This document defines and categorizes different types of products and aspects of product management. It discusses the core benefit of a product, as well as the basic, expected, augmented, and potential products. It also defines consumer goods, shopping goods, specialty goods, unsought goods, and different types of industrial goods. The document outlines factors for differentiating products such as form, features, customization, quality, reliability, and design. It also discusses packaging, labeling, warranties, and managing product lines and mixes.

2. Product – is
anything that can be
offered to market to
satisfy a want or
need .

4. • Core benefit – it is the fundamental
level. This is the basic product and the
focus is on the purpose for which the
product is intended
• Basic product –This represents all the
qualities of the product.
• Expected product – a set of attributes
and conditions buyers normally expect
when they purchase the product.

5. • Augmented product - This
refers to all additional factors which
sets the product apart from that of the
competition.
• Potential product –
encompasses all the possible
augmentations and transformation
that the product may undergo in the
future.

6. • Durability and
tangibility
Classified into three
groups:
1. Non-durable goods-
normally
consumed in one or few
uses.
2. Durable goods-
goods that

7. 1. Consumer goods – these are usually
purchases frequently, immediately and with a
minimum of effort.
Staples – regular basis
Impulse goods –
purchase without any
planning or research
Emergency goods – purchase
when need is urgent

8. 2. Shopping goods- the consumer in
the process of selection and purchase,
characteristically compares on such
bases as suitability, quality, price and
style.
 Homogeneous shopping goods- similar
in quality but different in price
 Heterogeneous shopping goods- differ
in product features and services .

9. • Specialty goods- have unique
characteristics or brand identification.
• Unsought goods- the consumer
does not know about or does not normally
think buying.

10. Three groups of industrial goods:
1. Materials and parts – goods that enter
the manufacturer’s product completely.
Two classes:
-Raw materials - two major groups: farm
products and natural products
-Manufactured materials and parts -two
categories: COMPONENT MATERIALS –
usually fabricated
COMPONENT PARTS - enter the finished
product with no further change.

11. 2. Capital items – long lasting goods
that facilitate developing or managing
the finished product.
Two groups:
Installations consists of
buildings and heavy equipments
Equipment comprises portable
factory equipment and tools and
office equipment.

12. 3. Supplies and business
services – short-term goods and
services that facilitate developing or
managing the finished product.
Two kinds of supplies:
Maintenance and repair items (
paint, nails, brooms)
Operating supplies (lubricants,
coal, writing paper, pencils)

13. Business includes:
Maintenance and repair
services (window cleaning,
copier repair)
Business advisory services
(legal, management consulting,
advertising)

14. • PRODUCT DIFFERENTIATION
-Form – size, shape, or physical
structure of a product.
-Features - most products an be
offered with varying features that
supplement it basic function
-Customization – Mass
customization is the ability of a company
to meet each customer’s requirement.

15. Performance Quality – the level
at which the product’s primary
characteristics operate.
Conformance Quality – the
degree to which all the produced units
are identical and meet the promised
specifications.
Durability - measure of the
product’s expected operating life under
natural or stressful conditions, also

16. Reliability – measure of the
probability that a product will not
malfunction or fail within a specified time
period.
Repairability – measure of the ease
of fixing a product when it malfunctions
or fails.
Style – describes the product’s outlook
and feel to the buyer.
Design – the totality of features that
affects how a product looks and
functions .

17. Design – the totality of features that
affects how a product looks and functions
• It is the factor that will often give a company
its competitive edge .
• Important in making and marketing retail
services, apparel, packaged goods and
durable equipment.

18. • SERVICE
DIFFERENTIATION
-Ordering Ease – refers to how
easy it is for the customer to place
an order with the company.
-Delivery – refers to how well the
product or service is delivered to
the customer.
-Installation – refers to the work
done to make a product operational

19. Customer Training – refers to training
the customer’s employees to use the
vendor’s equipment properly and
efficiently.
Customer Consulting - refers to data,
information system, and advice services
that the seller offers to the buyers.
Maintenance and Repair - describes the
service program for helping customers
and keep purchased products in good
working order.

20. Returns – products returns are
undoubtedly a nuisance to customers,
manufacturers, retailers, and distributors
alike, they are also an unavoidable reality
of doing business
Two ways of product returns :
1. Controllable returns
2. Uncontrollable returns

21. The Product Hierarchy
1. Need family – the core need that
underlies the existence of a product
family.
2. Product family- all product classes that
can satisfy a core need with reasonable
effectiveness
3. Product class – a group of products
within product family recognized as
having a certain functional coherence.

