The document discusses key aspects of setting a product strategy, including product classifications, differentiation, relationships between products and brands, product systems and mixes, product line analysis, and the role of packaging. It addresses classifying products based on durability, tangibility and use. Services can be differentiated based on factors like ordering, delivery, installation and customer support. Effective product strategies consider product lines and mixes, assessing line length, depth, consistency and individual product contributions. Packaging is highlighted as an important marketing element that identifies the brand and conveys information to buyers.

1. SETTING PRODUCT STRATEGY Farlah Angela S. Sevilla Ateneo Graduate School of Business 05.08.10 www.farlahsevilla.blogspot.com

2. SETTING PRODUCT STRATEGY Product Characteristics and Classifications Product Levels: customer- value hierarchy Product Classifications Differentiation Product Differentiation Services Differentiation www.farlahsevilla.blogspot.com

3. SETTING PRODUCT STRATEGY Product and Brand Relationships Product Systems and Mixes Product line analysis Product- line length Product mix pricing Packaging www.farlahsevilla.blogspot.com

4. Components of Market Offering www.farlahsevilla.blogspot.com

5. What is a 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 www.farlahsevilla.blogspot.com

6. In planning market offering, address 5 product levels: customer- value hierarchy www.farlahsevilla.blogspot.com

7. In planning market offering, address 5 product levels: customer- value hierarchy www.farlahsevilla.blogspot.com

8. In planning market offering, address 5 product levels: customer- value hierarchy www.farlahsevilla.blogspot.com

9. In planning market offering, address 5 product levels: customer- value hierarchy www.farlahsevilla.blogspot.com

10. In planning market offering, address 5 product levels: customer- value hierarchy www.farlahsevilla.blogspot.com

11. PRODUCT CLASSIFICATION SCHEME DURABILITY TANGIBILITY USE www.farlahsevilla.blogspot.com

12. DURABILITY AND TANGIBILITY NONDURABLE GOODS Available, small mark up, advertise heavily DURABLE GOODS More personal selling, higher margin, more seller guarantees SERVICES More quality control, supplier credibility, adaptability Tangible, consumed in one or few uses Tangible, survive many uses Intangible, inseparable, variable, perishable www.farlahsevilla.blogspot.com

13. CONSUMER GOODS CLASSIFICATION www.farlahsevilla.blogspot.com

14. INDUSTRIAL GOODS CLASSIFICATION www.farlahsevilla.blogspot.com

15. To be branded, products must be differentiated Product form- size, shape or physical structure of a product Features- supplement basic function avoid “feature fatigue” Customer value versus company cost www.farlahsevilla.blogspot.com

16. To be branded, products must be differentiated Customization- products are customized to an individual www.farlahsevilla.blogspot.com

17. To be branded, products must be differentiated Performance quality level at which product’s characteristics operate Quality, adopt value model Appropriate to target market and competitor’s performance level www.farlahsevilla.blogspot.com

18. To be branded, products must be differentiated Conformance quality- degree to which all units are identical and meet the promised specifications www.farlahsevilla.blogspot.com

19. To be branded, products must be differentiated Durability product’s expected operating life under natural or stressful condition Customers pay more for durable products Extra price must not be excessive www.farlahsevilla.blogspot.com

20. To be branded, products must be differentiated Reliability Measure of the probability that the product will not malfunction or fail within a specified period of time www.farlahsevilla.blogspot.com

21. To be branded, products must be differentiated Repairability ease of fixing a product when it malfunctions or fails Ideal if users could fix the product themselves, with little or no cost www.farlahsevilla.blogspot.com

22. To be branded, products must be differentiated Style- describes the product’s look and feel to the buyer www.farlahsevilla.blogspot.com

23. What can differentiate Services? Ordering ease- how easy for customer to place an order www.farlahsevilla.blogspot.com

24. What can differentiate Services? Delivery how well product is brought to customer includes speed, accuracy and care www.farlahsevilla.blogspot.com

25. What can differentiate Services? Installation work done to make a product operational in its planned location Important for companies with complex products www.farlahsevilla.blogspot.com

26. What can differentiate Services? Customer training Training the customer’s employees to use the vendor’s equipment properly and efficiently www.farlahsevilla.blogspot.com

