unit 3 product, branding, packaging and service decisions

Products, Services, and ExperiencesProducts, Services, and Experiences

Market offerings, pure tangible goods, pure Market offerings, pure tangible goods, pure services, experiencesservices, experiences

What is a Product ?What is a Product ?

Product Product DefinitionsDefinitions

Whatever is offered for “sale” in a Whatever is offered for “sale” in a marketing exchangemarketing exchange

ProductProduct Anything tangible offered to a market for Anything tangible offered to a market for

attention, acquisition, use, or consumption attention, acquisition, use, or consumption that might satisfy a need or want.that might satisfy a need or want.

ServiceService Any activity or benefit that one party can Any activity or benefit that one party can

offer to another that is essentially offer to another that is essentially intangible and does not result in ownership intangible and does not result in ownership of anything.of anything.

Tangible

Produced Then Sold

Intangible

Sold Then Produced and/or Consumed Same Time

Can Store and Transport

Often Produced SeparateFrom Consumer

Perishable

Often Produced InConsumer's Presence

Goods Services

BrandName

QualityLevel

Packaging

Design

Features

Delivery& Credit

Installation

Warranty

After-Sale

Service

CoreBenefit orService

ActualProduct

CoreProduct

AugmentedProduct

Levels of Levels of ProductsProducts

Classification of ProductsClassification of ProductsHow Long the Products Will LastHow Long the Products Will Last

Durable GoodsProvide Long-Term Benefits

(cars, furniture, home appliances)

Durable GoodsProvide Long-Term Benefits

(cars, furniture, home appliances)

Nondurable GoodsProvide Short-Term Benefits

(newspapers, food)

Nondurable GoodsProvide Short-Term Benefits

(newspapers, food)Low

InvolvementDecisions

High Involvement Decisions

Product ClassificationsProduct Classifications

Consumer productsConsumer products

Industrial productsIndustrial products

ConvenienceConvenience

ShoppingShopping

SpecialtySpecialty

UnsoughtUnsought

Frequent purchases Frequent purchases bought with minimal bought with minimal buying effort and little buying effort and little comparison shoppingcomparison shopping

Low priceLow price

Widespread Widespread distributiondistribution

Mass promotion by Mass promotion by producerproducer

Examples: toothpaste, Examples: toothpaste, tea, laundry tea, laundry detergents etc. detergents etc.

Types of Types of Consumer Consumer ProductsProducts

ConvenienceConvenience ShoppingShopping

SpecialtySpecialty

UnsoughtUnsought

Less frequent Less frequent purchases requiring purchases requiring more shopping effort more shopping effort and price, quality, and and price, quality, and style comparisons. style comparisons.

Higher pricingHigher pricing

Selective distribution in Selective distribution in fewer outletsfewer outlets

Advertising and Advertising and personal personal selling/representation selling/representation by producer and by producer and resellerreseller

Examples: television, Examples: television, geyser, cooking stove, geyser, cooking stove, furniture etc. furniture etc.

Types of Types of Consumer Consumer Products Products

ShoppingShopping SpecialtySpecialty

UnsoughtUnsought

Strong brand Strong brand preference and loyalty, preference and loyalty, requires special requires special purchase effort, little purchase effort, little brand comparisons, brand comparisons, and low price and low price sensitivitysensitivity

High priceHigh price

Exclusive distributionExclusive distribution

Carefully targeted Carefully targeted promotion by promotion by producers and resellersproducers and resellers

Examples: Rolex Examples: Rolex watches, ARY gold Etc.watches, ARY gold Etc.

ShoppingShopping

SpecialtySpecialty UnsoughtUnsought

Little product awareness Little product awareness and knowledge (or if and knowledge (or if aware, sometimes aware, sometimes negative interest)negative interest)

Pricing variesPricing varies

Distribution variesDistribution varies

Aggressive advertising Aggressive advertising and personal selling by and personal selling by producers and resellersproducers and resellers

Examples: life insurance, Examples: life insurance, blood donations etc.blood donations etc.

