CH. 12 - SETTING PRODUCT STRATEGY

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  • Size, shape, physical structure of product Supplement basic function Individualize market offerings Low, average, high, or superior
  • Ex. Baxter placed computer terminals in hospitals Ex. Levi’s uses Quick Response Systems (QRS) Buyers of heavy equipment
  • Ex. GE also trains users of X-ray equipments Ex. Customer service
  • CH. 12 - SETTING PRODUCT STRATEGY

    1. 1. SETTING PRODUCT STRATEGY CHAPTER 12 MARKETING MANAGEMENT 13 TH EDITION by Philip Kotler & Kevin Keller v49 MARKETING MANAGEMENT MBA in Health, Batch 8 Ateneo Graduate School of Business Anna Sofia Victoria S. Fajardo, M.D. May 15, 2010 http://riafajardo.blogspot.com
    2. 2. OVERVIEW <ul><li>PRODUCT CHARACTERISTICS & CLASSIFICATIONS </li></ul><ul><li>DIFFERENTIATION </li></ul><ul><li>PRODUCT & BRAND RELATIONSHIPS </li></ul><ul><li>PACKAGING, LABELING, WARRANTIES & GUARANTEES </li></ul>
    3. 3. PRODUCT <ul><li>ANYTHING OFFERED TO MARKET </li></ul><ul><li>TO SATISFY A WANT OR NEED </li></ul><ul><ul><li>Goods, services, experiences, events, persons, places, organizations, ideas </li></ul></ul><ul><li>MOST IMPORTANT ELEMENT OF MARKETING MIX </li></ul>
    4. 4. PRODUCT CHARACTERISTICS
    5. 5. MARKET OFFERING PRICE PRODUCT SERVICES
    6. 6. 5 PRODUCT LEVELS CORE BENEFIT BASIC PRODUCT EXPECTED PRODUCT AUGMENTED PRODUCT POTENTIAL PRODUCT
    7. 7. 5 PRODUCT LEVELS NEW WAYS TO SATISFY CUSTOMERS POTENTIAL PRODUCT VEGGIES PREPARED WITH DIPS, FRUITS IN BASKETS AUGMENTED PRODUCT FRESH FRUITS & VEGGIES, JUICES, CANNED GOODS EXPECTED PRODUCT FRUITS & VEGETABLES BASIC PRODUCT HEALTHY FOOD CORE BENEFIT
    8. 8. PRODUCT CLASSIFICATION <ul><li>DURABILITY & TANGIBILITY </li></ul><ul><li>NON-DURABLE GOODS </li></ul><ul><ul><li>Tangible, few uses </li></ul></ul><ul><ul><li>Induce trial & build preference </li></ul></ul><ul><ul><li>Ex. Beer, soap </li></ul></ul>
    9. 9. PRODUCT CLASSIFICATION <ul><li>DURABLE GOODS </li></ul><ul><ul><li>Tangible, many uses </li></ul></ul><ul><ul><li>Personal selling & service </li></ul></ul><ul><ul><li>Ex. Refrigerators, clothing </li></ul></ul>
    10. 10. PRODUCT CLASSIFICATION <ul><li>SERVICES </li></ul><ul><ul><li>Intangible, inseparable, variable </li></ul></ul><ul><ul><li>Quality control, supplier credibility </li></ul></ul><ul><ul><li>Ex. Legal advice, health services </li></ul></ul>
    11. 11. PRODUCT DIFFERENTIATION
    12. 12. PRODUCT DIFFERENTIATION <ul><li>FORM </li></ul><ul><li>FEATURES </li></ul><ul><li>CUSTOMIZATION </li></ul><ul><li>PERFORMANCE QUALITY </li></ul>
    13. 13. PRODUCT DIFFERENTIATION <ul><li>CONFORMANCE QUALITY </li></ul><ul><ul><li>All products identical & meet specifications </li></ul></ul><ul><li>DURABILITY </li></ul><ul><ul><li>Product’s expected operating life </li></ul></ul><ul><li>RELIABILITY </li></ul><ul><ul><li>Product will not malfunction or fail within specified time period </li></ul></ul>
    14. 14. PRODUCT DIFFERENTIATION <ul><li>REPAIRABILITY </li></ul><ul><ul><li>Ease of fixing a product </li></ul></ul><ul><ul><li>DIY </li></ul></ul><ul><li>STYLE </li></ul><ul><ul><li>Product’s look and feel to the buyer </li></ul></ul>
    15. 15. DESIGN <ul><li>WELL-DESIGNED PRODUCT </li></ul><ul><ul><li>Pleasant to look at </li></ul></ul><ul><ul><li>Easy to open </li></ul></ul><ul><ul><li>Install, repair & dispose of </li></ul></ul>
    16. 16. SERVICES DIFFERENTIATION <ul><li>ORDERING EASE </li></ul>INSTALLATION DELIVERY
    17. 17. SERVICES DIFFERENTIATION <ul><li>CUSTOMER </li></ul><ul><li>CONSULTING </li></ul>CUSTOMER TRAINING
