Markateng Management Setting Product Strategy Chapter12 buerano

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Setting Product Strategy

Chapter 12

The 4iApproach

In Action

Karla Kristine F. Buerano

Ateneo School of Medicine and Public Health


Outline

• Characteristics of products • How to differentiate• Importance of product design• Management of product mix and

product lines• Combining Products• Packaging as a marketing tool


Concept 1

Product characteristics and classification

Core Benefit - Kotler: Hotel – rest Local: Beach – relaxation Medical: Hospital - cure

Product• Anything

that can be offered to a market to satisfy a want or need

Core Benefit

Basic Product

Expected Product

Augmented Product

Potential Product


Consumer goods: Staples goods

Kotler: Ritz crackers

Local: Skyflakes

RP medical application:Decolgen


Concept 3

Services Differentiation (p.330)

Kotler: Rolls-Royce PLC – aircraft engines

Local: LBC – easier accessibility

RP medical application:Medical City – focused on patient partnership


Concept 4

Design – potent way to differentiate and position a company’s product (p.332)

Kotler: Whirlpool

Local: Mandaue Foam

RP medical application: Primary Care – affordable and quality health services


Concept 5

Service Differentiation: Customer Training (p.331)

Kotler: McDonald’s – training

Local: Mang Inasal

RP medical application:Basic Life Support Training


Concept 6

Service Differentiation: Maintenance and Repair (p.354)

Kotler: HP

Local: Abenson

RP medical application: Consultations with doctor post-surgery


Concept 7

Product Systems and Mixes (p.336)

Kotler: Michelin: tires, maps, restaurant-rating

Local: PLDT: wifi, phoneline, video monitoring

RP medical application:Parañaque Doctors: diagnostics, surgery, OPD


Concept 8

Down Market Stretch (p.340)

Kotler: Kodak – Kodak Funtime

Local: Coke Phils. – RC Cola

RP medical application:Primary Care – Clinic ng Bayan


Concept 9

Captive-Product Pricing (p.343)

Kotler: AT&T with free cellular phonesLocal: Globe with free cellular phones with

a 2 year planRP medical applications: Clinic ng bayan’s health card with free

consultations exclusive of diagnostics


Concept 10

Co-branding (p.344)

Kotler: Apple, IBM, and MotorolaLocal: Red Ribbon, Chowking, JollibeeRP medical applications:• Paranaque Doctors and Metro South

Hospital



Karla Kristine F. Buerano



Karla Kristine F. Buerano Chapter 12MD 12-0130


Outline

• Characteristics of products • How to differentiate• Importance of product design• Management of product mix and

product lines• Combining Products• Packaging as a marketing tool


Product characteristics and classifications

Product• Anything that

can be offered to a market to satisfy a want or need

Core Benefit

Basic Product

Expected Product

Augmented Product

Potential Product


Product Classifications

– Durability– Tangibility– Use: Consumer goods and Industrial

goods


Consumer Goods and Industrial Goods

• Consumer– Convenience goods: Staples, impulse goods, emergency

goods– Shopping goods– Specialty goods– Unsought goods

• Industrial– Materials and parts– Capital items– Supplies– Business services


PRODUCT AND SERVICES DIFFERENTIATION


Product

• Form – size, shape, and physical structure• Feature • Customization• Performance Quality – low, average, high, or

superior• Durability – measure of expected operating life• Reliability – measure of probability a product

will not malfunction• Repairability – ease of fixing a product• Style – product’s look and feel to the buyer


Services

• Ordering ease• Delivery• Installation• Customer Training• Customer Consulting• Maintenance and Repair


DESIGN


Design

• Totality features that affect how a product looks, feels, and functions to a consumer

• Offers functional and aesthetic benefits

Focus on:

Form and feature development


PRODUCT AND BRAND RELATIONSHIPS


Product Hierarchy

• Levels– Need family – core need– Product family – satisfies a core need– Product class – “product category”– Product line – products with a similar function– Product type – group of products which share

several forms of the product– Item – distinguishable distinct product line


Product Systems and Mixes

• Product system – diverse but related items that function in a compatible manner

• Product Mix – set of all products and items offered for sale– Has various product lines– Four dimensions:

• Width – how many different product lines carried• Length – total number of items in the mix• Depth – numbers of variants of each product• Consistency – how closely related the product lines are


Product line analysis

• Need to know the sales and profits of each product line to determine which items to build, maintain, harvest, or divest.

• Need to know market profie (how line is positioned against competitor’s lines)– Product map – shows which competitors’ items are

competing against the company’s items

• Provides information on two key decision areas – product line length and product mix pricing


Product line length

• Line stretching– Down-Market Stretch

• Kotler example: P&G’s lower-priced brand – Charmin Basics• Local example:

– Up-Market Stretch• Kotler example: Toyota’s Lexus • Local example: Pizza hut -> Pizza Hut Bistro• Medical example: Clinic ng Bayan -> Primary Care

– Two-way Stretch


Product Mix Pricing

• Product line pricing• Optional-feature pricing• Captive-product pricing• Two-part pricing• By-product pricing• Product-bundling pricing


Co-branding and ingredient branding

• Co-branding• Ingredient branding


Packaging, Labeling, Warranties, and Guarantees

• Packaging – designing and producing the container for a product

• Labeling – identifies product or brand• Warranties and guarantees – formal

statements of expected product performance by manufacturer

Markateng Management Setting Product Strategy Chapter12 buerano

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