14 ce chapter 12 - setting product strategy
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Marketing kotlerTRANSCRIPT
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Copyright 2013 Pearson Canada Inc.
Setting Product Strategy
Marketing Management Canadian Fourteenth Edition
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Chapter Questions
What are the characteristics of products and how do marketers classify products?
How can companies differentiate products?
Why is product design important and what factors affect a good design?
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Chapter Questions
How can a company build and manage its product mix and product lines?
How can companies combine products to create strong co-brands or ingredient brands?
How can companies use packaging, labeling, warranties, and guarantees as marketing tools?
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What is a Product?
A product is 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.
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Figure 12.1 Components of the
Market Offering
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Figure 12.2 Five Product
Levels
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Product Classification
Schemes
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Durability
Tangibility
Use
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Durability and Tangibility
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Nondurable goods
Durable goods
Services
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Consumer Goods
Classification
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Convenience
Shopping
Specialty
Unsought
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Industrial Goods Classification
Materials and parts
Capital items
Supplies/business services
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Product Differentiation
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Product form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
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Service Differentiation
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance and repair
Returns
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Design
Design is the totality of features that affect how a product looks, feels, and functions to a consumer.
Design offers functional and aesthetic benefits and appeals to both our rational and emotional sides.
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The Product Hierarchy
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Need family
Product family
Product class
Product line
Product type
Item
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Product Systems and Mixes
A product system is a group of diverse but related items that function in a compatible manner.
The extensive iPod product system includes headphones and headsets, cables and docks, armbands, cases,
power and car accessories, and speakers.
A product mix (also called a product assortment) is the set of all products and
items a particular seller offers for sale.
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Table 12.2 Example of Product
Mix and Product Line
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Figure 12.3 Product-Item Contributions to
a Product Lines Total Sales and Profits
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Figure 12.4 Product Map for a
Paper-Product Line
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Line Stretching
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Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
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Product-Mix Pricing
Product-line pricing
Optional-feature pricing
Captive-product pricing
Two-part pricing
By-product pricing
Product-bundling pricing
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Co-branding and Ingredient
Branding
In co-branding, two or more well known brands are combined into a joint product or marketed
together in some fashion.
Ingredient branding is a special case of co-branding. It creates brand equity for materials,
components, or parts that are necessarily
contained within other branded products.
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What is the Fifth P?
Packaging, sometimes called the 5th P, is all the
activities of designing and producing the container
for a product.
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Factors Contributing to the
Emphasis on Packaging
Self-service
Consumer affluence
Company/brand image
Innovation opportunity
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Packaging Objectives
Identify the brand
Convey descriptive and persuasive information
Facilitate product transportation and protection
Assist at-home storage
Aid product consumption
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Functions of Labels
1. Identifies the product or brand
2. Grade the product
3. Describe the product:
who made it, where and when, what it contains, how it is to be used, and how to use it safely.
4. Promote the product through attractive
graphics
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Warranties and Guarantees
Warranties are formal statements of expected product performance by the manufacturer.
Guarantees reduce the buyers perceived risk. They suggest that the product is of high quality and
the company and its service performance are
dependable.
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