Bus169 Kotler Chapter 08

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  • Refers to objectives 1 & 2
  • Answer B. Comprises the total product as perceived by the consumer. The core is the basis of the product, augmented product supplements the core and tangible-intangible describe the components on the good-service continuum. Refers to objectives 1 & 2
  • Refers to objectives 1 & 2
  • Refers to objectives 1 & 2
  • Refers to objectives 4 & 5
  • Refers to objectives 4 & 5
  • Refers to objective 4
  • Refers to objective 4
  • Refers to objectives 5 & 6
  • Refers to objective 5
  • Refers to objective 5
  • Refers to objectives 5 & 6
  • Refers to objectives 5 & 6
  • Refers to objective 7
  • Refers to objective 7
  • Refers to objective 7
  • Refers to objective 8
  • Refers to objective 8
  • Answer B These are the most memorable components of brand. Refers to objective 8
  • Refers to objective 9
  • Refers to objective 8
  • Answer B. Two companies are combining products and brands. Refers to objective 8
  • Refers to objective 8
  • Refers to objectives 9 & 10
  • Refers to objectives 9 & 10
  • Refers to objectives 9 & 10
  • Bus169 Kotler Chapter 08

    1. 1. Products: Goods, Services and Experiences
    2. 2. Chapter Objectives (1) <ul><li>Describe the nature of product in marketing management. </li></ul><ul><li>Explain the concept of the goods–services continuum. </li></ul><ul><li>Define the term product, including the core, actual and augmented product. </li></ul><ul><li>Explain product classifications, and contrast the differing types of consumer products and business-to-business products. </li></ul><ul><li>Explain services classifications and discuss the marketing of services. </li></ul>
    3. 3. Chapter Objectives (2) <ul><li>Discuss an extended notion of product that includes marketing persons, experiencing events, places, political ideas, causes, non-profit services, and fundraising endeavours. </li></ul><ul><li>Outline the range of individual product decisions marketers make, discussing the product attributes of quality, features and design. </li></ul><ul><li>Discuss branding, and contrast the differences among line extensions, brand extensions, multibrands and new brands. </li></ul>
    4. 4. Chapter Objectives (3) <ul><li>Illustrate product line and product mix decisions, describing stretching and filling the product line length, line modernisation, line featuring and line width. </li></ul><ul><li>List some of the considerations marketers face in making international product decisions, including whether or not to standardise or adapt product and packaging. </li></ul>
    5. 5. What is a Product? <ul><li>A product is anything that can be offered to a market with the objective of satisfying a consumer need or want. </li></ul><ul><li>It can include physical goods; services; people; places; organisations and ideas . </li></ul><ul><li>It is everything, both favourable and unfavourable, that the consumer receives in an exchange with the seller </li></ul>
    6. 6. Can be viewed on 3 levels <ul><ul><li>The most basic level is the core product , which addresses the question: </li></ul></ul><ul><ul><li>- what is the buyer really buying? </li></ul></ul><ul><ul><li>The actual product may have as many as five elements: the quality level; the features; the styling; a brand name, and the packaging. </li></ul></ul><ul><ul><li>The augmented product - the additional consumer services and benefits that are built around the core and actual products </li></ul></ul>
    7. 7. Descriptions of a product's quality, features, style, brand name, and packaging identify the: <ul><li>core product </li></ul><ul><li>actual product </li></ul><ul><li>augmented product </li></ul><ul><li>tangible product </li></ul><ul><li>intangible product </li></ul>
    8. 8. The three Levels of Product
    9. 9. An example of each level
    10. 10. Product Classifications <ul><li>Consumer Products are those bought by final consumers for personal consumption. Four types: </li></ul><ul><li>Convenience Products </li></ul><ul><ul><li>Consumer goods and services that the customer usually buys frequently, immediately, and with the minimum of comparison and buying effort . </li></ul></ul><ul><li>Shopping Products </li></ul><ul><ul><li>Consumer goods and services that the customer, in the process of selection and purchase, compares on the basis of suitability; quality; price; and style . </li></ul></ul>
    11. 11. Cont’d <ul><li>Speciality Products </li></ul><ul><ul><li>Consumer goods and services with unique characteristics or brand identification, for which a significant group of buyers is willing to make a special purchase effort. </li></ul></ul><ul><li>Unsought Products </li></ul><ul><ul><li>Consumer goods and services that the consumer either doesn’t know about, or knows about but doesn’t normally think of buying. </li></ul></ul>
    12. 12. Table 8.2 Marketing Considerations for Consumer Products
