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12
Setting Product Strategy
1
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
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
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.
Figure 12.1 Components of the
Market Offering
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-5
Figure 12.2 Five Product Levels
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-6
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-7
Product Classification Schemes
Durability
Tangibility
Use
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-8
Durability and Tangibility
Nondurable goods
Durable goods
Services
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-9
Consumer Goods Classification
Convenience
Shopping
Specialty
Unsought
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-10
Industrial Goods Classification

Materials and parts

Capital items

Supplies/business services
Product Differentiation

Product form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-11
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
Design
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-13
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-14
The Product Hierarchy
Product Systems and Mixes
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-15
Figure 12.3 Product-Item
Contributions to a Product Line’s
Total Sales and Profits
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-16
Figure 12.4 Product Map for a
Paper-Product Line
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-17
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-18
Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
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
Ingredient Branding
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-20
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.
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
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
Functions of Labels
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-24
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
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

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Kotler mm 14e 12 ippt

  • 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 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-5
  • 6. Figure 12.2 Five Product Levels Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-6
  • 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
  • 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 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-13
  • 14. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-14 The Product Hierarchy
  • 15. Product Systems and Mixes Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-15
  • 16. Figure 12.3 Product-Item Contributions to a Product Line’s Total Sales and Profits Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-16
  • 17. Figure 12.4 Product Map for a Paper-Product Line Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-17
  • 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 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-20
  • 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 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-24
  • 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