POM Marketing 1302

1. Designing Products: Products,
Brands, Packaging and
Services

2. Discussion Questions
 Definition and Classification of Products
 Individual Product Decisions
 Product Line and Product Mix Decision:
Product Life- Cycle and Marketing
Strategies

3. DEFINITION AND
CLASSIFICATION OF PRODUCTS

4. Product
 a product is
anything that can be
offered to a market
to satisfy a want or
need, including
physical goods,
services,
experiences, events,
persons, places,
properties,
organizations,
information, and

5. Product Levels: The customer
value hierarchy (cont.)
Potential
product
Augmente
d product
Expected
product
Basic
product
s
Core
product

6. Product Levels: The customer
value hierarchy (cont.)
Augmente
d product
Actual
products
Core
product

7. Product Levels: The customer
value hierarchy (cont.)
 The fundamental level is the core benefit:
the service or benefit the customer is really
buying.
 It constitutes the problem-solving features
or core benefits that consumers seek when
they acquire a product.
 A hotel guest is buying rest and sleep. The
purchaser of a drill is buying holes.
 Marketers must see themselves as benefit
providers.

8. Product Levels: The customer
value hierarchy (cont.)
 At the second level, the marketer must
turn the core benefit into a actual
product.
 Actual products usually have as many as
five
characteristics; a quality level, features,
design, a brand name and packaging.
Thus a hotel room includes a bed,
bathroom, towels, desk, dresser, and

9. Product Levels: The customer
value hierarchy (cont.)
 Finally, the marketer must build an
augmented product around the core and
actual products by adding extra
consumer services and benefits.
 It must provide consumers with a
complete solution to their operating
problems.

10. Product Classification
Products
Consumer Products
Convenience
Shopping
Specialty
Unsought
Industrial Products
Materials and Parts
Capital Goods
Supplies and Services

11. Product Classification (cont.)
 CONSUMER-GOODS CLASSIFICATION
1.The consumer usually purchases convenience
goods frequently, immediately, and with minimal
effort.
 Examples include soft drinks, soaps, and
newspapers. Staples are convenience goods
consumers purchase on a regular basis.
 Impulse goods are purchased without any planning or
search effort, like candy bars and magazines.
 Emergency goods are purchased when a need is
urgent—umbrellas during a rainstorm, boots and shovels
during the first winter snow.

12. Product Classification (cont.)
 CONSUMER-GOODS CLASSIFICATION
2. Shopping goods are those the consumer
characteristically compares on such bases as
suitability, quality, price, and style.
 Examples include furniture, clothing, and major
appliances.
 Homogeneous shopping goods are similar in quality
but different enough in price to justify shopping
comparisons.
 Heterogeneous shopping goods differ in product
features and services that may be more important
than price.

13. Product Classification (cont.)
 CONSUMER-GOODS CLASSIFICATION
3. Specialty goods have unique characteristics or
brand identification for which enough buyers are
willing to make a special purchasing effort.
 Specialty products are characterized by strong
brand preferred and loyalty, special purchase
effort, little comparison of brands and/or price
sensitivity.
 Examples include cars, stereo components, and
men’s suits.

14. Product Classification (cont.)
 CONSUMER-GOODS CLASSIFICATION
4. Unsought goods are those the consumer does
not know about or normally think of buying, such
as smoke detectors.
 Classic examples of known but unsought goods
are life insurance, cemetery plots, and
gravestones. Unsought goods require advertising
and personal-selling support.

15. Industrial Goods Classification
(cont.)
1. Materials and parts are goods that enter the
manufacturer’s product completely.
 They fall into two classes: raw materials, and
manufactured materials and parts.
 Raw materials fall into two major groups: farm
products (wheat, cotton, livestock, fruits, and
vegetables) and natural products (fish, lumber, crude
petroleum, iron ore).
 Manufactured materials and parts fall into two
categories: component materials (iron, yarn,
cement, wires) and component parts (small motors,
tires, castings).

16. Industrial Goods Classification
(cont.)
2. Capital items are long-lasting goods that
facilitate developing or managing the finished
product.
They include two groups: installations and
equipment. Installations consist of buildings
(factories, offices) and heavy equipment
(generators, drill presses, mainframe
computers, elevators).
.

17. Industrial Goods Classification
(cont.)
3. Supplies and business services are short-
term goods and services that facilitate
developing or
managing the finished product.
 Supplies are of two kinds: maintenance and
repair items (paint, nails, brooms) and
operating supplies (lubricants, coal, writing
paper, pencils).
.

18. Individual Product Decisions
1. Product Attributes
2. Product Quality
3. Branding
4. Packaging
5. Labeling and
6. Product- support services

19. Individual Product Decisions
(Cont.)
1. Product Attributes
Marketer should clearly define the benefits
that can be derived out of his product. The
benefit are reflected and provided by product
attributes
such as quality, features and design.

