mkt 304 product planning, branding

8/11/2019 Mkt 304 Product Planning, Branding

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McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

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The Meaning of Product

A productis the need-satisfying offering of an

organization.

It may be a good, service, idea, person or place.

A product is a set of tangible and intangible

attributes/characteristics that allow the need

satisfaction to occur.


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Consumer and Business Products

Consumer productsare those which are

ultimately used by the consumer.

Business productsare those used byintermediaries between the producer and

the ultimate consumer.


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Classification of ConsumerGoods

Convenience Goods- purchased with aminimum of effort and thought. No comparisonshopping.

Shopping Goods- consumers compare quality,price, style in several stores prior to making apurchase.

Specialty Goods- consumers have a strongbrand preference and insist on that particularbrand.

Unsought Goods- products that are so newthat consumers are unaware of them.


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Classification of Business Goods

Raw Materials- Goods that become part of anothertangible product without being processed.

Fabricating Materials- Goods that become part ofanother tangible product after having been processed.

Installations- Manufactured products that are anorganizations major, expensive, and long-livedequipment.

Accessory Equipment- Goods that are used in anorganizations operation.

Operating Supplies- Goods with low dollar value, shortlife, and which aid in operations without becoming partof the finished product.


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Sellers

services

Product

quality Physical

characteristicsof goods

Price

Brand

Design

PackagingProductwarranty

Sellers

reputation

Color

Fig. 8-1 - Product as Tangible and Intangible Factors


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Quality, Design and Color

What is quality? How much quality?> TQM> ISO 9000

Product design/style and color

>Attractiveness, distinctiveness, andfunctionality

> Involves product and packaging

> Can be registered

> Planned Obsolescence Technological obsolescence - new products

render current products obsolete.

Style obsolescence - altering existing product to

differentiate it from previous model or version.


7/21McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

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Branding

A brandis a name/markthat differentiates theproduct of one seller or group of sellers from

competing products.

A brand nameconsists of words, letters, and

numbersthat can be vocalized.

A brand markis the part of the brand that

appears in the form of a symbol, design,

distinctive color or lettering. A trademarkis a brand that has been given

legal protection.

Note: Brand protectionand brand names.


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Brand Equity

Brand Equity is the extra valuethat thebrand gives to the product.

Brand Equity consists of . . .

> Brand awareness/familiarity

> Brand differentiation versus competition

> Brand esteem

> Brand preference

> Brand loyalty> Product line extensions

> Trademark legal protection

> Trademark licensing



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Packaging Purposes of packaging:

>Allows product to be shipped, stored, anddisplayed

> Protect the product from breakage, spoilage,tampering, and theft before and after purchase.

> Helps promote the product

Criticism of packaging

> Deceptive Packaging

> Expensive Packaging

> Environmentally-Unfriendly Packaging

> Hazardous Packaging

> Disposing of Packaging



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Labeling, Warranty, andServicing

Types of labels

> Brand label

> Descriptive label

> Grade label

Warranty

> Whats covered and for how long

Servicing

> How does customer order and repair product

> The level of service quality and convenience



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Whats a New Product

Categories of new products

> Really innovative and unique.

> Replacements that are significantly different

from previous versions.> Imitative products that are new to the

organization, but not new to the market.

> Existing products attacking new markets. How do companies find and introduce

new products into the market?



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Identify

the strategic

role of newproducts,

then...

1.

Idea

generation

2.

Screening

of ideas

3.

Business

analysis

4.

Prototype

development

5.

Market

Tests

6.

Commer-

cialization

Fig 8-2 - The New-Product Development

Process



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1. Fords Edsel automobile.

2. Duponts Corfam synthetic leather.

3. Polaroids Polavision.

4. United Artists Heavens Gate western movie. 5. RCAs Videodisc.

6. Times TV-Cable Week magazine

7. IBMs PCjr.

8. New Coke.

9. R.J. Reynolds Premier cigarette.

10. Nutrasweets Simplesse fat substitute.

11. Internet retailing business model

Ten World-Class Product Failures



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Do

llars

TimeLoss0

Profit

Sales Volume

INTRODUCTION GROWTH MATURITY DECLINE

Fig. 9-2 - The Product Life Cycle

The aggregate demand for all brandscomprising a product category over time.



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Part a - Extended

introduction stage

Part b - Fad

Part c - Indefinite

maturity stage

Time in years Time in years

Time in years

Aggrega

t

e

sa

les

Aggre

ga

t

esale

s

Fig. 9-3 - Product Life Cycle Variations

Time in years Time in years



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Life Cycle Management

How to stay in the maturity stage a longtime.

Two basic strategies

> Find new customers

> Increase the frequency and variety of

product usage by current customers

Two basic tactics> Promote new uses for the product

> Introduce new forms of the product



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1. Cutting Edge:Technology development that isahead of the marketplace.

2. State of the Art:Adapting cutting-edge

techniques to market needs.3.Advanced:Increased competition and a less

sophisticated customer base.

4. Mainstream:Market is fully developed with

standardized products.5. Mature:Competition shifts to customer service.

6. Decline:Other technologies replace the dyingtechnology.

Life Cycles in Technological Markets

A technological life cycle (TLC) has six phases:


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Adopter Categories

Researchers have identified five categoriesof individual adopters for new products:> Innovators 3% of the market.

> Early adopters 13% of the market.

> Early majority 34% of the market.> Late majority 34% of the market.

> Laggards 16% of the market.

In addition, some individuals (non-adopters)

never accept the innovation. Diffusion: The process by which an

innovation is spread through a social systemover time.


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McGraw Hill/Irwin C i ht 2001 b Th M G Hill C i I All i ht d

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Five product characteristics affect the adoption rate fornewespecially truly innovativeproducts.

Example: A new, safer baseball for youngsters:

> 1. Relative advantagesuperior to current balls in

terms of safety?

> 2. Compatibilitycoincides with cultural values and

experiences of parents and coaches?

> 3. Complexityno problem understanding concept?

> 4. Trialabilityball can be easily tested?

> 5. Observabilitycan see affects on youngsters hit

with the new ball?

Factors Affecting theAdoption/Diffusion Rate

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