    13. 13. Business-to-Business Products <ul><li>Business-to-business (B2B) products are bought by organisations or individuals for further processing; for use in running a business; or to on-sell to others. </li></ul><ul><li>The three groups of business products: </li></ul><ul><ul><li>Materials and parts - industrial goods that enter the manufacturer’s product completely, including raw materials and manufactured materials and parts. </li></ul></ul><ul><ul><li>Capital items - industrial goods and services that enter the finished product partly, including installations and accessory equipment. </li></ul></ul><ul><ul><li>Supplies and services - industrial goods and services that don’t enter the finished product at all. </li></ul></ul>
    14. 14. Figure 8.4 Classification of Business Products
    15. 15. Business / Industrial product <ul><li>The purpose is to: </li></ul><ul><li>Manufacture other products; </li></ul><ul><li>Assist in running a firm’s business; or </li></ul><ul><li>Simply on-sell to consumers and end-users </li></ul><ul><li>A product is categorised as a ‘Consumer’ product or as a ‘Business’ product, based on the purpose for which it is purchased - the intended use </li></ul>
    16. 16. Services products <ul><li>Services products deliver something that is intangible: the buyer receives value from the purchase, but it does not result in the consumer owning anything that endures. </li></ul><ul><li>Continuing significant growth in the number and value of Services products, particularly in the ‘developed’ nations. </li></ul>
    17. 17. Characteristics of Services <ul><li>The key characteristics that differentiate Services products from physical goods: </li></ul><ul><li>Intangibility </li></ul><ul><li>Inseparability/ High personal involvement </li></ul><ul><li>Variability </li></ul><ul><li>Synchronous delivery/ consumption </li></ul><ul><li>Perishability </li></ul>
    18. 18. Cont’d <ul><li>Intangibility </li></ul><ul><ul><li>Difficult to assess the suitability of the product in advance </li></ul></ul><ul><ul><li>Because of this, the physical elements become extra important </li></ul></ul><ul><li>Inseparability </li></ul><ul><ul><li>Purchase takes on extra significance </li></ul></ul><ul><ul><li>Buyer involvement contributes to the outcome </li></ul></ul>
    19. 19. Cont’d <ul><li>Variability </li></ul><ul><ul><li>Different level of quality in production </li></ul></ul><ul><ul><li>Standardisation, and use of technology can help to minimise the variation </li></ul></ul><ul><li>Synchronous </li></ul><ul><ul><li>Increased importance of ‘people’ </li></ul></ul><ul><ul><li>Product is often ‘sold’ before it is produced </li></ul></ul><ul><li>Perishability </li></ul><ul><ul><li>Product is not produced in advance </li></ul></ul><ul><ul><li>Need for firm to link supply with demand </li></ul></ul>
    20. 20. Service Quality Measures <ul><li>There is usually a much higher level of people involvement (both buyer and seller) with Services products than with goods. </li></ul><ul><li>Services purchases usually involve people in ‘service encounters’; Services are experiential in nature, and often require special measures, such as ‘mystery shoppers’, to assess the quality of the product. </li></ul>
    21. 21. Extending the Classification of Goods and Services <ul><li>Event marketing </li></ul><ul><ul><li>Combines the marketing of Services elements with the marketing of goods, particularly the experiential aspects of sporting, entertainment and other staged events. </li></ul></ul><ul><li>Person marketing </li></ul><ul><ul><li>People such as athletes/ sports stars need to be marketed as a ‘personality’ before being used for endorsements. </li></ul></ul><ul><ul><li>Politicians can be marketed in a similar manner. </li></ul></ul><ul><li>Political marketing </li></ul><ul><ul><li>Politicians market themselves, their political ideologies, and their political party in an attempt to gain voter support. </li></ul></ul>
    22. 22. Cont’d <ul><li>Cause marketing </li></ul><ul><ul><li>Marketing an idea or social cause such as nuclear-free living or catching public transport to and from work. </li></ul></ul><ul><ul><li>In cause-related marketing, a firm might position its brand on the basis that it will donate part of the value of its sales to a particular cause. </li></ul></ul><ul><li>Not-for-profit marketing </li></ul><ul><ul><li>Conducted by organisations who are not motivated by profit. The aim is to make a sufficient trading surplus to enable the operation to continue. </li></ul></ul><ul><li>Experiences marketing </li></ul><ul><ul><li>Promoting the added-value elements available through customer participation and connection with the product, and managing all related aspects of the relationship. </li></ul></ul>
    23. 23. The Firm’s Product Decisions
    24. 24. 1. Product Attributes <ul><li>Product Quality </li></ul><ul><ul><li>Is the ability of a product to perform its functions. </li></ul></ul><ul><ul><li>Includes the product’s durability; reliability; precision; ease of use; and repairability. </li></ul></ul><ul><ul><li>Quality should not be viewed as a problem to be solved; it is a competitive opportunity. </li></ul></ul>
