2. Objectives
• Explain the concept of a product
• Discuss how products are classified
• Describe the product life cycle and its impact on marketing strategies
• Explain the major components of branding, including brand types, branding
strategies, and brand protection
3. What is a product?
• A product is a good, a service, or an idea received in an exchange.
4. Goods, Services, & Ideas
• A good is a tangible physical entity such as an Apple iPad, or a Starbucks
Latte
• A service, in contrast, is intangible; it is the result of the application of
human and mechanical efforts to people or objects. Examples – performance
of Beyonce, car insurance, medical examination, day care
• An idea is a concept, philosophy, image, or issue. Examples – artistic works,
intellectual property, business methods, processes.
5. The Total Product
• The total product has three
interdependent elements: core
product, supplemental features,
symbolic or experiential
benefits.
• The core product consists of a
product’s fundamental utility or
main benefit and usually addresses
the fundamental need of the
consumer.
Total ProductCore
Product
Supplemental
Features
Symbolic and
experiential
benefits
6. The Total Product
• Supplemental features provide
added value or attributes that are
in addition to the core product’s
utility or benefit.
• Finally, customers also receive
benefits based on experiences
with the product, which gives
symbolic meaning to many
products (and brands) for buyers.
Total ProductCore
Product
Supplemental
Features
Symbolic and
experiential
benefits
7. Classifying Products
• Products fall into two general
categories:
• Consumer products – those purchased
to satisfy personal and family needs
• Business products – those bought to
use in a firm’s operations, to resell, or
make other products
8. Consumer Products
• Convenience Products
• These are relatively inexpensive, frequently purchased items for which buyers exert only
minimal purchasing effort.
• Ex. Bread, soft drink, chewing gum, gasoline, and newspapers
• Shopping Products
• Are items for which buyers are willing to expend considerable effort in planning and
making the purchase
• Ex. Appliances, bicycle, furniture, stereos, cameras, shoes
9. Consumer Products
• Specialty Products
• Possess one or more unique characteristics, and
generally buyers are willing to expend considerable
effort to obtain them.
• On average, this is the most expensive category of
products. Buyers conduct research, plan the
purchase of a specialty product, know exactly what
they want, and will not accept a substitute.
• Ex. Fine jewelry and limited-edition collector’s item
10. Consumer Products
• Unsought Products
• Are those purchased when a sudden problem
must be solved, products of which customers
are unaware until they see them in a store or
online, and products that people do not plan
on purchasing
• Ex. Emergency medical services and
automobile repairs are examples of products
needed quickly to solve a problem
11. Business Products
• Installations
• Include facilities, such as office buildings, factories, and warehouses and major nonportable
equipment such as heavy machinery.
• Since they tend to be costly, and involve long-term investment of capital, these purchase
decisions are often made by high-level management.
• Accessory Equipment
• Does not have to be part of the final physical product but is used in production and office
activities. They tend to be less costly and are purchased routinely with less negotiation
• Ex. Filing cabinets, calculators
12. Business Products
• Raw Materials
• Are the basic natural materials that actually become part of a physical product
• They include minerals, chemicals, agricultural products, and materials from forests and
oceans
• Component Parts
• Become part of the physical product and are neither finished items ready for assembly
or products that need little processing before assembly
• Ex. Spark plugs, tires, clocks, brakes, headlights – parts of an automobile
13. Business Products
• Process Materials
• Are used directly in the production of other products. Unlike component parts, however,
process materials are not readily identifiable.
• Ex. A salad dressing includes vinegar as an ingredient in its dressing. The vinegar is a process
material because it is not identifiable or extractable from other ingredients in the salad dressing
• MRO Supplies
• Are maintenance, repair, operating items that facilitate production and operations but do not
become part of the finished product
• Ex. Paper, pencils, cleaning supplies, and paints
14. Business Products
• Business Services
• Intangible products that many organizations use in their operations
• Ex. Financial, legal, marketing research, information technology, and janitorial services
15. Product Line and Product Mix
• A product item is a specific version of a product line that can be designed
as a distinct offering among an organization’s products
• A product line is a group of closely related product items that are
considered to be a unit because of marketing technical, or end-use
considerations.
• A product mix is the composite, or total, group of products that an
organization makes available to customers.
16. Product Mix Width and Depth
• The width of a product mix is measured by the number of product lines a
company offers.
• The depth of product mix is the average number of different product
items offered in each product line.
18. Product Life Cycle
• Product life cycle follows a similar trajectory to
biological life cycles, progressing from birth to
death.
