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Designing and ManagingProducts

Mrs. Jocel D. Ripdos,MBA

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Product and Its Classification

Objectives:

Design your own product.

Define the term product. Determine the different classification

of product by giving examples each.

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Product?

A physical object

A service

A place

An organization

An idea like pro-life or the

preservation of the ozone layer

A personality

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Product define:

A product is anything offered forsale by a firm to buyers to satisfy their

physical, social, symbolic, and

psychological wants and needs

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Classification of Products

Consumer goodsRate of consumption and tangibility

Consumers shopping habits

Industrial goodsInstallations

Accessory equipment

Raw materialsComponent parts and materials

Supplies

Services

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Consumer Goods

Rate of Consumption andTangibility

Durable goods are tangible goods

which normally survive many uses.Nondurable goods are tangible

products which are consumed in one or a

few users.

Services are intangible goods like

activities, benefits, or satisfactions which

are offered for sale

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Consumer Goods

Consumers Shopping HabitsConvenience goods are those which are

purchased with a minimum of effort.

Shopping goods are those that are bought onlyafter an effort to compare with other goods ismade.Specialty goods are those that the consumers

seek to buy and they are not willing or they are notable to accept substitutes.

Unsought goods are those that are not yetwanted by or are still unknown to the consumer.New unsought goods are really new ideas or products

that the consumer still have to know to be motivated tobuy.

Regular unsought goods are those that stayunsought but not unbought forever.

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Industrial Goods

Installations are industrial productswith long life, are generally expensive,

and they form part of the major capital

equipment of an industrial firm. Accessory Equipment are

industrial goods that are used as aids

in the production process. Raw Materials - are unprocessed

goods that will become part of another

product.

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Industrial Goods

Component Parts and Materialsare processed industrial goods that

will still be used and become an actual

part of the finished product. Supplies are items that are used as

aids in the operating process but do

not become part of the finished goods. Services are expense items that

assist in the operations.

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Quiz: 1/4

Identification:

1. These are tangible goods which normallysurvive many uses.

2. These are industrial products with long life, are

generally expensive, and they form part of themajor capital equipment of an industrial firm.

3. These are processed industrial goods that willstill be used and become an actual part of thefinished product.

4. These are items that are used as aids in theoperating process but do not become part ofthe finished goods.

5. These are unprocessed goods that will becomepart of another product.

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Enumeration

A. Industrial goods (6 pts.)

B. Consumer goods - Consumers

Shopping Habits (4 pts.)

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AnswersIdentification:

1. Durable goods

2. Installations

3. Component Partsand Materials

4. Supplies5. Raw materials

Enumeration

A 1.Installations2. Accessoryequipment

3. Raw materials

4. Component parts

and materials5. Supplies

6. Services

B. 1. Convenience

goods2. Shopping goods

3. Specialty goods

4. Unsought goods

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Quiz: 1 whole

How are you going to differentiate

your product?

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Tools in Product

Differentiation Branding Quality

Image

Product features Packaging

Location

Promotion Innovation

Different service levels

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Branding

- a marketing action which identifies and helpsdifferentiate the goods and services of one seller from

those of another.

Brand is a name, term, sign, symbol, or design, ora combination of these elements, that is intended to

identify the goods or services of one seller or a group

of sellers.

a. Legally registered are provided with legalprotection called trademark.

b. Not legally registered

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Distinct Parts:

1. Brand Name refers to that part of

a brand consisting of words, letters,

and/or numbers that can bevocalized.

2. Brand Mark refers to that part of a

brand that appears in the form of asymbol, design, or distinctive

coloring or lettering, and which

cannot be vocalized.

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Criteria for a Good Brand

1. It should suggest something about theproducts benefits and qualities.

2. It should easy to pronounce, recognize,spell, and remember.

3. It should be distinctive.4. It must be adaptable to additional

product lines.5. It must be capable of being legally

registered. Names that sound like analready registered name is no longeracceptable for copyright registration.

