Chapter 9Product Concepts

What’s a Product?Good

Service

IdeaExperienceCredence

PromotionPromotion

Place Place (Distribution)(Distribution)

PricePrice

Product Product

Product is the starting point ofMarketing Mix

Product-Service Continuum

Soap

Auto with repair

servicesRestaur

ant

Airline trip with snacks

Doctor’s exam

The Product-Service Continuum

Brandname

Packaging

Design

Style

Delivery& credit

Installation

Warranty

After-sale

service

Coregood orservice

Coregood orservice

2. Actual Product2. Actual Product

1. Core productWhat the consumer is

really buying

1. Core productWhat the consumer is

really buying

3. Augmented ProductAdditional services &benefits (unexpected)

3. Augmented ProductAdditional services &benefits (unexpected)

Product is a bundle of benefits

Types of ProductsConsumer, BusinessConsumer productsDetermined by how consumers behave

when buying an item.1. Convenience2. Shopping3. Specialty4. Unsought

Consumer Products Convenience –frequently purchased

Grocery productsStaplesEmergency items

MM: Margins:

Consumer Products Shopping (less frequent)

Homogeneous vs. Heterogeneous

MM:Margins:

Consumer ProductsSpecialty – special purchase effort

Principle of scarcity / uniqueness

MM:Margins:

Consumer ProductsUnsought

MM:Margins:

Product Line & Product MixProduct ItemProduct LineProduct MixWidthDepth

Product mix is also known as product assortment

Item

LAMPS: LAMPS: •TableTable•CeilingCeiling•TrackTrack•DeskDesk

Product Line

Equivalent QualityEquivalent Quality

Efficient Sales andDistribution

Efficient Sales andDistribution

Standardized Components

Standardized Components

Package UniformityPackage Uniformity

Advertising EconomiesAdvertising Economies

Benefits of Product Lines

Product Product Line 1Line 1

Product Product Line 2Line 2

Product Product Line 3Line 3

TABLES:TABLES:•KitchenKitchen•Dining RoomDining Room•EndEnd•CoffeeCoffee•OutdoorOutdoor•ConferenceConference•ComputerComputer

CHAIRS:CHAIRS:•Dining RoomDining Room•Living RoomLiving Room•Bed RoomBed Room•OutdoorOutdoor•DeskDesk

LAMPS: LAMPS: •TableTable•CeilingCeiling•TrackTrack•DeskDesk

Product Mix

Product Product Line 1Line 1

Product Product Line 2Line 2

Product Product Line 3Line 3

TABLES:TABLES:•KitchenKitchen•Dining RoomDining Room•EndEnd•CoffeeCoffee•OutdoorOutdoor•ConferenceConference•ComputerComputer

CHAIRS:CHAIRS:•Dining RoomDining Room•Living RoomLiving Room•Bed RoomBed Room•OutdoorOutdoor•DeskDesk

LAMPS: LAMPS: •TableTable•CeilingCeiling•TrackTrack•DeskDesk

Product Depth

Attracts buyers with different preferences; market segmentation

Product Product Line 1Line 1

Product Product Line 2Line 2

Product Product Line 3Line 3

TABLES:TABLES:•KitchenKitchen•Dining RoomDining Room•EndEnd•CoffeeCoffee•OutdoorOutdoor•ConferenceConference•ComputerComputer

CHAIRS:CHAIRS:•Dining RoomDining Room•Living RoomLiving Room•Bed RoomBed Room•OutdoorOutdoor•DeskDesk

LAMPS: LAMPS: •TableTable•CeilingCeiling•TrackTrack•DeskDesk

Product Width

Diversifies risk; Capitalizes on established reputations

Campbell’s Product Lines and Mix

Adjustments to Product Lines, Items and Mixes

Product Modification

Product Modification

ProductRepositioning

ProductRepositioning

Product LineExtension or Contraction

Product LineExtension or Contraction

AdjustmentsAdjustments

Planned Obsolescence

The practice of modifying products

so those that have already been sold

become obsolete before they

actually need replacement.

Product Line Extension

Adding additional products to an

existing product line in order to

compete more broadly in the

industry.

LINE EXTENSIONS

What images do these brand names evoke?

Mercedes – Benz: Harley Davidson:Apple:PC jr.:Smart & Final:Listerine:Marlboro:Calvin Klein:

Name the major brands: Oatmeal: Dog food:Beer:Running Shoes:Tuna:Bananas:Lobsters:Peaches:

BrandName, term, sign, symbol, design, or some

combination that identifies the products of a firm.

Brand name - part of a brand that can be spoken (examples of brands with no names?)

Brand mark - symbolic

WHAT AM I?

Branding Terms

Trademark – legal designation of the exclusive use of brand

Trade Name – Commercial, legal name

WHAT AM I?

Value of BrandingTo Buyers

Quality assuranceRewards / Risks

To SellersLoyalty

Price premiumsResistance to competition

Brand EquityThe value of the brand name!

Types of Brands

Manufacturer BrandsPrivate OR Retailer OR Store OR

Reseller Brands Generic Brands

Battle of the Brands

“Genericide”AspirinCellophaneCorn flakesGranolaKeroseneLinoleumRaisin branShredded wheatThermosZipper

Individual Brand

Family Brand

Using different brand names for different products from the same company

Marketing several different products under the same brand name.

Individual Brands Versus Family Brands

Cobranding

IngredientBranding

IngredientBranding

Cooperative Branding

Cooperative Branding

Complementary Branding

Complementary Branding

Types of Types of CobrandingCobranding

BRAND EXTENSIONS

PackagingPackaging Functions

Protect and Maintain Functional Form

Offer Convenience

Marketing

UPC

Labeling

Persuasive Focuses on

promotional theme

Consumer information is secondary

Informational

Helps make proper selections

Lowers cognitive dissonance

Warranty

ExpressWarranty

Implied Warranty

A confirmation of the quality or performance of a good or service.

A written guarantee.

An unwritten guarantee

Product Warranties