Industrial productsIndustrial products Materials and partsMaterials and parts

Capital itemsCapital items

Supplies and servicesSupplies and services

Individual Product/Service Individual Product/Service DecisionsDecisions

Product Attributes

Branding

Packaging

Labeling

Product Support Services

QualityQualityQualityQuality FeaturesFeaturesFeaturesFeatures

Style & DesignStyle & DesignStyle & DesignStyle & Design

Product AttributesProduct Attributes Developing a Product or Service Involves Defining Developing a Product or Service Involves Defining the Benefits that it Will Offerthe Benefits that it Will Offer

Product Quality Product Quality

Product FeaturesProduct Features

Product Style & Design

Ability of a Product to Perform Its Functions; Includes Level &

Consistency

Ability of a Product to Perform Its Functions; Includes Level &

Consistency

Help to Differentiate the Product from Those in the Competition

Process of Designing a Product’s Style & Function

BrandingBranding

Product Attributes

Branding

Packaging

Labeling

BrandBrand

A name, term, sign, symbol, or design, or a A name, term, sign, symbol, or design, or a combination of these, intended to identify combination of these, intended to identify the goods or services of one seller or group the goods or services of one seller or group of sellers and to differentiate them from of sellers and to differentiate them from those competitorsthose competitors

What is a Brand?What is a Brand?

It’s who you are...and what you stand for.It’s who you are...and what you stand for.

B E T on J azz

C hildren’s C able N et

KnowledgeTV

MuseumC hannel

Booknet

ArenaC lassical

T ravel C hannel

C lass ic A rtsS howcase

A nimalP lanet

N ew S cienceN etwork

B LO O M B E R GN E W S IN F O R M A T IO N

C -S P A N

Noggin

T heaterC hannel

AnthropologyP&E

OvationOvation

Arts & Antiques

S C IE N C E

K ID SC IV IL IZA T IO N

Why? Why?

Because...A Strong Brand is the Heart and “Soul” Because...A Strong Brand is the Heart and “Soul” of an Organization!of an Organization!

What Branding Is?What Branding Is?

A clear identity in the consumer's mindA clear identity in the consumer's mind Who you are: Product/service qualityWho you are: Product/service quality What you stand for: Values/promise - Can be What you stand for: Values/promise - Can be

registered and legally protected registered and legally protected A set of associations and feelings - market A set of associations and feelings - market

segmentationsegmentation

To Brand or Not to Brand?To Brand or Not to Brand?

Product attributes (lowest level)Product attributes (lowest level) BenefitsBenefits Beliefs and values Beliefs and values

Branding strategies:Branding strategies: i) Brand Positioning i) Brand Positioning

Branding strategies:Branding strategies: ii) ii) Brand Name Selection Brand Name Selection

• Short and simple• Suggestive of product benefits• Legally available• No negative imagery• Easy to spell, read, and

pronounce• Adaptable for international

markets• Adaptable to packaging/labeling

needs• Adaptable to any advertising

medium

A GoodBrand Name

Generic name: A brand name that has Generic name: A brand name that has become a generally descriptive term become a generally descriptive term ““for a class of products”for a class of products”..

If this occurs, the original owner loses If this occurs, the original owner loses exclusive right to the brand name exclusive right to the brand name (which is very bad for marketers).(which is very bad for marketers).

Examples: nylon, aspirin, escalator, Examples: nylon, aspirin, escalator, kerosene, etc.kerosene, etc.

