Student Powerpoint-CH 10

8/8/2019 Student Powerpoint-CH 10

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Lamb, Hair, McDaniel

CHAPTER 10

Product Concepts

2010-2011


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Define the term product

What Is a Product?What Is a Product?

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What Is a Product?

Everything, both favorableand unfavorable, that a

person receives in anexchange.

Tangible Good

Service

Idea

Product

Product

LO 1


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What Is a Product?

Product is the starting point of Marketing Mix

PromotionPromotion

Place (Distribution)Place (Distribution)

PricePrice

ProductProduct

LO 1


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Classify consumer products

Type s of Consum e r ProductsType s of Consum e r Products

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Type s of Products

B usinessProduct

Consumer

Product

A product used to manufacture other goods or services, to facilitate an

organizations operations, or to resellto other consumers.

A product bought to satisfy an

individuals personal needs or wants

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Type s of Consum e r Products

U nsoughtProductsU nsoughtProducts

SpecialtyProductsSpecialtyProducts

ShoppingProductsShoppingProducts

ConvenienceProducts

ConvenienceProducts

Consumer Products

Consumer Products

B usinessProductsB usinessProducts

ProductsProducts

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Type s of Consum e r Products

Market

DevelopmentDiversification

Increase market share amongexisting customers

Attract new customers toexisting products

Introduce new productsinto new markets

Create new products for present markets

ConvenienceProduct

ShoppingProduct

SpecialtyProduct

U nsoughtProduct

A relatively inexpensive item thatmerits little shopping effort

A product that requires comparisonshopping, because it is usually moreexpensive and found in fewer stores

A particular item for whichconsumers search extensively and

are reluctant to accept substitutesA product unknown to the potentialbuyer or a known product that thebuyer does not actively seek

LO 2


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Define the terms product item , product line ,

and product mix

Product It e ms,Product It e ms,Lin e s, and Mix e sLin e s, and Mix e s

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Product It e ms,Lin e s, and Mix e s

Product Item

Product Line

Product Mix

A specific version of a productthat can be designated as adistinct offering among an

organizations products.

A group of closely-relatedproduct items.

All products that anorganization sells.

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Cam pbell sProduct Lin e s and Mix

{ }

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B e n e fits of Product Lin e s

Equivalent QualityEquivalent Quality

Efficient Sales andDistributionEfficient Sales andDistribution

StandardizedComponentsStandardizedComponents

Package U niformityPackage U niformity

Advertising EconomiesAdvertising Economies

LO 3


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A djustm e nts

Product

Modification

Product

Modification

Product

Repositioning

Product

Repositioning

Product LineExtension or Contraction

Product LineExtension or Contraction

Adjustments toProduct Items,

Lines, and Mixes

Adjustments toProduct Items,

Lines, and Mixes

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Type s of Product Modifications

Quality ModificationQuality Modification

Functional ModificationFunctional Modification

Style ModificationStyle Modification

Planned Obsolescence: T he practice of modifying products so those that havealready been sold become obsolete

before they actually need replacement.LO 3


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R ep ositioning

Changing

Demographics

Changing

DemographicsDeclining SalesDeclining Sales

Changes inSocial

Environment

Changes inSocial

Environment

Why repositionWhy repositionestablis h ed brands? establis h ed brands?

Why repositionWhy repositionestablis h ed brands? establis h ed brands?

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Product Lin e Ext e nsion A

dding additional products to an existing productline in order to compete more broadly in theindustry.

S y m p toms of Ov e r e xt e nsionSome products have low sales or cannibalize sales of other items

Resources are disproportionately allocatedto slow-moving productsItems have become obsolete because of new product entries

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Describe marketinguses of branding

B randingB randing

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B randing

B randName

B randMark

B randEquity

That part of a brand that can be spoken,including letters, words, and numbers

The elements of a brand thatcannot be spoken

The value of company and brand names

GlobalB rand

A brand where at least 20 percent of theproduct is sold outside its home country

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B e n e fits of B randing

ProductIdentification

Repeat Sales

New ProductSales

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T o p Te n G lo b a l B rands

LO 4

1. Coca-Cola U .S.

2. IB M U .S.

3. Microsoft U .S.

4 . GE U .S.5 . Nokia Finland6 . McDonalds U .S.7 . Google U .S.8 . Toyota Japan9 . Intel U .S.

10. Disney U .S.

Source: Burt Helm, "Best Global Brands,"BusinessWeek September 2 8 , 200 9


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B randing Strat e gi e s

B rand No B rand

ManufacturersB rand Private

B rand

IndividualB rand

FamilyB rand

Combi-nation

IndividualB rand

FamilyB rand

Combi-nation

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B randing Strat e gi e s

ManufacturersB rand

PrivateB rand

The brand name of amanufacturer.

A brand name owned by awholesaler or a retailer. Alsoknown as a private label or

store brand.

Captive

A brand manufactured by a thirdparty for exclusive retailer,without evidence of a thatretailers affiliation

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A dvantag e s of Manufactur e rs B rands

Heavy consumer ads by manufacturers

A ttract new customers

Enhance dealers prestige

Rapid delivery, carry less inventory

If dealer carries poor quality brand,customer may simply switch brands andremain loyal to dealer

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A dvantag e s of Privat e B rands

Earn higher profits on own brand

Less pressure to mark down price

Manufacturer can become a directcompetitor or drop a brand/reseller

Ties customer to wholesaler or retailer

Wholesalers and retailers have no controlover the intensity of distribution of manufacturers brands

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A dvantag e s

of Ca p tiv e B

randsNo evidence of stores affiliationSold exclusively at the chainCan ask price similar tomanufacturers brands

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Individua l B rands V e rsusFami ly B rands

Individual

B rand

Family

B rand

U sing different brand names

for different products.

Marketing several differentproducts under the samebrand name.

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Co b randing

IngredientB randingIngredientB randing

CooperativeB randing

CooperativeB randing

ComplementaryB randing

ComplementaryB randing

T y pes of T y pes of Cobranding Cobranding

http://www.bose.com

OnlineLO 4


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Marketing U ses of Branding

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Describe marketinguses of packaging

and labeling

PackagingPackaging

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Functions of Packaging

Contain and Protect

Promote

Facilitate Storage, U se,and Convenience

Facilitate Recyclinghttp://www.levesquedesign.com/http://www.design4packaging.com

Online

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La bel ing

Online

http://www.fda.gov

Persuasive

Focuses onpromotionaltheme

Consumer information issecondary

Informational

Helps make proper selections

Lowers cognitivedissonance

Includes use/care

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U niv e rsa l Product Cod e s

U niversalProduct Codes

(U PCs)

A series of thick and thin

vertical lines (bar codes),readable by computerizedoptical scanners, thatrepresent numbers used to

track products.

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Describe howand why product

warranties areimportant

marketing tools

Product Warranti e sProduct Warranti e s

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Product Warranti e s

W arranty

ExpressW arranty

ImpliedW arranty

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

A written guarantee.

An unwritten guarantee that the good or

service is fit for the purpose for which itwas sold. ( U CC)

LO 7

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