22. 4. Product line - a group of products within
a product class that are closely related.
5. Product type – a group of item within a
product line that share one several
possible forms of the product
6. Item ( also called stock keeping unit or
product variant ) - a distinct unit within a
brand or product line distinguished by
size, price appearance or some other
attribute.

23. • Product system – a group of diverse
but related items that function in a
compatible manner.
• Product mix ( product
assortment) – set of all products and
items a particular sellers offers for sale.
A company’s product mix has a certain
width, length, depth, and consistency.

24. Width – refers to how many different
product lines the company carries.
Length – refers to the total number of
items in the mix.
Depth – refers to how many variants are
offered of each product in the line.
Consistency- refers to how closely
related the various product lines are in end
use, production requirement, distribution
channels and some other way

25. - Companies normally develop a basic
platform and modules that can be added
to meet different customers requirements.
- Product line managers need to know the
sales and profits of each item to determine
which items to build , maintain, harvest
and divest.

26. Four types of products that yield different
gross margins depending on sale volume
and promotion
• Core product
• Staples
• Specialties
• Convenient items

27. Market profile
Product-line manager must review how
the line is positioned against competitor’s
lines.
Product line length
company’s lengthens its product line in
two ways :

28. Line Stretching occurs when a
company lengthens its product line beyond
its current range.
It can be done through down- market, up
market or both ways.
Down market stretch – company may
want to introduce a lower – Priced line for
any of the three reasons :
1. The company may notice strong growth
opportunities as mass retailers.
2. The company may wish to tie up lower-
end competitor who might otherwise try to

29. Up- market stretch – companies may wish
to enter the high end of the market for
more growth, higher margins or simply to
position themselves as full line
manufacturers.
Two way stretch
- companies serving the middle market
might decide to stretch their line in both
directions.
 Line Filling – adding more items
within the present range .

30. • Product lines need to be modernized.
• In rapidly changing product markets,
modernization is continuous.
• The product line manager typically selects
one or few items in line to feature.
• Product line managers must periodically
review the line for deadwood that is
depressing profits.

31. • Product mix pricing
-The firm searches for a set of prices
that maximize profits on the total mix.
1. Product Line Pricing
-Seller use a well-established price points
for the product in their line.
2. Optional- Feature Pricing
-companies must decide which item to
include in the standard price and which to
offer as an option.

32. 3. Captive-product pricing
- Captive products are strategically used
to maximize revenue. Sellers generally
follow a product-mix pricing strategy .
4. Two-part pricing
-consisting of a fixed fee plus a variable
usage fee.
5. By product pricing
-products are price according to their
value.

33. 6. Product-Bundling pricing
-Products are offered for sale in one
combined unit that is often marked at a
reduced price compared to the sum of
their separate purchase prices.
Pure-bundling occurs when the firm
only offers its product as a bundle.
Mixed-bundling sellers offers goods
both individually and in bundles.

34. CO-BRANDING AND
INGREDIENT BRANDING
Co-branding
-also called dual branding or brand
bundling, to or more well known existing
brands are combined into a joint product
and or marketed together in some
fashion.
• Same-company co-branding
• Joint venture co-branding
• Multiple-sponsor co-branding

35. Ingredient Branding
-special case of co-branding
-involves creating brand equity for
materials components or parts that are
necessarily contained within other
branded products.
“Selfbranding”
-companies advertise and even
trademark their own ingredients.

37. Factors that contributed to the
growing us of packaging as a
marketing tool:
• Self service
• Consumer Affluence
• Company and Brand Name Image
• Innovation Opportunity
• Protecting Intellectual Rights

38. Packaging objectives:
• Identify the brand
• Convey description and persuasive
information
• Facilitate product transportation and
protection
• Assist at home storage
• Aid product consumption

39. Labelling
• Simple tag attached to the product or an
elaborately designed graphic that is part
of the package.
• Carry only the brand name or a great deal
of information.
Functions of labels:
-Identify
-Grade
-Describe

40. Warranties and Guarantees
-Warrantees are formal statements of
expected product performance by the
manufacturer.
-Guarantees reduce buyers risk. They
suggest that the product is of high quality
and that the company and its service
performance are dependable.