Manufacturer brandsManufacturer brands Private (store) brandsPrivate (store) brands Licensed brandsLicensed brands Co-brandingCo-branding

Branding strategies:Branding strategies: iii) Brand iii) Brand SponsorshipSponsorship

Line Extension

Multibrands

Brand Extension

New BrandsBra

Existing New

Product Category

Existing

Branding strategies:Branding strategies: iv) Brand iv) Brand DevelopmentDevelopment

BrandingBranding

Rejection

Non-recognition

Recognition

Preference

Insistence

Change Position

Increase Awareness

Continue Education

Maintain Availability

Develop High Brand Equity

Focus:

Focus :

Product Attributes

Branding

Packaging

Labeling

PackagingPackaging

Activity of designing and producing the Activity of designing and producing the containercontainer or or wrapperwrapper for a product. for a product.

Packaging used to Packaging used to containcontain and and protectprotect the the product.product.

Goals of PackagingGoals of Packaging

Protection against damage, spoilage, Protection against damage, spoilage, tampering etc.tampering etc.

Assistance in marketing the Assistance in marketing the product product

Cost effectiveness (and good for the Cost effectiveness (and good for the environment)environment)

LabelingLabeling

Product Attributes

Branding

Packaging

Labeling

LabelingLabeling

Printed information appearing on or with the Printed information appearing on or with the package.package.

Performs several functions:Performs several functions: Identifies product or brandIdentifies product or brand Describes several things about the productDescribes several things about the product Promotes the product through attractive Promotes the product through attractive

graphics.graphics.

Universal Product Code Universal Product Code (UPC)(UPC)

AA bar code on a product’s package that provides bar code on a product’s package that provides information read by optical scanners.information read by optical scanners.

UPC codes provide several advantages:UPC codes provide several advantages: labor labor saving, improve inventory control, and help with saving, improve inventory control, and help with marketing research.marketing research.

79400 80740

PromotesIdentifies

Competitive Advantages

Describes

SalesTasks

Product Safety

Packaging

Labeling

Packaging

Labeling

Functions of packaging & Functions of packaging & labelinglabeling

Individual Product DecisionsIndividual Product Decisions

Product Attributes

Branding

Packaging

Labeling

Companies should design its support services to Companies should design its support services to profitably meet the needs of target customers profitably meet the needs of target customers

and gain competitive advantage.and gain competitive advantage.

Product - Support ServicesProduct - Support Services

How?How?Step 1.Step 1. Survey customers to assess the value of Survey customers to assess the value of current services and to obtain ideas for new current services and to obtain ideas for new services.services.Step 2. Step 2. Assess costs of providing desired services.Assess costs of providing desired services.Step 3.Step 3. Develop a package of services to delight Develop a package of services to delight customers and yield profits to the company.customers and yield profits to the company.

How?How?

Service marketing Service marketing

Product Line StrategiesProduct Line Strategies

Product Line ExtensionsProduct Line ExtensionsProduct Line ExtensionsProduct Line Extensions

StretchingStretching

Adding new items to line

FillingFilling

Adding sizes or styles

Downward

Upward

Contracting aContracting aProduct LineProduct Line

Dropping items

Contracting aContracting aProduct LineProduct Line

Dropping items

Two-way

New Product Development New Product Development

The development of original products, product The development of original products, product improvements, product modifications, and new improvements, product modifications, and new

brands through the firm’s own R&D efforts.brands through the firm’s own R&D efforts.

Major Stages in New-Product Major Stages in New-Product DevelopmentDevelopment

IdeaGeneration

IdeaScreening

ConceptDevelopmentand Testing

MarketingStrategy

BusinessAnalysis

ProductDevelopment

TestMarketing

Commercialization

Sources of New-Product IdeasSources of New-Product Ideas

EmployeesEmployees CustomersCustomers ResellersResellers Suppliers/ vendorsSuppliers/ vendors CompetitorsCompetitors Advertising agenciesAdvertising agencies

Marketing research firmsMarketing research firms Other manufacturersOther manufacturers InternationalInternational

Stage 2: Idea ScreeningStage 2: Idea Screening Ideas are evaluated against criteria; most are Ideas are evaluated against criteria; most are

eliminated.eliminated.