    18. 18. SERVICES DIFFERENTIATION <ul><li>MAINTENANCE & REPAIR </li></ul><ul><ul><li>Ex. HP offers “e-support” </li></ul></ul><ul><li>RETURNS </li></ul><ul><ul><li>Unavoidable reality of doing business </li></ul></ul>
    19. 19. PRODUCT & BRAND RELATIONSHIPS
    20. 20. PRODUCT HIERARCHY PRUDENTIAL RENEWABLE TERM LIFE INSURANCE ITEM TERM LIFE INSURANCE PRODUCT TYPE LIFE INSURANCE PRODUCT LINE FINANCIAL INSTRUMENTS PRODUCT CLASS SAVINGS & INCOME PRODUCT FAMILY SECURITY NEED FAMILY
    21. 21. PRODUCT SYSTEMS & MIXES PROCTOR & GAMBLE Charmin (1928) Bounty (1965) Pampers (1961) Luvs (1976) Ivory (1879) Camay (1926) Zest (1952) Safeguard (1963) Oil of Olay (1993) Gleem (1952) Crest (1955) Ivory Snow (1930) Tide (1946) PRODUCT LINE LENGTH PAPER PRODUCTS DISPOSABLE DIAPERS BAR SOAP TOOTHPASTE DETERGENTS PRODUCT- MIX WIDTH
    22. 22. PACKAGING, LABELING, WARRANTIES & GUARANTEES
    23. 23. PACKAGING <ul><li>All activities of designing and producing the container for a product. </li></ul><ul><li>3 LEVELS OF MATERIALS </li></ul><ul><li>Primary Package </li></ul><ul><li>Secondary Package </li></ul><ul><li>Shipping Package </li></ul>
    24. 24. OBJECTIVES OF PACKAGING <ul><li>IDENTIFY THE BRAND </li></ul><ul><li>CONVEY DESCRIPTIVE & PERSUASIVE INFORMATION </li></ul><ul><li>FACILITATE PRODUCT TRANSPORTATION & PROTECTION </li></ul><ul><li>ASSIST AT-HOME STORAGE </li></ul><ul><li>AID PRODUCT CONSUMPTION </li></ul>
    25. 25. MARKETING TOOL <ul><li>SELF-SERVICE </li></ul><ul><ul><li>Ex. Shopper in supermarket </li></ul></ul><ul><li>CONSUMER AFFLUENCE </li></ul><ul><ul><li>Ex. Customer willing to pay more for better packaging </li></ul></ul>
    26. 26. MARKETING TOOL <ul><li>COMPANY & BRAND IMAGE </li></ul><ul><ul><li>Ex. Garnier Fructis - bright green hair care packaging </li></ul></ul><ul><li>INNOVATION OPPORTUNITY </li></ul><ul><ul><li>Ex. Heinz EZ Squirt ketchup & upside-down bottle </li></ul></ul>
    27. 27. LABELING <ul><li>IDENTIFIES PRODUCT </li></ul><ul><li>DESCRIBE PRODUCT </li></ul><ul><li>PROMOTE PRODUCT </li></ul>
    28. 28. WARRANTIES & GUARANTEES <ul><li>All sellers are legally responsible for buyer’s normal or reasonable expectations. </li></ul><ul><li>WARRANTIES </li></ul><ul><ul><li>Formal statements of expected product performance by manufacturer. </li></ul></ul><ul><ul><li>Products can be returned to manufacturer for repair, replacement, or refund. </li></ul></ul>
    29. 29. WARRANTIES & GUARANTEES <ul><li>EXTENDED WARRANTIES </li></ul><ul><ul><li>Best Buy & Circuit City </li></ul></ul><ul><li>GENERAL & SPECIFIC GUARANTEES </li></ul><ul><ul><li>P&G - product returned if customer satisfaction not met </li></ul></ul><ul><ul><li>CROSS - pens & pencils guaranteed for life </li></ul></ul>
    30. 30. SUMMARY <ul><li>PRODUCT CHARACTERISTICS </li></ul><ul><li>5 PRODUCT LEVELS </li></ul><ul><li>DURABILITY & TANGIBILITY </li></ul><ul><li>PRODUCT DIFFERENTIATION </li></ul><ul><li>SERVICE DIFFERENTIATION </li></ul>
    31. 31. SUMMARY <ul><li>PRODUCT HIERARCHY </li></ul><ul><li>PRODUCT SYSTEMS & MIXES </li></ul><ul><li>PACKAGING </li></ul><ul><li>PACKAGING AS MARKETING TOOL </li></ul><ul><li>WARRANTIES & GUARANTEES </li></ul>
    32. 33. SETTING PRODUCT STRATEGY CHAPTER 12 MARKETING MANAGEMENT 13 TH EDITION by Philip Kotler & Kevin Keller v49 MARKETING MANAGEMENT MBA in Health, Batch 8 Ateneo Graduate School of Business Anna Sofia Victoria S. Fajardo, M.D. May 15, 2010 http://riafajardo.blogspot.com

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