• The product life cycle has four major stages:
introduction, growth, maturity, and decline.
• As a product moves through each cycle, the
strategies relating to competition, pricing,
distribution, promotion, and market
information must be evaluated and possibly
adjusted.
20. Introduction Stage
• Begins with the product’s first appearance in the marketplace
• Sales start at zero, and profits are negative because companies must invest in
product development and launch before selling. Profits may remain low or
below zero because initial revenues will be low while the company covers
large expenses from promotion and distribution.
21. Growth Stage
• Sales grow rapidly and profits reach a peak and then start to decline
• The growth stage is critical to a product’s survival because competitive
reactions to the product’s success during this period will affect the product’s
life expectancy.
• Promotion expenditures in the growth stage may be slightly lower during the
introductory stage, but are still large. As sales continue to increase,
promotion costs should drop as a percentage of total sales, which
contributes significantly to increased profits.
22. Maturity Stage
• Sales curves peak and start to level off or decline, and profits continue to
fall.
• During the maturity phase, producers who remain in the market are likely to
change their promotional and distribution efforts.
• Maintaining market share during the maturity stage requires promotion
expenditures, which can be large is a firm seeks to increase a product’s
market share through new uses.
23. Decline Stage
• Sales fall rapidly.
• When this happens, the marketer must consider eliminating items from the
product line that no longer earn a profit.
• The marketer also may cut promotion efforts, eliminate marginal distributors,
and finally, plan to phase out the product.
• In the decline stage, marketers must decide whether to reposition the
product to extend its life, or whether it is better to eliminate it.
25. Product Adoption Process
• Acceptance of new products – especially new-to-the-world products – usually does not
happen quickly. It can take a very long time for consumers to become aware of and
overcome skepticism about a new product, particularly if it represents a dramatic
innovation.
• Awareness – the product becomes aware of the product
• Interest – the buyer seeks information and is receptive to learning about the product
• Evaluation – the buyer considers the product’s benefits and decides whether to try it, considering its
value versus the competition
• Trial – the buyer examines tests, or tries the product to determine if it meets his or her needs
• Adoption – the buyer purchases the product and can be expected to use it again whenever the need for
this product arises
26. Product Adoption Process
• Depending on the length of time it takes them to adopt a new product, consumers tend to
fall into one of five major adopter categories:
• Innovators – the first to adopt a new product because they enjoy trying new products and do not mind
taking a risk
• Early adopters – choose new products carefully and are viewed as people who are in-the-know by
those in the remaining adopter categories
• Early majority – adopt just prior to the average person. They are deliberate and cautious in trying new
products
• Late majority – are skeptical of new products but eventually adopt them because of economic
necessity or social pressure
• Laggards – the last to adopt a new product, are oriented towards the past. They are suspicious of new
products, and when they finally adopt one, it may already have been replaced by an even newer product.
27. Branding
• A brand is a name, term, design, symbol, or any other feature that identifies
one marketer’s products as distinct from those of other marketers.
• A brand may identify a single item, a family of items, or all items of that
seller.
• A brand name is the part of a brand that can be spoken – including letters,
words, and numbers (such as 7UP or V8)
28. Branding
• The element of a brand that is not comprised of word – often a symbol or design –
is a brand mark
• Ex. McDonald’s Golden Arches, Nike’s “swoosh”, and Apple’s silhouette of an apple with a
bite missing
• A trademark is a legal designation indicating that the owner has exclusive use of a
brand or part of a brand and that others are prohibited by law from its use.
• A trade name is the full and legal name of an organization, such as Ford Motor
Company, rather than the name of a specific product.
29. Value of branding
• Both buyers and sellers benefit from branding.
• Brands help buyers recognize specific products,
that meet their criteria for quality, which reduces
time needed for purchasing. Purchasing certain
brands is a form of self-expression. Customers also
receive a psychological reward from purchasing and
owning a brand that symbolizes high status.
• Sellers also benefit from branding because brands
are identifiers that make repeat purchasing easier.
30. Brand Equity & Brand Loyalty
• Brand equity is the marketing and
financial value associated with a brand’s
strength in a market.
• Four major elements underlie brand equity:
brand name awareness, brand loyalty,
perceived brand quality, and brand
associations
• Brand loyalty is a costumer’s favorable
attitude toward a specific brand.
31. Protecting a Brand
• A marketer also should design a brand so that it can
be protected easily through registration.
• To guard its exclusive rights to a brand, a company
must ensure that the brand is not likely to be
considered an infringement on any brand already
registered.
• Marketers should also try to protect their brands
from brand counterfeiting.