It is done to avoid:It is done to avoid:

Product development costs increase Product development costs increase substantially in later stages.substantially in later stages.

Stage 3: Concept Development and Stage 3: Concept Development and TestingTesting

Concept tests ask target consumers to Concept tests ask target consumers to evaluate product concepts.evaluate product concepts.

Because: Because:

Product concepts provide detailed versions Product concepts provide detailed versions of new product ideas.of new product ideas.

Stage 4: Stage 4:

Marketing Strategy DevelopmentMarketing Strategy Development Strategy statements describe:Strategy statements describe:

– The target market, product positioning, and sales, The target market, product positioning, and sales, share, and profit goals for the first few years.share, and profit goals for the first few years.

– Product price, distribution, and marketing budget Product price, distribution, and marketing budget for the first year.for the first year.

– Long-run sales and profit goals and the marketing Long-run sales and profit goals and the marketing mix strategy.mix strategy.

Stage 7: Test MarketingStage 7: Test Marketing

Standard test marketsStandard test markets

Controlled test marketsControlled test markets

Simulated test marketsSimulated test markets

StandardTest Market

Full marketing campaignin a small number of representative cities.

StandardTest Market

Full marketing campaignin a small number of representative cities.

SimulatedTest Market

Test in a simulated shopping environment

to a sample of consumers.

SimulatedTest Market

Test in a simulated shopping environment

to a sample of consumers.

Controlled Test Market

A few stores that have agreed to carry newproducts for a fee.

Controlled Test Market

A few stores that have agreed to carry newproducts for a fee.

Stage 8 Stage 8 CommercializationCommercialization

New-Product Development New-Product Development ManagementManagement

KeyIssues

Top LevelSupport

Market-GuidedR & D

Integration &Coordination

Authority

IdeaGeneration

IdeaScreening

ConceptDevelopmentand Testing

MarketingStrategy

BusinessAnalysis

ProductDevelopment

TestMarketing

Commercialization

New Product Development New Product Development

New-To-The WorldNew-To-The World

RepositioningsRepositionings

Product Line Additions

New Category Entries

Product Improvements

Types of New Products IncludeTypes of New Products Include

Communicate Availability Communicate Availability

Communicate Benefits Communicate Benefits

Emphasize Advantages Emphasize Advantages

Motivate Consumers Motivate Consumers

Ensure Satisfaction Ensure Satisfaction

Strategy

AwarenessAwareness

InterestInterest

EvaluationEvaluation

TrialTrial

AdoptionAdoption

Consumer Adoption ProcessConsumer Adoption Process

ProductDevelopment

Introduction

Profits

Growth Maturity Decline

Sales andProfits ($)

Sales and Profits Overthe Product’s Life FromInception to Demise

Product Life-Cycle Product Life-Cycle (PLC)(PLC)

The Typical Product Life Cycle (PLC) The Typical Product Life Cycle (PLC) Has Five StagesHas Five Stages

Product Development, Introduction, Product Development, Introduction, Growth, Maturity, DeclineGrowth, Maturity, Decline

Not all products follow this cycleNot all products follow this cycle

Some products move rapidly through the Some products move rapidly through the product life cycle, while others pass product life cycle, while others pass through those stages over long time through those stages over long time periods.periods.

Product Life-Cycle StrategiesProduct Life-Cycle Strategies

ProductDevelopment

Introduction

Profits

Product Development StageProduct Development Stage

Product Product developmentdevelopment

IntroductionIntroduction

GrowthGrowth

MaturityMaturity

DeclineDecline

Begins when the Begins when the company develops a company develops a new-product ideanew-product idea

