Articles synopsis paper
elizabethchie
MKTG10_IE_Ch10_PPT.ppt*
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MKTG10
Lamb, Hair, and McDaniel
Chapter 10
Product Concepts
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Chapter 10 Product Concepts
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Define the term product
What Is a Product?
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10-1
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Chapter 10 Product Concepts
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What Is a Product?
The product offering, the heart of an organization’s marketing program, is usually the starting point in creating a marketing mix.
Everything, both favorable and unfavorable, that a person receives in an exchange.
Tangible Good
Service
Idea
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Chapter 10 Product Concepts
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What Is a Product?
Promotion
Place (Distribution)
Price
Product
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Chapter 10 Product Concepts
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Classify consumer products
Types of
Consumer Products
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Chapter 10 Product Concepts
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Types of Products
Can a product be both?
Business
Product
Consumer
Product
A product used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other customers
A product bought to satisfy an
individual’s personal wants
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Chapter 10 Product Concepts
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Types of Consumer Products
Unsought
Products
Specialty
Products
Shopping
Products
Convenience
Products
Consumer
Products
Business
Products
Products
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Chapter 10 Product Concepts
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Notes:
- Chapter 7 examined seven categories of business products: major equipment, accessory equipment, component parts, processed materials, raw materials, supplies, and services.
- Consumer products are classified into four types: convenience products, shopping products, specialty products, and unsought products. This approach classifies products by how much effort is used to shop for them.
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Types of Consumer Products
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Convenience
Product
Shopping
Product
Specialty
Product
Unsought
Product
Market
Development
A relatively inexpensive item that merits little shopping effort
(Candy, soft drinks, deodorant, aspirin, hardware, and dry cleaning.)
A product that requires comparison shopping, because it is usually more expensive and found in fewer stores (Homogeneous shopping products include washers, dryers, and televisions. Heterogeneous shopping products include furniture, clothing, housing, and universities.
A particular item for which consumers search extensively and are reluctant to accept substitutes (Fine watches, expensive automobiles, and gourmet restaurants.)
A product unknown to the potential buyer or a known product that the buyer does not actively seek (New products, insurance, burial plots, and encyclopedias.
Chapter 10 Product Concepts
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Define the terms product item,
product line,
and product mix
Product Items,
Lines, and Mixes
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10-3
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Chapter 10 Product Concepts
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Product Items,
Lines, and Mixes
Product Item
Product Line
Product Mix
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.
All products that an
organization sells.
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Chapter 10 Product Concepts
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Source: Campbell's Web site: http://www.campbellsoup.com.
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10.1
Campbell’s Product Lines and Product Mix
Source: Campbell's Web site: http://www.campbellsoup.com.
Chapter 10 Product Concepts
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Benefits of Product Lines
Equivalent Quality
Efficient Sales and
Distribution
Standardized
Components
Package Uniformity
Advertising Economies
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Chapter 10 Product Concepts
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Notes:
- Advertising economies: Product lines provide economies of scale in advertising.
- Package uniformity: Packages in the product line may have a common look but maintain their individual identities.
- Standardized components: Reductions in manufacturing and inventory costs.
- Efficient sales and distribution: A product line enables a full range of choices to customers, and as a result, better distribution and retail coverage.
- Equivalent quality: All products in a line are perceived as having similar quality.
Discussion/Team Activity:
- Discuss product lines that demonstrate the above benefits.
Some ideas include: Gillette, General Motors, Procter & Gamble, Mary Kay Cosmetics
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Benefits of Product Lines
Advertising economies: Product lines provide economies of scale in advertising.
Package uniformity: Packages in the product line may have a common look but maintain their individual identities.
Standardized components: Reductions in manufacturing and inventory costs.
Efficient sales and distribution: A product line enables a full range of choices to customers, and as a result, better distribution and retail coverage.
Equivalent quality: All products in a line are perceived as having similar quality.
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Adjustments
Over time, firms change product items, lines, and mixes to take advantage of new technical or product developments or to respond to changes in the environment.
Product Modification
Product
Repositioning
Product Line
Extension or Contraction
Adjustments to Product Items,
Lines, and Mixes
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Chapter 10 Product Concepts
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Types of Product Modifications
Quality Modification
Functional Modification
Style Modification
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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Change in a product’s dependability or durability.
Change in a product’s dependability or durability.
An aesthetic product change (like color) rather than a quality or functional change
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Chapter 10 Product Concepts
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Repositioning
Repositioning changes consumers’ perceptions of a brand.
Changing Demographics
Declining Sales
Changes in Social Environment
Why reposition established brands?
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Chapter 10 Product Concepts
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Product Line Extension
Adding additional products to an existing product line in order to compete more broadly in the industry.
Some products have low sales or cannibalize sales of other items
Resources are disproportionately allocated to slow-moving products
Items have become obsolete because of new product entries
Contracting product lines is a strategic way to deal with overextension
Symptoms of Overextension
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Chapter 10 Product Concepts
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Describe marketing
uses of branding
Branding
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10-4
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Chapter 10 Product Concepts
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Branding
Brand loyalty, a consistent preference for one brand over all others, is quite high in some product categories.
Brand
Name
Brand
Mark
Brand
Equity
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
Global
Brand
A brand where at least a third of the
earnings come from outside its home country
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Chapter 10 Product Concepts
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Benefits of Branding
Product Identification
Repeat Sales
New-product Sales
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Chapter 10 Product Concepts
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Branding Strategies
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With either a manufacturers’ brand or a private brand, a decision is made among:
Individual brand—different brands for different products (Bold, Cheer, Gain, Tide, Era, and Dreft)
Family brand—common names for different products
or a Combination of individual branding and family branding. (Jack Daniels or Campbells)
Brand
No Brand
Manufacturer’s
Brand
Private Brand
Individual
Brand
Family
Brand
Combi-
nation
Individual
Brand
Family
Brand
Combi-
nation
Chapter 10 Product Concepts
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Branding Strategies
Manufacturers’
Brand
Private
Brand
The brand name of a manufacturer.
