Chapter 8

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Part 3: The marketing mix
Chapter 8: Product planning
Step 5: Design the marketing strategy
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
8–1
When we finish this lecture you should
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Understand the meaning of the term ‘product’
Appreciate the differences between goods and services
Recognise the differences between the various consumer and
business product classes
Understand how product classes can assist a marketing
manager in planning marketing strategies
Understand the concept of branding and how it is used in
strategy planning
Understand the importance of packaging and warranties in
strategy planning
Know more about the international aspects of product
planning
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
8–2
Product defined
• Product
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Need-satisfying offerings of an organisation
• Product attributes
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Features or characteristics of a product or service
• Product quality
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The ability of a product to satisfy a customer’s needs or
requirements
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
8–3
Figure 8.1 Strategy planning for products
Target Market
Brand
Manufacturer
or intermediary
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Figure 8.2 Examples of possible blends of
physical goods and services in a product
Steel Pipe
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Figure 8.3 The four characteristics of services and
their implications for marketing
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Product mix and product lines
• Product assortment or product mix
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The set of all product lines and individual products that a
company sells
• Product line
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A set of individual products that are closely related
• Individual product
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A particular item within a product line
A ‘stock keeping unit’
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Product classes
• Two broad product classes
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Consumer products
Business products
• Product classes help in developing new marketing
mixes and evaluating present mixes
• Product classes are based on how the customer
views the product
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How consumers think about and shop for products
How business/organisational buyers think about products
and how these products will be used
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Figure 8.4 Product classes
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Figure 8.5 Consumer product classes and
marketing mix planning
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
8–10
International variations
• It is important to keep in mind that consumer
attitudes in different countries vary significantly
• A shopping product in Australia/New Zealand might
be a specialty product in other countries
• ‘A convenient place to shop’ means different things
in different countries
• It’s important to consider products from the target
customer’s view, not from the marketer’s view
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Business product classes
• Tax treatment
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Capital item
Expense item
• Derived demand
• Inelastic demand faced by whole industry
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Figure 8.6 Business product classes and
marketing mix planning
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Branding defined
• Branding
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The use of a name, term, symbol or design, or a
combination of these, to identify a product
• Brand name
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A word, letters, and/or numbers that can be vocalised
• Trademark or brand mark
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Those words, symbols or marks that are legally registered
for use by a single company
• Service mark
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Those words, symbols or marks that are legally registered
for use by a single company to refer to a service offering
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Conditions favourable to branding
• Product is easy to identify by brand
• Consistent quality can be maintained
• Widespread availability is possible
• Demand for the product class is large
• Price can be high enough to support branding
• Economies of scale are possible
• Favourable shelf locations can be obtained
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Levels of brand familiarity
• Brand rejection (unfavourable)
• Brand non-recognition
• Brand recognition
• Brand preference
• Brand insistence (favourable)
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Selecting the right brand name
Figure 8.8 Characteristics of a good brand name
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Brand equity and protecting brand
names and trademarks
• Brand equity
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The value, to a company, of a brand’s overall position in
the market
• Protecting brand names and trademarks
– The Trade Marks Act 1955 (Cwlth) (Australia)
– The Trade Marks Act 1953 (New Zealand)
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Common law protection
Trade Practices Act (Australia)
Fair Trading Act (New Zealand)
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Types of brands and manufacturer
brands versus private labels
• What kinds of brands to use
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Family brands
Licensed brands
Individual brands
Generic products
• Who does the branding
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Manufacturer brands
Private labels/house brands
• The battle of the brands
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Figure 8.9 Examples of alternative brand
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Packaging
• Opportunity to promote the product
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At the point of purchase
Links product to earlier promotion
At the point of consumption
• Opportunity to protect the product
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Reduce costs of shipping and storing
Reduce theft, spoiling and so on
• Improve the basic product
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Easier to use, more convenient
Appeal to new target markets
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Product warranties
• Warranty—What the seller promises about its
product
• Covered by both common and statutory laws
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Goods sold must be of merchantable quality and fit for
their purpose
• Implied warranties
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Go with the product and cannot be excluded, restricted or
modified
• Written (or expressed warranty)
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Additional warranty offered that is over and above what is
required by law
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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What we will be doing in the next
chapter
• In the following chapter we will be discussing
product management and new-product
development, including
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Product life cycles
The new-product development process
Product adoption by consumers
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