Sales are zeroSales are zero Investment costs are Investment costs are

highhigh Profits are negativeProfits are negative

PLC Stages PLC Stages

Introduction StageIntroduction Stage

Product developmentProduct development IntroductionIntroductionGrowthGrowth

MaturityMaturity

DeclineDecline

Low salesLow sales High cost per High cost per

customer acquiredcustomer acquired Negative profitsNegative profits Innovators are Innovators are

targetedtargeted Little competitionLittle competition

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Low sales Low sales

High cost per customerHigh cost per customer

NegativeNegative

Create product awareness and trial

Offer a basic productOffer a basic product

Use cost-plus Use cost-plus

DistributionDistribution Build selective distributionBuild selective distribution

AdvertisingAdvertising Build product awareness among early adopters and dealers

Build product awareness among early adopters and dealers

Growth StageGrowth Stage

ProductDevelopment

Introduction

Profits

Product developmentProduct development

GrowthGrowthMaturityMaturity

DeclineDecline

Rapidly rising salesRapidly rising sales Average cost per Average cost per

customercustomer Rising profitsRising profits Early adopters are Early adopters are

targetedtargeted Growing competitionGrowing competition

SalesSales

CostsCosts

ProfitsProfits

ProductProduct

PricePrice

Rapidly rising sales Rapidly rising sales

Average cost per customerAverage cost per customer

Rising profitsRising profits

Maximize market shareMaximize market share

Offer product extensions, service, warranty

Price to penetrate marketPrice to penetrate market

DistributionDistribution Build intensive distributionBuild intensive distribution

AdvertisingAdvertisingBuild awareness and interest in the

mass marketBuild awareness and interest in the

mass market

ProductDevelopment

Introduction

Profits

Maturity StageMaturity Stage

GrowthGrowth

MaturityMaturityDeclineDecline

Sales peakSales peak Low cost per Low cost per

customercustomer High profitsHigh profits Middle majority are Middle majority are

targetedtargeted Competition begins to Competition begins to

declinedecline

SalesSales

CostsCosts

ProfitsProfits

ProductProduct

PricePrice

Peak salesPeak sales

Low cost per customerLow cost per customer

High profitsHigh profits

Maximize profit while defending market share

Diversify brand and modelsDiversify brand and models

Price to match or best competitorsPrice to match or best competitors

DistributionDistributionBuild more intensive distributionBuild more intensive distribution

AdvertisingAdvertisingStress brand differences and benefitsStress brand differences and benefits

Decline StageDecline Stage

ProductDevelopment

Introduction

Profits

GrowthGrowth

MaturityMaturity

DeclineDecline

Declining salesDeclining sales Low cost per Low cost per

customercustomer Declining profitsDeclining profits Laggards are Laggards are

targetedtargeted Declining Declining

competitioncompetition

SalesSales

CostsCosts

ProfitsProfits

ProductProduct

PricePrice

Declining salesDeclining sales

Low cost per customerLow cost per customer

Declining profitsDeclining profits

Reduce expenditure and milk the brandReduce expenditure and milk the brand

Phase out weak itemsPhase out weak items

Cut priceCut price

DistributionDistributionGo selective: phase out unprofitable outletsGo selective: phase out unprofitable outlets

AdvertisingAdvertising Reduce to level needed to retain hard-core loyal customers

Reduce to level needed to retain hard-core loyal customers

Overlap of Life Cycle for Products Overlap of Life Cycle for Products A and BA and B

WINDOWS 95 1991 1995 1996 1997

WINDOWS 3.1

Extending the Product Life CycleExtending the Product Life Cycle

1.1. Increase frequency of use Increase frequency of use by present customersby present customers

2.2. Add new usersAdd new users

3.3. Find new usesFind new uses

4.4. Change product quality or Change product quality or packagingpackaging

Market Modification

Product ModificationProduct Modification

To prevent the product going into To prevent the product going into decline you modify the productdecline you modify the product

Adding new features, variations, model Adding new features, variations, model varieties will change the consumer reaction varieties will change the consumer reaction - create more demand therefore you attract - create more demand therefore you attract more usersmore users

unit 3 product, branding, packaging and service decisions

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