    25. 25. Cont’d <ul><li>Product Features </li></ul><ul><ul><li>May include several models of a product (e.g. cars) offering varying features. Helps to differentiate from competitors. Must relate cost of features to value. </li></ul></ul><ul><li>Product Design </li></ul><ul><ul><li>Process of designing a product’s style and function. Creating a product that is attractive; easy, safe and inexpensive to use and service; simple and economical to produce and distribute. </li></ul></ul>
    26. 26. 2. Branding <ul><li>Branding is a major strategic decision that can add value to a product. </li></ul><ul><li>Viewed by consumers as an important part of the product. </li></ul><ul><li>Powerful brands will gain strong recognition and attract significant consumer loyalty, and can usually command a higher price </li></ul><ul><li>Brands with strong consumer loyalty are better protected against the strategies of competitors. This is high brand equity . </li></ul>
    27. 27. Cont’d <ul><li>The brand is the combination of functional and emotional benefits delivered by a product. </li></ul><ul><li>Consumers are looking for something they can associate with - a means of linking with a particular product that delivers ‘value’. </li></ul><ul><li>Consumers are attracted to a product that : </li></ul><ul><ul><li>Is dependable; has high quality; is consistent over a period of time; offers ‘value-for-money’; and can deliver a positive experience each time (satisfaction). </li></ul></ul>
    28. 28. Cont’d <ul><li>A brand can be: </li></ul><ul><li>A name; term; sign; symbol; or design (or a combination of these) intended to identify a firm’s product, and to help differentiate it from competing products </li></ul>
    29. 29. The most enduring meanings of a brand are its: <ul><li>attributes and benefits </li></ul><ul><li>values, benefits, attributes, and personality </li></ul><ul><li>personality, attributes, and benefits </li></ul><ul><li>values, culture, and personality </li></ul><ul><li>attributes, benefits, and values </li></ul>
    30. 30. To Brand or Not to Brand <ul><li>Branding can deliver significant benefit, so it is a major part of product marketing. </li></ul><ul><li>Some products are classified as ‘generic’. These are plainly packaged, and are less expensive versions of everyday products. </li></ul><ul><li>In Australia, the market share for generics tends to fluctuate, but major supermarkets are developing their own generic labels. </li></ul>
    31. 31. <ul><li>Manufacturers’ brand </li></ul><ul><ul><li>Created and owned by the producer of the product. </li></ul></ul><ul><li>Private brand </li></ul><ul><ul><li>Created and owned by a reseller of the product. </li></ul></ul><ul><li>Licensing </li></ul><ul><ul><li>Some companies are licensed to use brand names or symbols previously created by other manufacturers. </li></ul></ul><ul><li>Co-branding </li></ul><ul><ul><li>The practice of using the established brand names of two different companies to promote the same product. </li></ul></ul>Brand Sponsor Decision
    32. 32. Co-branded product
    33. 33. Arnott's biscuits with M&M candies in them would be an example of the use of a __________ strategy. <ul><li>line extension </li></ul><ul><li>co-branding </li></ul><ul><li>repositioning </li></ul><ul><li>brand extension </li></ul><ul><li>line filling </li></ul>
    34. 34. Brand repositioning <ul><li>It may be necessary for a firm to reposition its product, due to: </li></ul><ul><ul><li>a competitor launching a new brand that cuts into the firm’s market share. </li></ul></ul><ul><ul><li>a shift in consumer wants </li></ul></ul><ul><ul><li>Repositioning could be an easier, more beneficial option than introducing a completely new brand. </li></ul></ul><ul><ul><li>The firm might need to change both the product and the product image to better satisfy any new customer expectations. </li></ul></ul>
    35. 35. Packaging/ Labelling <ul><li>Packaging can: </li></ul><ul><ul><li>Promote the product </li></ul></ul><ul><ul><li>Protect the product </li></ul></ul><ul><ul><li>Enable easy storage </li></ul></ul><ul><ul><li>Encourage recycling </li></ul></ul><ul><li>Labelling will: </li></ul><ul><ul><li>Help consumes with selection </li></ul></ul><ul><ul><li>Provide information, e.g. how-to-use instructions </li></ul></ul><ul><ul><li>Highlight product features and benefits </li></ul></ul>
    36. 36. Product Line Decisions <ul><li>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. </li></ul><ul><li>Product line length </li></ul><ul><ul><li>Stretching downward </li></ul></ul><ul><ul><li>Stretching upward </li></ul></ul><ul><ul><li>Stretching both ways </li></ul></ul>
    37. 37. Figure 8.8 Product Line Stretching Decisions
    38. 38. Product Mix Decisions <ul><li>A product mix is the set of all product lines and items that a particular seller offers for sale. </li></ul><ul><li>The product mix can be described as having: breadth; length; depth; and consistency. </li></ul><ul><ul><li>Breadth is the number of different product lines. </li></ul></ul><ul><ul><li>Length is the total number of items the company offers. </li></ul></ul><ul><ul><li>Depth is the number of versions of each product in the line. </li></ul></ul><ul><ul><li>Consistency is how closely the various product lines are in terms of consumer usage; production requirements; and methods of distribution. </li></ul></ul>

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