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Branding Strategies

Manufacturing branding

Reseller branding

Mixed branding

Generic branding

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Manufacturing Branding

- Is a branding strategy in which the brandname for a product is designated by the

manufacturer.

Alternative Approaches:1. Multiproduct approach referred to as

blanket or family branding strategy, uses

the same brand name to cover a group of

products.2. Multibrand approach requires a firm to

provide each product with a distinctive

name.

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Reseller Branding

- referred to as private labeling orprivate branding, refers to the

branding strategy of a firm which

manufactures products but sell themunder the brand name of a reseller.

- an advantage is the shifting of

promotional costs from manufacturerto reseller.

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Mixed Branding

- refers to the use of themanufacturer and reseller brands in a

product.

- it is expected that marketsegments attracted to the

manufacturer and to the seller will

patronize the mixed branded product.

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Generic Branding

- is a branding strategy which listsno product name, only a description of

contents

- this approach is applicable to rice,salt, sugar, and charcoal.

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Packaging

- refers to all activities involved indesigning and producing the container

or wrapper for a product.

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Reasons for Packaging

1. It provides protection to productsbefore and after they are in the

possession of the intended users.

2. It provides convenience to theuser.

3. It provides safety.

4. It provides economy to both theseller and the user.

5. It allows sellers to effectively

promote the product.

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Labelling

- it provides information about theproduct and the manufacturer.

- it may be a part of the package, or atag attached to the product.

Types of Label

1. Brand label

2. Descriptive label3. Grade level

4. Promotional label

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Product Warranty- a warrantyis a statement explaining what the seller

promises about the product.- it is a manufacturers written promise as to the extent

of the repair, replacement, or otherwise compensation fordefective goods.

Variations of Warranty1. Express warrantiesare manufacturers written

statement for product deficiencies.a. Limited-coverage warrantyis a manufacturers statement

indicating the bounds of coverage and noncoverage of anydeficiency found in the product.

b. Full warranty a statement of liability by a manufacturer thathas no limits of noncoverage.

2. Implied warranties an assign responsibility forproduct deficiencies to a manufacturer even if the itemwas sold by a retailer.

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Product Life Cycle

- the period between the birth and thedeath of a product.

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Introduction Stage

Characteristics:

Slow growth of sales

Heavy promotional expenditures in

relation to sales

Relatively high prices for the products

Limited product offerings, like limited

variations in sizes, color, and the like.

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Growth Stage

Characteristics:

Sales start climbing rapidly.

The ratio of promotional expenditures

to sales decreases.

Prices tend to remain high except

when demand stimulation is required

and entry of competitors isdiscouraged.

New forms of the product appear, like

new colors, new models, and new

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Maturity Stage

Characteristics:

Sales settle down as the product

becomes well-known

Price reductions are used as a tool ofcompetition

Competition is intensified

The market becomes saturated

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Decline Stage

Characteristics:

A pruning of product models and

variations to eliminate those not

producing profit. Promotional expenses are reduced

Plans for phasing out the product is

made

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Quiz: (20 pts.)Identification:

1. The period between the birth and the death of a product.2. Is a branding strategy of a firm which manufactures products

but sell them under the brand name of a reseller.

3. A statement explaining what the seller promises about theproduct.

4. A marketing action which identifies and helps differentiate thegoods and services of one seller from those of another.

5. Is a branding strategy which lists no product name, only adescription of contents.

6. It refers to that part of a brand consisting of words, letters,and/or numbers that can be vocalized.

7. Is a branding strategy in which the brand name for a productis designated by the manufacturer.

8. It may be a part of the package, or a tag attached to theproduct.

9. It refers to all activities involved in designing and producingthe container or wrapper for a product.

10. It refers to the use of the manufacturer and reseller brands ina roduct.

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Illustration: (10 pts.)

Draw and label the product life cycle.

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AnswersIdentification1. Product life cycle2. Reseller branding3. Warranty

4. Branding5. Generic branding6. Brand name7. Manufacturing branding

8. Labelling9. Packaging10. Mixed branding