1. 12
Setting Product Strategy
Marketing Management, 13th ed

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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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Chapter Questions (cont.)
• 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?

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Caterpillar: A Great Product

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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.

6. Value-based prices
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Figure 12.1 Components of the
Market Offering
Attractiveness
of the market
offering
Product
features
and quality
Services
mix and
quality

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Figure 12.2 Five Product Levels

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The Wedding Market
is a MetaMarket

9. Tangibility
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Product Classification Schemes
Durability
Use

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Durability and Tangibility
Nondurable
goods
Services
Durable
goods

11. Consumer Goods Classification
Shopping
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Convenience
Unsought
Specialty

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

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Product Differentiation
• Product form
• Features
• Customization
• Performance
• Conformance
• Durability
• Reliability
• Repairability
• Style

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Dunkin’ Donuts’ Differentiation

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Design Differentiation

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Service Differentiation
• Ordering ease
• Delivery
• Installation
• Customer training
• Customer consulting
• Maintenance and
repair
• Returns

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Maintenance and Repair

18. Item
Product type
Product line
Product class
Product family
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The Product Hierarchy
Need family

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Product Systems and Mixes
• Product system
• Product mix
• Product assortment
• Depth
• Length
• Width
• Consistency

20. Core product Staples
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Product Line Analysis
Convenience
items
Specialties

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Figure 12.3 Product Item
Contributions to a Product Line’s
Total Sales and Profits

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Figure 12.4 Product Map

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Line Stretching
DDoowwnn--MMaarrkkeett SSttrreettcchh
UUpp--MMaarrkkeett SSttrreettcchh
TTwwoo--WWaayy SSttrreettcchh

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Line Filling

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Pruning
Pruning weak
brands can
strengthen the
remaining brands in
the line

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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

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Product Line Pricing

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Two-Part Pricing

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Co-branding

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Ingredient Branding

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What is the Fifth P?
Packaging, sometimes called the
fifth 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
SSeellff--sseerrvviiccee
CCoonnssuummeerr aafffflluueennccee
CCoommppaannyy//bbrraanndd iimmaaggee
IInnnnoovvaattiioonn ooppppoorrttuunniittyy

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Innovations in Packaging

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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

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Functions of Labels
Identifies
Grades
Describes
Promotes

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Warranties and Guarantees

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Marketing Debate
 With products, is it form or function?
Take a position:
1. Product functionality is the key to brand
success.
or
2. Product design is the key to brand
success.

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Marketing Discussion
 Consider the different means of
differentiating products and services.
 Which ones have the most impact
on your choices?
 Why?