marketing principles

BUS106 Marketing

Principles

Marketing Mix:

Product & Services

Lecture 2

Copyright Notice

Icon Meaning Activity

Take notes These are important points and you should take notes.

You will be required to know this

information.

Individual

Activity

Students complete an individual task.

Group Activity Students discuss/ complete activities in groups and report back to the class.

Research

required

You will need to research this and do

some reading before the next class.

Important

Concept

You MUST understand this concept to

successfully complete the subject. Seek

help if you don’t understand.

Practice

Questions

Students will complete these questions as

practice for the exam.

Learning Objectives

1. Define the term product, product item,

product line and product mix.

2. Explain the three layers of product.

3. Discuss and differentiate between the

various types of products.

4. Discuss the marketing uses of branding.

5. Discuss the marketing uses of packaging

and labeling.

This Topic’s Big Idea

“The product offering is at the heart of an

organisation's marketing program.”

Product VS Service?

Product – everything,

both favorable and

unfavorable, that a

person receives in an

exchange (Tangible)

Service – the result of

applying human or

mechanical efforts to

people or objects

(Intangible)

How services differ

from products

The three layers

of product

Total Product Concept Everything, both favourable and unfavourable, that a

person receives in an exchange. Made up of:

Core product: The problem-

solving core benefits that

consumers are really buying

when they obtain a product

Tangible (Actual) product: A

product’s parts, styling, brand

name and packaging that

combine to deliver the core

produced benefits

Augmented product:

Additional customer services

and benefits that are built

around the core and actual

products and support these

offerings

Potential product: Comprises

all possibilities that could

become part of the expected

or augmented product.

Product

Types & Classifications

Types of

Consumer Products Convenience product: A relatively inexpensive item that merits little shopping effort

• E.g. Coca-Cola, Panadol, Rexona deodorant

Normally require wide distribution in order to satisfy customers’ needs and wants and to achieve the company’s profit goals

Shopping product: A product that requires comparison shopping because it is usually more expensive and found in fewer stores

Homogeneous shopping products perceived as basically similar, e.g. washers, dryers, refrigerators

Heterogeneous shopping products perceived as essentially different, e.g. clothing

Types of

Consumer Products (Cont.)

Speciality product:

A particular item for which consumers search extensively and are reluctant to accept substitutes

• E.g. luxury cars, gourmet restaurants

Whilst all speciality products are also shopping products, not all shopping products are speciality products

Unsought product: A product unknown to the potential buyer or a known product that the buyer does not actively seek

Watch Me: https://www.youtube.com/watch?v=G- p0TWVi0vw

https://www.youtube.com/watch?v=6XFz- kncUtE

Types of

Consumer Products (Cont.)

Product Items, Lines, Mixes

Benefits of Product Lines

Why form product lines?

• Advertising economies of scale

• Package uniformity (common look but still keeping their individual identities)

• Standardised components thus reducing manufacturing and inventory costs

• Efficient sales and distribution

• Equivalent quality across all the products in the line

https://www.fritolay.com/snacks/full-list-of-brands

Product Mix Width and

Line Depth

Product line width: The number of product

lines an organisation offers

Product line depth: The number of product

items in a product line:

– Attracts buyers with different preferences

– Increases sales/profits by further

market segmentation

– Capitalises on economies of scale

– Evens out seasonal sales patterns.

Product Modification

Changing one or more of a product’s characteristics:

Quality modification: changing a product’s dependability or durability

Functional modification: changing a product’s versatility, effectiveness, convenience or safety

Style modification: changing a products aesthetic; for example, style changes in clothing

Planned Obsolescence

The practice of modifying products so they become obsolete before they actually need replacement

Marketers contend that consumers, not manufacturers and marketers, decide when styles are obsolete.

