The document discusses key aspects of setting a product strategy, including addressing 5 levels of customer value for a product, classifying products as durable/non-durable and for consumer/industrial use, differentiating products based on features and services, identifying a 6-level product hierarchy, analyzing product lines and mixes, and using packaging, labeling, warranties and guarantees to influence perception. The overall goal is to explore and exploit these various product strategy components to build a great brand centered around a great product.

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Setting Product Strategy
Patrick L. Reyes
October 7, 2013

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A Marketer…
1. Addresses Product Levels
2. Classifies Products
3. Differentiates Products and/or
Services
4. Identifies Levels of Product
Hierarchy
5. Analyzes Product Lines, Product
Systems and Mix
6. Delivers with
Packaging, Labeling, Warranties, and
Guarantees
At the heart of a great brand
is a great product.

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Product - 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
ideas.
It’s the Product Stu-dent!

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Chapter focus:
the Product
Components of Market
Offering
Attractiveness of
the market offering
Value-based Prices
Product
features
and quality
Services
mix and
quality

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1. Core Benefit
2. Basic Product
3. Expected Product
4. Augmented Product
5. Potential Product
1. Address 5 Product Levels of
Customer Value

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1. Durability and Tangibility
1. Durable – tangible, many use
2. Non-Durable – tangible, one or a few use
3. Services – intangible, variable, perishable
2a. How Marketers Classify
Products

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2. Use – Consumer or Industrial
1. Consumer – habits
1. Convenience – frequent, minimal effort
2. Shopping – compares quality, price, style
3. Specialty – unique or brand identification
4. Unsought – not normally think of buying
2b. How Marketers Classify
Products

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2. Use
2. Industrial
1. Materials and Parts
1. Raw – processed further
1. Farm – produced
2. Natural – limited supply
2. Manufactured –
1. Component Materials – fabricated further
2. Component Parts – used as is
2c. How Marketers Classify
Products

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2. Industrial
2. Capital Items
1. Installation – major $
2. Equipment
3. Supplies and Business Services
1. Maintenance and Repair
2. Operating
3. Business Services
2c. How Marketers Classify
Products

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3a. Differentiating Products
(Some) Product Differentiators
1. Form – size, shape, physical
2. Features – specifications
3. Customization
4. Performance Quality
5. Conformance Quality - consistency
6. Style

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Services Differentiators
1. Ordering ease
2. Delivery
3. Installation - required
4. Customer Training
5. Customer Consulting
6. Maintenance and Repair
7. Return Policy
3b. Differentiating Services

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Need family
Product family
Product class
Product line
Product type
Item
1. Need family – core need
2. Product family – all product classes,
satisfy core need
3. Product class – group of products
within product family
4. Product line – group of products
within product class
5. Product type – group of items
within product line
6. Item – distinct unit
4. Identify 6 Levels of Product
Hierarchy
Financial Instruments
Life Insurance
Term Life Insurance

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Product System – diverse but related items (product &
accessories)
Product Mix – assortment, all products
1. Width – how many product lines
2. Length – total items in the mix
3. Depth – how many variants in each product line
4. Consistency – how closely related the product
lines are
5a. Analyze Product Lines,
Product Systems and Mixes

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5b. The Product Systems and
Mixes

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Product Line Analysis – basic platform
1. Sales and Profits
2. Market Profile – versus competitors
3. Product Line Stretching
5c. Analyzing Product Lines,
Product Systems and Mixes

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5d. Sales & Profits Analysis

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Company X
5e. Market Profile

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5f. Line Stretching

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Packaging – 5th P, advertising tool,
instant recognition, identity
Labeling – provide info, required
by law
Warranties and Guarantees – provide
peace of mind to some, perception of
performance and dependability
“Food must look good, because even if
it doesn’t taste good, it’s too late”
6. Packaging, Labeling,
Warranties, Guarantees

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Explore and exploit…
1. Product Levels
2. Product Classification
3. Products and/or Services
Differentiation
4. 6 Levels of Product Hierarchy
5. Product Systems and Mix
6. Perception with
Packaging, Labeling, Warranties, an
d Guarantees
At the heart of a great brand
is a great product.

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Setting Product Strategy
Patrick L. Reyes
October 7, 2013