Assignment and Reflection about Principles of Marketing

Product Concepts

Unrestricted

“everything, both favorable and unfavorable, that a person receives in an

exchange”

What is a product?

• Convenience: Inexpensive items that merit little shopping effort

• Shopping: Require comparison shopping • More expensive and found in fewer stores • Homogenous vs heterogenous

• Specialty: Particular items for which consumers search extensively and are reluctant to accept substitutes

• Unsought: Products unknown to the potential buyer or known products that the buyer does not actively seek

Types of consumer products

• Product items: Specific versions of a product that can be designated as a distinct offering among an organization’s products

• Product lines: Groups of closely related product items

• Product mixes: All products that an organization sells

Product terms

Product terms

• Advertising economics • Package uniformity • Standardized components • Efficient sales and distribution • Equivalent quality

Benefits of product lines

Product modification

Product repositioning

Product line extension

Adjustments to product items,

lines, and mixes

Product contraction

Adjustments to product offerings

• Changing one or more characteristics of a product

• Quality modification • Functional modification • Style modification

• Planned obsolescence • Practice of modifying products so those that have

already been sold become obsolete before they need to be replaced

Product modification

• Changing consumer’s perceptions of a brand

• Often motivated by: • Changing demographics • Declining sales • Changes in social environment

Repositioning

• Adding additional products to an existing product line

• Can be overextended if: • Products added do not contribute to profits • Manufacturing or marketing resources are

disproportionally allocated • Items in the line are obsolete

Product line extension

• The opposite of extension – involves removing products from a line

• Good for: • Concentrating efforts on most important products • Reducing wasted effort spent on underperforming

products • Better allocation of resources

Product line contraction

“name, term, symbol, design, or combination that identifies a seller’s

products and differentiates them from competitors’ products”

What is a brand?

• Brand name: part of a brand that can be spoken, including letters, words, and numbers

• Apple • Nike

• Brand mark: elements of a brand that cannot be spoken

Branding

Source: Charis Tsevis

Why brand?

• Three main purposes: product identification, repeat sales, and new product sales

• Brand equity: value of a company or brand name

• Global brand: brand that gets at least one-third of its earnings from outside its home country

• Brand loyalty: consistent preference for one brand over all others

Branding

• Individual branding: • Using different brand names for different products

• Family branding: • Marketing several different products under the same

brand name

Branding strategies

• Co-branding: • Placing two or more brand names on a product or its

package

• Types of co-branding • Ingredient branding: Identifies the brand of a part

that makes up the product • Cooperative branding: Occurs when two brands

receiving equal treatment borrow from each other’s brand equity

• Complementary branding: Suggests usage by advertising and marketing products that are used together

Branding strategies

• Co-branding: • Placing two or more brand names on a product or its

package

Branding strategies

• Exclusive rights to use a brand or part of a brand • Service mark: Trademark for a service • Must file an intent-to-use with the U.S. Patent

and Trademark Office • Can cover:

• Sounds (MGM lion) • Shapes (Nike swoosh) • Colors or décor • Slogans • Abbreviations (Coke, Bud)

Trademarks

• Digital Millennium Copyright Act (DMCA) explicitly applies trademark law to the digital world

• Includes financial penalties for those who: • Violate trademarks • Register an otherwise trademarked term

• Generic product name: Identifies a product by class or type and cannot be trademarked

Trademarks

• Purposes: • Contains and protects products • Promotes products • Facilitates storage, use, and convenience of

products • Facilitates recycling and reduces environmental

damage

Packaging

• Persuasive labeling • Focuses on a promotional theme or logo • Consumer information is secondary

• Informational labeling • Helps consumers make proper product selections • Lowers a consumer’s cognitive dissonance after

the purchase

Labeling

• Universal Product Codes (UPC) • Series of thick and thin vertical lines (bar codes)

readable by computerized optical scanners • Help retailers track customer purchases and

inventories

UPCs (bar codes)

• Warranty: Confirmation of the quality or performance of a good or service

• Express warranty: Written guarantee • Implied warranty: Unwritten guarantee that the

good or service is fit for the purpose for which it was sold

Product warranties

Global issues in branding

Global issues in packaging