Adopted from: Haibel, C, 2012, Overview of highly accelerated life test

(Halt), ASQ, viewed on 11th of August 2017

https://www.slideshare.net/ASQwebinars/overview-of-highly-accelerated-

life-test-halt

Product line extension

and contraction

Product line extension

Adding additional products to an existing product line in order to compete more

broadly in the industry

Product line contraction

The elimination of unpopular sizes, flavours

and variations to concentrate on successful

product lines

Image adopted from: Line

Extension Intervention 2008,

Ries’ Pieces, viewed on 11th

of August 2017

http://ries.typepad.com/ries_

blog/2008/10/line-extension-

intervention.html

Brand

A name, term, symbol, design or

combination thereof that identifies a

seller’s products and differentiates

them from competitors’ products

Watch Me: https://www.youtube.com/watch?v=sQLlPC_alT8

An Effective Brand Name:

• is easy to pronounce

• is easy to recognise and remember

• is short, distinctive and unique

• describes the product, use and benefit

• has a positive connotation

• reinforces the product image

• is legally protectable

• translatable into other languages

Benefits of Branding

Branding Definitions

Brand Loyalty

Where there is a consistent preference for one brand over all others

• Two elements for brand loyalty

• Relationship between the brand as a person and the customer

• Brand personality

Brand personality provides the brand relationship with:

– Depth

– Feeling

– Liking

Brand dimensions, traits and

examples

Brand Strategies

First decision: to brand or not to brand?

If branding, then which one?

Manufacturer’s, Private (distributor), or Both?

Second decision: individual or family branding?

Brand (cont.)

Manufacturers’ Brands VS. Private Brands

Manufacturer’s brand: the

brand name of a

manufacturer

Private brand: a brand

name owned by a wholesaler

or a retailer

Individual brands VS. family brands

Individual brand: using

different brand names for

different products

Family brand: marketing

several different products

under the same brand name

Captive brand: a brand manufactured by a third party for an

exclusive retailer, without evidence of that retailer’s affiliation https://www.woolworths.com.au/shop/discover/our-brands

Co-branding

Placing two or more brand names on a

product or its packaging

Trademarks

A trademark - is the exclusive right to use a

brand. A service mark performs the same

function for services: For example:

– Shapes

– Colour and logos

– Catchy phrases

– Abbreviations of names

A generic product name cannot be trademarked

Packaging Function

Watch Me:

https://www.youtube.com/watch?v=OWZoW4WaoL4

Facilitating storage,

use and convenience

Facilitating recycling

and reducing

environmental damage

Containing and

protecting products Promoting products

Packaging Function (Cont.)

Persuasive labelling focuses on a promotional theme or logo with consumer information being secondary (e.g. claims such as ‘new’, ‘improved’ etc.)

Informational labelling is designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase (e.g. nutritional information on food packages)

Images adopted from:

Food labels: nutritional

information and ingredients

2014, Raising Children,

viewed on 11th of August

2017

http://raisingchildren.net.au

/articles/food_labels.html

BROTHERS ALL-

NATURAL FRUIT CRISPS

REVIEW 2014, The

Nutrition Twins, viewed on

11th of August 2017

http://nutritiontwins.com/br

others-all-natural-fruit-

crisps-review/

Packaging Functions (Cont.)

Universal product codes

• A series of thick and thin vertical lines (barcodes), readable computerised optical scanners that represent numbers used to track products

Quick response (QR) codes

• A series of black modules arranged in a square design on a white background, making something like a matrix barcode that can store large amounts of product information and links to other data sources

Watch Me: https://www.youtube.com/watch?v=CSIJGNBHjXw

Packaging Functions (Cont.)

Guarantee - A right that the product will not break too easily, will work and perform as generally expected

• Promotes the quality and use of the product

• Declares the product free of defects or failures, or flag to the consumer that if they buy, their risk is minimised

Warranty -The making of extra promises (verbal or written) by the manufacturer, supplier or importer about their products

Image adopted from: Base Products Corporation 2017, viewed on 11th of

August 2017 http://www.basepump.com/products/hydropump/

Warranty Types

Voluntary warranty: promises made by a

seller, manufacturer or service provider about

what they will do if there is a problem with

goods or services

Express warranty: an understanding,

assertion or representation relating to the

quality or condition of goods or services, the

availability of servicing or parts for the goods or

services, or the availability of matching goods

Next Week

Developing and Managing Products.