MGT_209_001_16W

1. Framework for Marketing Management
10
Setting Product Strategy
1

2. Chapter Questions
 What are the characteristics of products and
how do marketers classify products?
 How can companies differentiate products?
 How can a company build and manage its
product mix and product lines?
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3. Chapter Questions
 How can companies use packaging, labeling,
warranties, and guarantees as marketing
tools?
 What strategies are appropriate for new
product development and through the product
life cycle?
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4. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-4
What is a 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 ideas.

5. Figure 10.1 Five Product Levels
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Product Classification Schemes
Durability
Tangibility
Use

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Durability and Tangibility
Nondurable goods
Durable goods
Services

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Consumer Goods Classification
Convenience
Shopping
Specialty
Unsought

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Industrial Goods Classification
 Materials and parts
 Capital items
 Supplies/business services

10. Product Differentiation
 Product form
 Features
 Customization
 Performance
 Conformance
 Durability
 Reliability
 Repairability
 Style
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Service Differentiation
 Ordering ease
 Delivery
 Installation
 Customer training
 Customer consulting
 Maintenance and repair
 Returns

12. Design
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Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch

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Product-Mix Pricing
 Product-line pricing
 Optional-feature pricing
 Captive-product pricing
 Two-part pricing
 By-product pricing
 Product-bundling pricing

15. Ingredient Branding
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What is the Fifth P?
Packaging, sometimes called the 5th P,
is all the activities of designing and
producing the container for a product.

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Factors Contributing to the
Emphasis on Packaging
 Self-service
 Consumer affluence
 Company/brand image
 Innovation opportunity

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Packaging Objectives
 Identify the brand
 Convey descriptive and persuasive
information
 Facilitate product transportation and
protection
 Assist at-home storage
 Aid product consumption

19. Functions of Labels
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20. Figure 10.2 New-Product
Development Decision Process
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Ways to Find Great New Ideas
 Run informal sessions with customers
 Allow time off for technical people to putter on
pet projects
 Make customer brainstorming a part of plant
tours
 Survey your customers
 Undertake “fly on the wall” research to
customers

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More Ways to Find Great Ideas
 Use iterative rounds with customers
 Set up a keyword search to scan trade
publications
 Treat trade shows as intelligence missions
 Have employees visit supplier labs
 Set up an idea vault

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Drawing Ideas from Customers
 Observe customers using product
 Ask customers about problems with products
 Ask customers about their dream products
 Use a customer advisory board or a brand
community of enthusiasts to discuss product

24. Demand-First Innovation and
Growth (DIG) Framework
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Demand Landscape
Opportunity Space
Strategic Blueprint

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Idea Generation:
Creativity Techniques
 Attribute listing
 Forced relationships
 Morphological analysis
 Reverse assumption analysis
 New contexts
 Mind mapping

26. Figure 10.3 Product and
Brand Positioning
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Concept Testing
 Communicability and believability
 Need level
 Gap level
 Perceived value
 Purchase intention
 User targets, purchase occasions,
purchasing frequency

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Prototype Testing
 Alpha testing
 Beta testing
 Rank-order method
 Paired-comparison method
 Monadic-rating method
 Market testing

29. Consumer Goods Market Testing
 Sales-Wave Research
 Simulated Test Marketing
 Controlled Test Marketing
 Test Markets
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Test Market Decisions
 How many test cities?
 Which cities?
 Length of test?
 What information to collect?
 What action to take?

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What is Adoption?
Adoption is an individual’s decision to
become a regular user of a product.

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Stages in the Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption

33. Figure 10.4 Adopter
Categorization on the Basis of
Relative time of Adoption
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34. For Review
 What are the characteristics of products and
how do marketers classify products?
 How can companies differentiate products?
 How can a company build and manage its
product mix and product lines?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-34

35. Also For Review
 How can companies use packaging, labeling,
warranties, and guarantees as marketing
tools?
 What strategies are appropriate for new
product development and through the product
life cycle?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-35