The document discusses key concepts around product strategy and marketing, including how to classify and differentiate products, the importance of product design, how to manage a company's product mix and lines, strategies for co-branding and ingredient branding, and how packaging, labeling, warranties and guarantees can be used as marketing tools. It provides frameworks for differentiating products, classifying them by durability, tangibility and use, and mapping product lines. The chapter questions cover topics like product characteristics, differentiation, design, product mixes, co-branding, and use of packaging as a marketing tool.

1. 12
Setting Product Strategy
1

2. Chapter Questions

What are the characteristics of products and
how do marketers classify products?

How can companies differentiate products?

Why is product design important and what
factors affect a good design?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-2

3. Chapter Questions

How can a company build and manage its
product mix and product lines?

How can companies combine products to
create strong co-brands or ingredient brands?

How can companies use packaging, labeling,
warranties, and guarantees as marketing
tools?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-3

4. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-4
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 12.1 Components of the
Market Offering
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6. Figure 12.2 Five Product Levels
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7. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-7
Product Classification Schemes
Durability
Tangibility
Use

8. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-8
Durability and Tangibility
Nondurable goods
Durable goods
Services

9. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-9
Consumer Goods Classification
Convenience
Shopping
Specialty
Unsought

10. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-10
Industrial Goods Classification

Materials and parts

Capital items

Supplies/business services

11. Product Differentiation

Product form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style
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12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-12
Service Differentiation

Ordering ease

Delivery

Installation

Customer training

Customer consulting

Maintenance and repair

Returns

13. Design
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14. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-14
The Product Hierarchy

15. Product Systems and Mixes
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16. Figure 12.3 Product-Item
Contributions to a Product Line’s
Total Sales and Profits
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17. Figure 12.4 Product Map for a
Paper-Product Line
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18. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-18
Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch

19. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-19
Product-Mix Pricing

Product-line pricing

Optional-feature pricing

Captive-product pricing

Two-part pricing

By-product pricing

Product-bundling pricing

20. Ingredient Branding
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21. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-21
What is the Fifth P?
Packaging, sometimes called the 5th
P, is
all the activities of designing and
producing the container for a product.

22. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-22
Factors Contributing to the
Emphasis on Packaging

Self-service

Consumer affluence

Company/brand image

Innovation opportunity

23. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-23
Packaging Objectives

Identify the brand

Convey descriptive and persuasive
information

Facilitate product transportation and
protection

Assist at-home storage

Aid product consumption

24. Functions of Labels
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25. For Review

What are the characteristics of products and
how do marketers classify products?

How can companies differentiate products?

Why is product design important and what
factors affect a good design?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2-25

26. Also For Review

How can a company build and manage its
product mix and product lines?

How can companies combine products to
create strong co-brands or ingredient brands?

How can companies use packaging, labeling,
warranties, and guarantees as marketing
tools?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-26