20. Individual Product Decisions
(Cont.)
2. Product Quality: In positioning a product,
quality requires careful consideration. Quality
is
approached from two viewpoints - level and
consistent.
Product quality means the capacity of a
product to perform its functions which include
durability, reliability, precision, ease of
operation and repair.
Quality must be measured in the context of

21. Individual Product Decisions
(Cont.)
 Product Features:
To start with, a product should possess
minimum number of features which can be
increased over time.
Product features is a tool used in tackling
competition.

22.  Product Design: Product design is the
totality of features that affect how a
product looks, feels, and functions to a
consumer.
 Design offers functional and aesthetic
benefits and appeals to both our rational
and emotional sides.
Individual Product Decisions (Cont.)

23. 3. Branding:
A brand is a name, term, sign, symbol, or
design, or a combination of
these intended to identify the products or
services of one seller or a group
of sellers and to differentiate them from those
of competitors.
Four facets of the meaning of brand have been
recognized. These are (i)
attributes, (ii) benefits, (iii) values, and (iv)
personality.
Individual Product Decisions (Cont.)

24.  Branding Equity:
Brand equity is the value of a brand,
based on the extent to which it has high
brand loyalty, name awareness, perceived
quality, strong brand associations, and
other assets such as patents, trademarks,
and channel relationships.
Individual Product Decisions (Cont.)

25. Individual Product Decisions (Cont.)

26.  Branding Decisions:
Individual Product Decisions (Cont.)
To brand or
not to brand
Brand
No Brand
Brand Name
Selection
Selection
Protection
Brand
Sponsor
Manufacturer’s
Brand
Private brand
Licensed
brand
Co-branding
Brand
Strategy
New Brands
Line
extensions
Brand
extensions
Multibrands
Brand
Repositioning
Brand
repositioning
No-brand
repositioning

27.  Branding Decisions:
1. To Brand or Not to brand:
1. Branding helps buyers in a number of ways.
Brand indicates product quality, increases
shopper's efficiency and provides information
about new products.
2. Branding also offers several benefits to sellers.
Branding helps sellers process orders, provide
legal protection for unique product features that
otherwise might be initiated by competitors and
attract a loyal and profitable set of customers.
Individual Product Decisions (Cont.)

28.  Branding Decisions:
2. Brand Name Selection :
A good brand name should have five qualities. These are:
(i) It should indicate product's benefits and qualities.
(ii) It should be convenient to pronounce and easy to
recognize and remember.
(iii) It should be distinctive.
(iv) The brand name should translate easily into foreign
languages.
(v) It should be suitable for registration and legal
protection.
Individual Product Decisions (Cont.)

29.  Branding Decisions:
2. Brand Sponsor:
i) Manufacturer's brand (national brand) − brand
selected and owned by the producer of a product or
service.
ii) Private brand (or middlemen, distribution, or store
brand) − brand selected and owned by a reseller of a
product on service.
iii) Licensed brand − a brand used under license from
other manufacturers who created it earlier.
iv) Co-branding − brand created through combining the
brand names of two different companies on the same
Individual Product Decisions (Cont.)

30.  Branding Decisions:
3. Brand Strategy:
(i) Line extension − adopting a successful brand name to
introduce additional items in a given product category under
the same brand name, such as new flavors, forms, colors,
added ingredients, or package sizes.
(ii) Brand extension − adopting a successful brand name to
launch a new or modified product in a new product category.
(iii) Multibranding − a strategy under which a seller develops
two or more brands in the same product category.
(iv) New brands − creating a new brand name when entering a
new product category for which none of the existing brand
names are suitable.
Individual Product Decisions (Cont.)

31.  Branding Decisions:
4. Brand Repositioning :
(i) Repositioning may involve changing both the
product and its image.
(ii) Repositioning of a brand can also be made by
changing only the product's image. When
repositioning a brand, the marketer should make
sure that such an action will not result in loosing
or confusing existing loyal buyers.
Individual Product Decisions (Cont.)

32. Packaging
Packaging includes all
the activities of
designing and
producing the container
for a product.
Packages might have
up to three layers.
Individual Product Decisions (Cont.)

33. Packaging
Packaging: Various factors contribute to
the growing use of packaging as a
marketing tool:
 Self-service.
 Consumer affluence.
 Company and brand image.
 Innovation opportunity.
Individual Product Decisions (Cont.)

34. Packaging
Packaging: Packaging must achieve a
number of objectives:
1. Identify the brand.
2. Convey descriptive and persuasive
information.
3. Facilitate product transportation and
protection.
4. Assist at-home storage.
5. Aid product consumption
Individual Product Decisions (Cont.)

