MKTG. CHAPTER Product Concepts. Lamb, Hair, McDaniel Designed by Amy McGuire, B-books, Ltd. Prepared by Dana Freeman, B-books, Ltd.

Transcription

1 Designed by Amy McGuire, B-books, Ltd. MKTG Lamb, Hair, McDaniel CHAPTER Product Concepts Prepared by Dana Freeman, B-books, Ltd.

2 Learning Outcomes LO 1 LO 2 LO 3 LO 4 Define the term product Classify consumer products Define the terms product item, product line, and product mix Describe marketing uses of branding

3 Learning Outcomes LO 5 LO 6 LO 7 Describe marketing uses of packaging and labeling Discuss global issues in branding and packaging Describe how and why product warranties are important marketing tools

4 What Is a Product? Define the term product

5 What Is a Product? Product is the starting point of Marketing Mix Product Price Promotion Place (Distribution)

6 What Is a Product? Product Everything, both favorable and unfavorable, that a person receives in an exchange. Tangible Good Service Idea

7 Types of Products Business Product A product used to manufacture other goods or services, to facilitate an organization s operations, or to resell to other consumers. Consumer Product A product bought to satisfy an individual s personal needs or wants

8 Types of Consumer Products Products Consumer Products Business Products Convenience Products Shopping Products Specialty Products Unsought Products

9 Types of Consumer Products Convenience Product Shopping Product Specialty Product Unsought Product LO 2 Increase market share among A relatively existing inexpensive customersitem that merits little shopping effort A product Attract that new requires customers comparison to shopping, existing because products it is usually more expensive and found in fewer stores A particular Create new item products for which for consumers Market search present extensively markets Development Diversification and are reluctant to accept substitutes A product unknown to the potential buyer Introduce new products or a known product that the buyer does not actively into new seek markets

10 Service Service The result of applying human or mechanical efforts to people or objects.

11 How Services Differ from Goods Intangible Inseparable Heterogeneous (greater variability) Perishable Cannot be touched, seen, tasted, heard, or felt. Goods are produced, sold, and then consumed. In contrast, services are often sold, produced, and consumed at the same time. Services are less standardized and uniform than goods. Hard to achieve quality control. Services cannot be stored, warehoused, or inventoried. 11

12 Product Items, Lines, and Mixes Define the terms product item, product line, and product mix

13 Product Items, Lines, and Mixes Product Item Product Line A specific version of a product that can be designated as a distinct offering among an organization s products. A group of closely-related product items. Product Mix All products that an organization sells.

14 Colgate Product Assortment

15 Benefits of Product Lines Advertising Economies Package Uniformity Standardized Components Efficient Sales and Distribution Equivalent Quality

16 Apple s Simple Product Assortment

17 Product Mix Width Product Mix Width The number of product lines an organization offers. Diversifies risk Capitalizes on established reputations

18 The Walt Disney Company Walt Disney Media Networds Walt Disney Parks and Resorts Walt Disney Studios Walt Disney Consumer Products Disney Interactive ABC Television Group Disneyland Animation Studio Publishing Disney Infinity ABC Family Disney World Pixar Disney Story Channels Worldwide Disney Resort Marvel Studio Disney Consumer Products ESPN Disney Paris, Hong Kong, Shanghai Touchtone films Disney Cruise Music Group

19 Product Line Depth Product Line Depth The number of product Items in a product line. Attracts buyers with different preferences Increases sales/profits by further market segmentation Capitalizes on economies of scale Evens out seasonal sales patterns

20 Campbell s Product Lines and Mix

21 Vitamin Water

22 Adjustments Over time, updates in technical or product developments or environmental changes warrant changes to product items, lines, and mixes. The three strategies for making these changes are: Adjustments to Product Items, Lines, and Mixes Product Modification Product Repositioning Product Line Extension or Contraction

23 Product Modification Changes one or more of product characteristics

24 Types of Product Modifications Quality Modification Change in dependability or durability Functional Modification Versatility, effectiveness, convenience, safety Style Modification Aesthetic change, color, design

25 Modifications Nook offering color version to compete in tablet arena QUALITY MODIFICATION Levi modifying pockets to accommodate bigger cell phones FUNCTIONAL MODIFICATION Dr. DRE Beats offers a variety of styles and colors to target different markets tastes and preferences STYLE MODIFICATION

26 Planned Obsolescence Planned Obsolescence The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.

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28 Adjustments Adjustments to Product Items, Lines, and Mixes Product Modification Product Repositioning Product Line Extension or Contraction

29 Repositioning Why reposition established brands? Changing Demographics Declining Sales Changes in Social Environment

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32 Changes in Social Environment

33 Burberry Burberry is a fantastic example of how a brand can change its image with a few simple marketing tweaks. Burberry was suffering from a bad reputation, being associated as gang wear. Clothing was banned in some bars in London In 2001, a new creative director, Christopher Bailey, took over and started introducing new products like swimwear and trench coats that were unaffiliated with previous images of the brand. Celebrity endorsements from Emma Watson and Kate Moss helped cement the new image of Burberry, and now the company is a major luxury brand, touted as a symbol of high class and wealth.

34 Product Line Extension Product Line Extension Adding additional products to an existing product line in order to compete more broadly in the industry.

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36 BRANDING THE SUCCESS OF ANY BUSINESS OR CONSUMER PRODUCT DEPENDS IN PART ON THE TARGETS MARKET S ABILITY TO DISTINGUISH ONE PRODUCT FROM ANOTHER

37 Brand Brand A name, term, symbol, design, or combination thereof that identifies a seller s products and differentiates them from competitors products.

38 Branding Brand Name Brand Mark Brand Equity Global Brand That part of a brand that can be spoken, including letters, words, and numbers The elements of a brand that cannot be spoken The value of company and brand names A brand where at least 20 percent of the product is sold outside its home country

39 Trademark & service mark Trademark: Exclusive right to use a brand or part of a brand. Others are prohibited form using the brand without permission Service Mark Performs the same function for services Parts of a brand other product identification Examples: Sounds, shapes, colors or designs Catchy phrases: your in good hands, Just do it Abbreviations: Coke, Mac, Insta

40 Branding 101 Get a great logo. Place it everywhere. Write down your brand messaging. Integrate your brand. Create a "voice" for your company that reflects your brand. Develop a tagline. Design templates and create brand standards for your marketing materials. Be true to your brand. Be consistent

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43 Benefits of Branding Product Identification Repeat Sales New Product Sales

44 Packaging Describe marketing uses of packaging and labeling

45 Functions of Packaging Contain and Protect Promote Facilitate Storage, Use, and Convenience Facilitate Recycling

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56 Labeling Persuasive Focuses on promotional theme Consumer information is secondary Informational Helps make proper selections Lowers cognitive dissonance Includes use/care

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61 Universal Product Codes Universal Product Codes (UPCs) A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products.

62 Product Warranties Describe how and why product warranties are important marketing tools

63 Product Warranties Warranty A confirmation of the quality or performance of a good or service. Express Warranty Implied Warranty A written guarantee. An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)