Chapter 10Product Concepts

What is a Product?A bundle of benefitsWhat the buyer gets…

not what the seller sells

Tangible items, services, ideas

Three Types of Consumer Products:Three Types of Consumer Products:

ServicesServices Nondurable Nondurable goodsgoods

Durable Durable goodsgoods

GoodGood ServiceServiceGood/serviceGood/service

Restaurant’sRestaurant’sofferingoffering

EmploymentEmploymentagency serviceagency service

ShovelShovel

ConvenienceConvenienceproductsproducts

ShoppingShoppingproductsproducts

SpecialtySpecialtyproductsproducts

Convenience ProductsInexpensivePurchased regularlyEasily accessible

Shopping ProductsMake comparisonsShop aroundNot purchased

frequently

Specialty ProductsUsually expensiveSpecial effort to

purchase

Unsought GoodsA product that the

customer doesn’t know about and/or does not actively seek

Three typesThree types::

CapitalCapitalProductsProducts

ProductionProductionProductsProducts

OperatingOperatingProductsProducts

Product Line and MixProduct item: A specific version of the product

Product line: group of products that are fairly closely related

Product Mix: All the product offerings of an organization, no matter how unrelated

Benefits of Product LinesAdvertising

EconomiesPackage UniformityStandardized

ComponentsEfficient Sales and

DistributionPerceptions of

Equivalent Quality

Dimensions of the Product Mix

Breadth or widthDepth or length

Adjustments

Product Modification

Product Modification

ProductRepositioning

ProductRepositioning

Product LineExtension or Contraction

Product LineExtension or Contraction

Adjustments to Product Items,

Lines, and Mixes

Adjustments to Product Items,

Lines, and Mixes

Types of Product Modifications

Quality ModificationQuality Modification

Functional ModificationFunctional Modification

Style ModificationStyle Modification

Planned Obsolescence

PlannedObsolescence

PlannedObsolescence

The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.

Expanding the Product LineProduct Line Extension: An item added to the

existing product lineProduct Category Extension: A new item or

line of items for a companyBrand Extension: Product category extension

that uses an existing brand name

BrandingBrand nameBrand markLogoTrademarkService Mark

Brand EquityValue associated with a brand

CrayolaHarley-DavidsonDisney

Standardization Adaptation

Globalization Strategy

CustomizationStrategy

Brand Name and Brand MarksBrand name: verbal part of the brandBrand mark: unique symbol that is part of the

brandLogo: brand name or company name written

in a distinctive way

What makes a good brand name?A good brand name:

Is easy to pronounceHas mnemonic qualitySuggests a positive imageReinforces product concept

Communicates product benefitsSays something about the userAvoids linguistic traps

Generic BrandsCarries neither a

manufacturer nor a distributor brandPlain packagingStark letteringMILK

Manufacturer and Distributor BrandsManufacturer brand: owned by the maker of

the productWorld (global) brand: distributed and

recognized around the worldPrivate label/Distributor brand: owned by a

retailer or wholesaler

Family BrandsThe same brand name is used in different

categories of products

Individual BrandExample: Mar’s

candiesExample:P & G’s

laundry detergents

Co-BrandingUse of two brands on a single product

Kleenix Mentholatum

Mentholatum scentedKleenix

Trademarks and Service MarksTrademark: legally protected brand name or

brand mark for goodsService mark: symbol that identifies services

Functions of PackagingContain productProtects productFacilitates storage and use of productPromotes productRecycling issues

LabelingLabel: Paper or plastic sticker attached to a

container to carry product informationUPC (universal product code): permits

computerization of checkout and compilation of sales and inventory information