A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand.
Captive
A brand manufactured by a third party for exclusive retailer, without evidence of a that retailer’s affiliation.
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Chapter 10 Product Concepts
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Advantages of
Manufacturers’ Brands
Heavy consumer ads by manufacturers
Attract new customers
Enhance dealer’s prestige
Rapid delivery, carry less inventory
If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer
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Chapter 10 Product Concepts
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Notes:
Advantages of carrying manufacturers are compared to the advantages of carrying private brands in Exhibit 10.3.
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Advantages of
Private Brands
Earn higher profits on own brand
Less pressure to mark down price
Manufacturer can become a direct competitor or drop a brand/reseller
Ties customer to wholesaler or retailer
Wholesalers and retailers have no control over the intensity of distribution of manufacturers’ brands
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Chapter 10 Product Concepts
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Notes:
Advantages of carrying manufacturers are compared to the advantages of carrying private brands in Exhibit 10.3.
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Advantages
of Captive Brands
- No evidence of store’s affiliation
- Manufactured by third party
- Sold exclusively at the chain
- Can ask price similar to manufacturer’s brands
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Chapter 10 Product Concepts
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Notes:
Captive brands are brands manufactured by a third party for an exclusive retailer, without evidence of that retailers affiliation.
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Individual Brands Versus
Family Brands
Individual
Brand
Family
Brand
Using different brand names for different products.
Marketing several different
products under the same
brand name.
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Chapter 10 Product Concepts
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Co-branding
Ingredient
Branding
Cooperative Branding
Complementary Branding
Types of Co-branding
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Chapter 10 Product Concepts
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Co-branding
Cobranding is placing two or more brand names on a product or its package.
Ingredient branding identifies the brand of a part that makes up the product. Arm&Hammer with OxiClean
Cooperative branding occurs when two brands receive equal treatment. Ramada Inn, American Express, and United Airlines
Complementary branding refers to products advertised or marketed together to suggest usage. – Seagram’s and 7up and Cold Stone Creamery has worked with Oreo, JELL-O and Jelly Belly to produce new and unique ice cream flavors. In turn, Jelly Belly, for example, launched a Cold Stone Creamery line of jelly bean flavors.
Co-branding is a useful strategy when a combination of brand names enhances the prestige or perceived value of a product or when it benefits brand owners and users.
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Chapter 10 Product Concepts
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Trademarks
A Trademark is the exclusive right to use a brand. A service mark performs the same function for services.
Many parts of a brand and associated symbols qualify for trademark protection.
Trademark right comes from use rather than registration.
The Digital Millennium Copyright Act (DMCA) explicitly applies trademark law to the digital world.
Companies that fail to protect their trademarks face the possibility that their product names will become generic.
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Chapter 10 Product Concepts
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Describe marketing uses of packaging and labeling
Packaging
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Chapter 10 Product Concepts
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Functions of Packaging
Contain and Protect
Promote
Facilitate Storage, Use,
and Convenience
Facilitate Recycling
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Chapter 10 Product Concepts
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Labeling
Greenwashing
Attempting to give the impression of environmental friendliness whether or not it is environmentally friendly.
Persuasive
Focuses on promotional theme
Consumer information is secondary
Informational
Helps make proper selections
Lowers cognitive dissonance
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Chapter 10 Product Concepts
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Notes:
Package labeling takes one of two forms: persuasive or informational.
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Universal Product Codes
A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products.
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Chapter 10 Product Concepts
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Notes:
- Universal product codes, often called bar codes, were first introduced in 1974.
- UPCs help retailers prepare records of customer purchases, control inventories, and track sales.
Discuss global
issues in branding and packaging
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Global Issues in Branding
and Packaging
10-6
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Chapter 10 Product Concepts
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Global Issues in Branding
Global Options
for Branding
Adaptations & Modifications
One Brand Name
Everywhere
Different Brand Names in Different Markets
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Global Issues in Branding
When entering a foreign market with an existing product a firm has three options for handling the brand name:
One brand name everywhere. Coca-Cola uses this strategy in 195 countries around the world. This strategy allows greater recognition of the product and easier promotional coordination from market to market.
Adaptations and modifications are used when the name cannot be pronounced or interpreted successfully in a different language.
Different brand names for different markets: Local brand names are used when translation or pronunciation problems occur, when the marketer wants the brand to appear to be a local brand, or when regulations require localization.
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Global Issues in Packaging
Aesthetics
Global
Considerations
for Packaging
Climate Considerations
Labeling
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Chapter 10 Product Concepts
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Global Issues in Packaging
The major labeling concern is proper translation of ingredient, promotional, and instructional information on labels.
Package aesthetics are important from a cultural perspective. For example, colors may have different connotations in different countries. Package size is influenced by availability of refrigeration, amount of storage space, and even the purchasing power of buyers.
Extreme climates and long-distance shipping necessitate sturdier packages. Packages may need a longer shelf life.
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Chapter 10 Product Concepts
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Describe how
and why product warranties are important
marketing tools
Product Warranties
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10-7
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Chapter 10 Product Concepts
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Product Warranties
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Warranty
Express
Warranty
Implied
Warranty
A confirmation of the quality or performance of a good or service.
A written guarantee.
An unwritten guarantee that the good or service is fit for the purpose for which it was sold.
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Chapter 10 Product Concepts
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