits (necessary POPs) • As companies raise the price of their augmented products, some companies go for simple, stripped-down versions at very low costs MG 220 Marketing Management 3
  • 4. Access it online: www.slideshare.net/talhasalam Product Characteristics & Classifications Product Classifications Three Key areas of Classifying products • Durability & Tangibility Use: • Consumer-Goods Classification OR • Industrial-Goods Classification Durability & Tangibility • Non-durable Goods • Durable Goods • Services MG 220 Marketing Management 4
  • 5. Access it online: www.slideshare.net/talhasalam Product Characteristics & Classifications Product Classifications Consumer-Goods Classification • Convenience Goods – Bought freq. with min effort and consumed quickly Types: – Staples (regular basis. Bread, eggs) – Impulse goods (without any planning. Chocolates, ice cream) – Emergency goods (for a special need, umbrellas for rain) • Shopping Goods – Consumers compare during process of selection and purchase Types: – Homogenous shopping goods (similar in quality but difference in price. E.g. refrigerator with same features) – Heter0genous shopping goods (different product features and services. E.g. cars of different models) • Specialty goods – Unique characteristics, Considerable effort in selection e.g. a house – Generally comparisons not made if decision is made for product • Unsought goods – Doesn’t normally think of buying e.g. insurance – Personal selling is required MG 220 Marketing Management 5
  • 6. Access it online: www.slideshare.net/talhasalam Product Characteristics & Classifications Product Classifications Industrial-Goods Classifications • Materials & Parts – Raw Materials • Farm Products • Natural Products – Manufactured Materials & Products • Component Materials • Component parts • Capital items – Installations • Buildings • Heavy Equipment – Equipment • Portable factory equipment & tools • Office equipment • Supplies & Business Services – Supplies • Maintenance & Repair Items • Operating supplies – Business Services • Maintenance & Repair services • Business Advisory Services MG 220 Marketing Management 6
  • 7. Access it online: www.slideshare.net/talhasalam Differentiation Product Differentiation | Design Concept of Differentiation • To be branded, products must be differentiated Product Differentiation • Form • Features • Performance Quality • Conformance Quality • Durability • Reliability • Repairability • Style Design: The integrative force • Totality of features that affect how a product looks and functions in terms of customer requirements • Some products, brands focus it too much and consider it to be a winning factor • Ferrari & 3M’s projectors! MG 220 Marketing Management 7
  • 8. Access it online: www.slideshare.net/talhasalam Differentiation Services Differentiation Services Differentiation • Ordering Ease • Delivery • Installation • Customer Training (how to handle vendor’s equipment) • Customer Consulting (helping customers with information & advisory) • Maintenance & Repair (service program to help product function optimally) MG 220 Marketing Management 8
  • 9. Access it online: www.slideshare.net/talhasalam Product & Brand Relationships The Product Hierarchy The Product Hierarchy • Need family • Product family • Product class • Product line • Product type • Items (Stock Keeping Unit – SKU or product variant) MG 220 Marketing Management 9
  • 10. Access it online: www.slideshare.net/talhasalam Product & Brand Relationships Product Systems and Mixes Product System • A group of diverse but related items that function in an compatible manner Product Mix • Also called product assortment. Set of all products and items a particular seller offers for sale. Product mix consists of various product lines • A company’s product mix has certain width, length, depth and consistency • Width: Number of product lines a company has • Length: Number of items in mix (overall). Average length: Total prods/no. of lines • Depth: Number of variants for each product in a line Average depth: average of number of variants for all items • Consistency: How closely related various product lines are in end use, production requirements, distribution channels, or some other way. • Discuss examples of different FMCGs MG 220 Marketing Management 10
  • 11. Access it online: www.slideshare.net/talhasalam Product & Brand Relationships Product Line Analysis Deciding on what lines to keep and which to divest • Key variables: – Sales & Profits – Market Profile Sales & Profits • Every company’s portfolio contains different products of different margins • Classifying products based on margins yielded by different products: – Core Products: High volume | High promotion | low margins – Staples: Low volume | No promotion | Somewhat higher margins – Specialties: Low volumes | High promotion | Higher margins – Convenience items: High volume | Less promotion | Higher margins Market Profile • Creating a product map for lines • Identifying new areas for operating • Identifying different market segments • Example in Graph MG 220 Marketing Management 11
  • 12. Access it online: www.slideshare.net/talhasalam Product & Brand Relationships Product Line Analysis Deciding on what lines to keep and which to divest • Key variables: – Sales & Profits – Market Profile Sales & Profits • See the graph for comparison/analysis Market Profile • Example in Graph: Paper company X • Compared against competitors: A, B, C & D MG 220 Marketing Management 12
  • 13. Access it online: www.slideshare.net/talhasalam Product & Brand Relationships Product-Line Length Company’s overall objectives influence product-line length Generally product-line length increases Line Stretching • Company lengthens line beyond current range. Options are: • Down-market stretch • Up-market stretch • Two-way stretch Line Filling Line Modernization, Featuring & Running MG 220 Marketing Management 13
  • 14. Access it online: www.slideshare.net/talhasalam Product & Brand Relationships Product-Mix Pricing Pricing strategies related to Product Mix and Product Line Product-Line Pricing (Establishing pricing levels for a product line) Optional-Feature Pricing (pricing for features separately) Captive-Product Pricing (pricing for ancillaries like razors for Gillette) Two-Part Pricing (Fixed fee plus variable usage fee) By-Product Pricing (Pricing by-products produced during production process) Product-Bundling Pricing (offering a bundled package price) MG 220 Marketing Management 14
  • 15. Access it online: www.slideshare.net/talhasalam Product & Brand Relationships Co-branding & Ingredient Branding Co-Branding • Dual-branding or brand bundling • Two well-known brands combined Ingredient Branding • Special case of co-branding MG 220 Marketing Management 15
  • 16. MG 220 Marketing Management MBA 10 Fall 2010 Muhammad Talha Salam, Asst. Professor talha.salam@nu.edu.pk Access it online: www.slideshare.net/talhasalam Part 5: Shaping the Marketing Offerings > Packaging, Labeling, Warranties & Guarantees > Chap 13: Designing & Managing Services (SKIM) > Quiz 6: Chap 9, 13/ed. Or Chap 11, 12/ed. Class Presentation | Session 22 | 28 Oct 2010

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