What Is a Product?
ProductProduct is the
What is a product?
A product is a bundle of benefits that satisfies needs of
organizations or consumers.
Includes tangible goods, services, ideas, people, and
Products such as search engines are unique to the
internet while others simply use the internet as a new
Organizations use research to determine what is
important to customers when creating new products.
The marketing mix and CRM work together to produce
relational and transactional outcomes with consumers.
In 1998, co-founders Brin and Page delivered an innovative
new search strategy that ranked results on popularity as well
Today, Google performs 1 billion searches per day, speaks
345 languages and is the most-visited U.S. Web site.
Innovative products and strong customer focus are driving its
success and profitability.
Generates revenue from several B2B markets:
Licensing of its search services; Sales of advertising to Web
Google pays close attention to user value, keeps costs low,
and delivers eyeballs to advertisers.
Google’s product mix includes 24 search products, 3
advertising products, 20 applications.
The Google Story
Types of Products
Consumer Goods Classification:
Convenience Goods: Purchased Frequently
with min. effort.
Staples: Eg: Food items, soaps etc.
Impulse Goods: Eg: Chocolates, Magazines etc.
Emergency Goods: Eg: Some pharma products
Shopping Goods: Selection & Comparison
Process before purchase Eg: Apparel, Furniture
Specialty Goods: Unique Characteristics/Brand
Eg: Mercedes Benz, Bose Speakers
Unsought Goods: Consumer normally doesn’t
buy them till persisted Eg: Helmets, Reflectors
Industrial Goods Classification:
Materials & Parts:
Raw Material: Eg: Milk for Ice Cream etc.
Manufactured Material: Eg: Cement
Installations: Eg: Factories, power plants
Equipment: Eg: Tools, Lift trucks
Supplies & Business Service
Eg: Office Stationary, cleaning services
On Basis of Durability & Tangibility:
Non Durable Goods
Eg: FMCG products
Eg: TV, Mobiles
Eg: Aviation Industry
Define the terms
Product depth, and
Gillette’s Product Lines and Mix
Blades and Writing
razors Toiletries instruments Lighters
Mach 3 Series Paper Mate Cricket
Sensor Adorn Flair S.T. Dupont
Trac II Toni
Atra Right Guard
Double-Edge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus
Width of the product mix
Product Levels Example:
5. Introduce New Features
4. Long Battery Life
3. Robust & Durable
2. Mobile Phone
Need Family: To pass time while on move
Product Family: Entertainment
Product Class: Portable Entertainment
Product Line/Category: Portable DVD
players, CD players, MP3 players
Product Type/Form: Audio ipods
Item/SKU: Apple ipod nano 4GB
Width of Product Mix (Product Categories):
Eg: For HUL it is Detergents, Deodorants,
Soap, Shampoo, Tea, Ice Cream etc.
Length of Product Mix (Brands): Eg: For
HUL it is Surf, Rin, Lux, Axe, Sun Silk,
Brooke Bond, Lipton, Kwality-Walls etc.
Depth of Product Mix (SKUs): Variants of
Consistency of Product Mix: Close relation
among product categories
Product Line Strategies:
Line Stretching: Taking product line to new
Down Market Stretching/Trading Down: Eg:
Tata’s 1 lakh car
Up Market Stretching/Trading Up: Eg: Hyundai’s
Verna, Elantra, Sonata, Tuscon
Eg: Nokia Mobile Models
Line Filling: Adding More Variants/Filling
Line Modernization: Eg: Onida’s new
technologically advanced products
Line Featuring: Eg: Tata Indica & Indigo
Line Pruning: Eg: HUL concentrating on 30
power brands out of its 110 brands.
Product Line Strategies (Cont.):
Product Line Pricing Eg: Different price points for
HLL’s detergents, soaps
Optional Feature Pricing Eg: In case of variants of
Car Models, Laptops
Captive Product Pricing Eg: low priced HP printer
+ high priced cartages
Two-part Pricing: Set up cost + monthly fee
By-Product Pricing Eg: Petrol, LPG (domestic and
Product Bundling Pricing: Tour package
Pure bundling, and Mixed bundling
One or more of the brands
provides a distinctive ingredient
or component to the primary or
carrier brand. In this case, the
ingredient brand is subordinate to
the carrier brand.
Gateway Computer with Intel
chips (ingredient brand)
Clorox cleaner with Teflon.
In all cases the ingredient
brand’s identity structure is
subordinate to the carrier brand
in the co-branded identity
The combining and retaining of two or more brands to create a
single, unique product or service.
Two or more companies acting in cooperation to associate any
of various logos, color schemes, or brand identifiers to a
specific product that is contractually designated for this
An arrangement that associates a single product or service with
more than one brand name, or otherwise associates a product
with someone other than the principal producer.
It involves the transfer of a subset of attributes from the two
parent brands, and their recombination into a coherent
composite concept that could become a member of the
extension category to which new brand belongs.
Types of Co-branding
1. Promotional/Sponsorship Co-Branding
2. Value Chain Co-Branding
Product Service Co-Branding,
3. Innovation-Based Co-Branding. Ex:Apple-Nike
4. Shared Product Equity Co-Branding
Value Chain Co-Branding
Sea World and Southwest Airlines
Starbucks WiFi service from AT&T.
Private label products or services are typically those
manufactured or provided by one company for offer
under another company's brand. These are also
known as store / private brands, or private goods.
Internal co-branding means that company users
variety of their own products and services to
expand sub brands by using them in
conjunction with primary brand.
External co-branding means a synthesis of
products and services by different organizations
(2 or more) that together create final product or
Mixed co-branding is when any combination of
internal and external ventures and partnerships
is used to achieve the final product or service or
a complete package of services or products.