35. Labeling:
 The label can be a simple attached
tag or an elaborately designed graphic
that is part of the package.
 It might carry a great deal of
information, or only the brand name.
 Even if the seller prefers a simple
label, the law may require more.
Individual Product Decisions (Cont.)

36. Product Support Services
Warranties and Guarantees:
 Warranties are formal statements of
expected product performance by the
manufacturer.
 Products under warranty can be
returned to the manufacturer or
designated repair center for repair,
replacement, or refund.
 Whether expressed or implied,
warranties are legally enforceable.
Individual Product Decisions (Cont.)

37. Warranties and Guarantees:
 Guarantees reduce the buyer’s
perceived risk. They suggest that the
product is of high quality and the
company and its service performance
are dependable.
 They can be especially helpful when
the company or product is not well
known or when the product’s quality is
superior to that of competitors.
Individual Product Decisions (Cont.)

38. Product Line
A group of products within a product class that
are closely related because they perform a
similar function, are sold to the same customer
groups, are marketed through the same outlets
or channels, or fall within given price ranges.

39. Product and Brand Relationship
Product Systems and mixes:
 The width of a product mix refers to how many
different product lines the company
carries.
 The length of a product mix refers to the total
number of items in the mix.
 The depth of a product mix refers to how many
variants are offered of each product in the line.
 The consistency of the product mix describes how
closely related the various product lines are in end
use, production requirements, distribution
channels, or some other way.

40. Product and Brand Relationship

41. Product Line Length
 A product line is considered short when there exists
opportunities to increase profits by adding items.
 Reversibly product line is too long when dropping
some of the existing item results in increased profit.
 Company objectives guide product line length
decision.
 Product lines usually lengthen through passage of
time.
 A company can increase the length of product line
in two ways:
(i) by stretching its line and

42. Product Line Stretching Decisions
 Stretching Downward
 Many companies may start with upper end of
the market and later stretch their lines
downward. This happens due to many reasons.
A company may have first entered the upper
end to establish a quality image and decided to
come downward later. It may react to a
competitor's attack on the upper end by
penetrating into the low end.

43. Product Line Stretching Decisions
 Stretching Upward
 Companies at the lower end of the market may be enticed to enter
the higher end by a faster growth rate or higher margins. Besides,
they may intend to emerge as full-line manufacturer and add
prestige to their existing products. Risks involved in upward
stretching are; (i) higher end competitors may be stronger (ii)
prospective customers may not be convinced about the quality of
the products and (iii) the company's salespeople and distributors
may not be suitable enough to operate in the higher end of the
market.
.

44. Product Line Stretching Decisions
 Stretching Both Ways
 Companies operating in the middle range of the
market may go for stretching their lines in both
directions. The risk involved in this strategy is
that the target buyers of the upper end may
move to the lower end. The company may even
lose these buyers to its competitors.

45. Product Line Stretching Decisions
 Filling in the Product Line
 A product line can be lengthened by adding
more items within its present range. Reasons
for filling product line are; (i) earning extra profit,
(ii) satisfying middlemen, (iii) utilizing excess
capacity, (iv) emerging as the leading full-line
company, and (v) capturing parts of the market
that would otherwise be lost to the competitors.

46. Product Line Stretching Decisions
 Product Line Modernization
 Although a company's product line length may
seem to be adequate, it may require modernization.
 Product Line Featuring
 Product line featuring is the selection of one or few
items that represents the whole line. Sometimes,
producers feature promotional models at the low
end of the line to serve as "traffic builders."
 Product Mix Decisions
 A product mix is the combination of all product lines
and items that a particular seller offers for sale.

47. Product Life-Cycle Strategies
 A company’s positioning and differentiation strategy must
change as the product, market, and competitors change
over the product life cycle (PLC). To say a product has a life
cycle is to assert four things:
1. Products have a limited life.
2. Product sales pass through distinct stages, each posing
different challenges, opportunities, and problems to the
seller.
3. Profits rise and fall at different stages of the product life
cycle.
4. Products require different marketing, financial,
manufacturing, purchasing, and human resource strategies

48. Product Life-Cycle Strategies

49. Product Life-Cycle
1. Introduction—A period of slow sales growth as
the product is introduced in the market. Profits are
nonexistent because of the heavy expenses of
product introduction.
2. Growth—A period of rapid market acceptance and
substantial profit improvement.
3. Maturity—A slowdown in sales growth because
the product has achieved acceptance by most
potential buyers. Profits stabilize or decline
because of increased competition.
4. Decline—Sales show a downward drift and profits
erode.

50. Product Life Cycle Marketing Strategies