27. What can differentiate Services? Customer consulting- data, information systems, advice services that the seller offers to buyers www.farlahsevilla.blogspot.com

28. What can differentiate Services? Maintenance and repair service program for helping customers keep purchased products in good working order Returns unavoidable reality of doing business, especially with online purchases www.farlahsevilla.blogspot.com

29. Product Systems and Mixes Product sytem- group of diverse but related items that function in a compatible manner Product mix or product assortment- set of all products and items a particular seller offers for sale www.farlahsevilla.blogspot.com

30. A product mix has the ff: Width- how many product lines the company carries www.farlahsevilla.blogspot.com

31. A product mix has the ff: Length- total number of items in the product mix www.farlahsevilla.blogspot.com

32. A product mix has the ff: Depth- how many variants are in each product www.farlahsevilla.blogspot.com

33. A product mix has the ff: Consistency how closely related the various product lines are in end use, production requirements, distribution channels www.farlahsevilla.blogspot.com

34. Product- Item contributions to a Product Line’s Total sales and profit www.farlahsevilla.blogspot.com

35. Product line analysis www.farlahsevilla.blogspot.com

36. Line Stretching Two- way stretch www.farlahsevilla.blogspot.com

37. Six situations calling for product- mix pricing Product- line pricing Product lines rather than single products Introduce price steps Seller’s task: establish perceived quality differences that justify the price difference E.g. men’s suit at three price levels www.farlahsevilla.blogspot.com

38. Six situations calling for product- mix pricing Optional- feature pricing Optional products, features, services along with main product Pricing is a sticky problem. E.g. economy model of auto companies, restaurants with low food price but high liquor price www.farlahsevilla.blogspot.com

39. Six situations calling for product- mix pricing Captive-product pricing Products that require use of ancillary products E.g. cellular phones with lock- in period, ID makers/ printers using ink and PVC cards www.farlahsevilla.blogspot.com

40. Six situations calling for product- mix pricing Two- part pricing Fixed fee plus variable usage fee E.g. telephone postpaid plans Fixed fee should be low enough, profit from usage fee www.farlahsevilla.blogspot.com

41. Six situations calling for product- mix pricing By- product pricing If the by- products have value to a customer group, they should be priced on their value. E.g sugar refinery which sells by- products of its sugar canes www.farlahsevilla.blogspot.com

42. Six situations calling for product- mix pricing Product- bundling pricing Pure bundling- product is offer only as a bundle “ tied- in sales” E.g. actor and other talents in a film company Mixed bundling- less cost than if sold separately www.farlahsevilla.blogspot.com

43. Packaging All the activities of designing and producing the container for a product. The fifth “P” An element of product strategy Buyer’s first encounter with the product www.farlahsevilla.blogspot.com

44. Factors that contributed to use of packaging as marketing tool Self- service 50- 70% of all purchases are sold on a self- service basis Package should: attract attention, describe the product’s features, create consumer confidence, make favorable overall impression www.farlahsevilla.blogspot.com

45. Factors that contributed to use of packaging as marketing tool Consumer affluence- rising consumer affluence means more willingness to pay for convenience, appearance, dependability and prestige of better packages www.farlahsevilla.blogspot.com

46. Factors that contributed to use of packaging as marketing tool Company and brand image instant recognition of company brand Create visible billboard effect www.farlahsevilla.blogspot.com

47. Factors that contributed to use of packaging as marketing tool Innovation opportunity Unique materials and features that could benefit consumers and increase profit of producers www.farlahsevilla.blogspot.com

48. Packaging objective Identify the brand Convey descriptive and persuasive information Facilitate product transportation and protection Assist at- home storage Aid product consumption www.farlahsevilla.blogspot.com

49. SETTING PRODUCT STRATEGY Product Characteristics and Classifications Product Levels: customer- value hierarchy Product Classifications Differentiation Product Differentiation Services Differentiation www.farlahsevilla.blogspot.com

50. SETTING PRODUCT STRATEGY Product and Brand Relationships Product Systems and Mixes Product line analysis Product- line length Product mix pricing Packaging www.farlahsevilla.blogspot.com

51. SETTING PRODUCT STRATEGY Farlah Angela S. Sevilla Ateneo Graduate School of Business 05.08.10 farlahsevilla.blogspot.com www.farlahsevilla.blogspot.com