Often mixed co-branding is used as a method
for internationalizing brands by linking parent
brand to a more locally known smaller brands
or brands in parallel industries.
Example: Coca-Cola and Axe in Argentina
Co-brand only with companies that share
Co-brand only with products that hold best-in-
Co-brand only in situations where you can
retain full review and approval rights on all
elements of communications. That narrows the
company's co-branding possibilities, but it also
reduces its risk.
Advantages of Co-Branding
It lessens the costs of launching new products, since
different products can touch base with a wide range of
consumers on a broader scale.
Consumer loyalty is enhanced since the same affection
and admiration bestowed on the product that they
respect and patronize will extend to its co-branding ally.
Co-branding entails cost savings not only in terms of
advertising but in sharing overhead costs, like rental
expenses for leased spaces, utilities and manpower
Talents, expertise and creativity are shared by
recognizing the principle that the success of one brand
also brings success to its partners.
It encourages participation from consumers who benefit
from the convenience of having multiple selections and
different products that are available in one roof or outlet.
Disadvantages of Co-Branding
In the same way that the benefits of co-
branding spreads from one brand alliance to
another, so do the negative issues that may
arise from mishaps or malicious attacks against
a brand’s integrity and reputation.
Forging a misalliance with another brand who
cannot keep up with consumers’ demands,
since such inability will tend to drag down the
other brand’s reputation.
Packaging & Labeling
Why is it done?
To identify the brand
Convey descriptive and persuasive
Facilitate product transportation
Facilitate product protection
Assist at-home storage
Aid product consumption
Benefits of Product Lines
Efficient Sales and
Product Mix Width
Capitalizes on established
The number of product lines
an organization offers.
Product Line Depth
Attracts buyers with different
Increases sales/profits by further
Capitalizes on economies of scale
Evens out seasonal sales patterns
The number of product items
in a product line.
Creating Customer Value Online
Customer value = benefits – costs
Value means entire product experience
Product awareness to product disposition
Product decisions must be made that deliver
benefits to customers.
Attributes include overall quality and specific
Notion: “You get what you pay for”
Benefits are the same features from a user
The internet increases customer benefits in many
“Broadening” and “Deepening” of product features
User personalization of the shopping experience can be
Recommendations, wish list, follow-ups
Product Benefits: Attributes
Product Benefits: Branding
A name, term, symbol, design, or combination thereof
that identifies a seller’s products and differentiates
them from competitors’ products.
When a firm registers that information with the U.S.
Patent Office, it becomes a trademark.
History of Branding
What is Branding?
Brand Awareness, Brand Recall, Brand
A brand represents a promise or value
Brand equity is the intangible financial value of
A great brand taps into popular culture and
Rank Brand Value Industry
1 Microsoft 62039 Software
2 GE 55834 Technology
3 Coca-Cola 41406 F/D/T*
4 China Mobile 39168 Telecom
5 Marlboro 38510 F/D/T
6 Wal-Mart 37567 Retail
7 Google 37445 Software
8 IBM 36084 Technology
9 Citibank 31028 Bank
10 Toyota 30201 Cars
Brand Value Industry
1 Apple Inc. 153285
2 Google 111498
3 IBM 100849
4 McDonald's 81016 F/D/T*
5 Microsoft 78243
6 Coca-Cola 73752 F/D/T
7 AT&T 69916 Telecom
8 Marlboro 67522 F/D/T
10 GE 50318
Brand Value Industry
1 Google 114260
2 IBM 86383
3 Apple 83153
4 Microsoft 76344
5 Coca Cola 67983 F/D/T*
6 McDonald's 66005 F/D/T
7 Marlboro 57047 F/D/T
9 GE 45054
10 Vodafone 44404 Telecom
Levels of Brand Relationship
Tell others about the brand
Communicate with each other
Communicate with company
Display the brand proudly
Is on the list of
Firms can use existing brand names (i.e. online
extensions) or create new brands on the
Some firms may use different names offline and
online to avoid risk if the new product or
channel should fail.
Sports Illustrated created thriveonline.com.
Wired Magazine changed its online version name to
Branding Decisions for Web
Creating New Brands for Internet
Good brand names should:
Suggest something about the product.
Differentiate the product from competitors.
Be capable of legal protection.
On the internet, a good brand name should be short,
memorable, easy to spell, and translate well into other
Cobranding occurs when two companies form an
alliance and put their brand names on a product:
Sports Illustrated co-brands with CNN as CNNSI
Yahoo! Visa shopping pages
Product Benefits: Support
Customer support is a critical component in the
Customer service reps help customers with
installation, maintenance, product guarantees,
etc. to increase customer satisfaction.
Good companies combine online and offline
channels to increase their customer support.
Product Benefits: Labeling
Labeling has digital equivalents in the online
Online “labels” provide information about product
usage, features, and installing software.
Online “labels” also provide extensive legal
information about the software product.
Online firms may add the Better Business logo
or TRUSTe privacy shield to their sites.
Business and consumer collaboration are
possible on the Internet.
Software developers often seek customer input
about new products.
They often allow users to download new products,
test them, and provide feedback.
Customer interaction has been found to increase
Amazon seeks customers’ product reviews.
CNN encourges citizen generalists to upload
videos of breaking news.
Product Mix Strategies, cont.
1. Discontinuous innovations are new-to-the-
2. New-product lines are new products in a
different category for an existing brand
3. Additions to existing product lines.
4. Improvements or revisions of existing
5. Repositioned products can be targeted to
different markets or promoted for new uses.
6. Me-too lower-cost products.