Introduction to Product
Decisions
Preview
• Product and the major classifications of products
and services
• Decisions companies make about each product
and service, product lines, and product mixes
• Branding strategy–the decisions firms make in
building and managing their brands
• Four characteristics that affect the marketing of a
service and the additional marketing
considerations that services require
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What is a Product?
Anything that can be offered to a market for
attention, acquisition, use, or consumption and that
might satisfy a want or need
• Includes physical objects, services, events, persons,
places, organizations, ideas, or some combination
thereof
• Tangible goods and services are products
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What is a Service?
Form of product that consists of activities, benefits,
or satisfactions offered for sale that are essentially
intangible and do not result in the ownership of
anything
• Examples include banking, hotels, airlines, tax
preparation, home repair service
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Market Offerings
• Continuum ranges from pure tangible goods
(with no services) to pure services (with no good
component) with many combinations in between
• Pure good: Camay soap
• Pure service: Legal representation
• Combination: Restaurant meal
• Creating and managing customer experiences
differentiates offerings
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Levels of a Product
• Core benefit
• What the consumer is really buying
• Actual product
• Includes the brand name, features, design,
packaging, quality level
• Augmented product
• Additional services and benefits such as delivery and
credit, instructions, installation, warranty, service
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Consumer Products
• Products and services bought by final
consumers for personal consumption
• Classified by how consumers buy them
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Convenience
Shopping
Specialty
Unsought
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Convenience Product
• Purchased frequently and immediately when
needed
• Low priced
• Mass produced and advertised
• Many purchase locations
• Examples include candy, soda, sports newspapers
and magazines
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Shopping Product
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Bought less frequently
Higher price
Fewer purchase locations
Comparison shopping advisable given range of
consumer needs and wants
• Examples include furniture, clothing, cars,
appliances, sports and exercise equipment
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Specialty Product
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Special purchase efforts
High price
Unique characteristics
Brand identification
Few purchase locations
• Example include Rolex watch, Ping golf clubs, Izod
sport shirt, Nike Air Jordan, Titleist Pro v1
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Unsought Product
• New innovations
• PC when first introduced
• Products consumers do not want to think about
• Examples include life insurance and cemetery plots
• Require much advertising and personal selling
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Product Decisions
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Product attributes
Branding
Packaging
Labeling
Product support services
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Product Attributes
• Product quality
• Performance quality—ability to perform functions
• Conformance quality—freedom from defects and
consistency
• Features
• Mix depends on value to consumer and cost to
company
• Style and design
• Influences experience (e.g., ergonomics)
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Branding
• Brand is a name, term, sign, symbol, or design,
or a combination of these, that identifies the
maker or seller of a product or service
• Ries and Trout (in Positioning: The Battle for
Your Mind) argue that information overload
means consumers can only remember first
brand in a market position
• e.g., Miller Lite first beer positioned as light
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Branding (cont.)
• Advantages to buyers
• Identifies product with known features and quality
• Even commodities branded
• e.g., Dole, Chiquita
• Advantages to sellers
• Basis for product’s quality story
• Brand X golf balls—long distance and great feel
• Provides legal protection for unique features
• Helps segment markets
• e.g., Toyota vs. Lexus
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Packaging
• Designing and producing the container or
wrapper for a product
• e.g., golf ball sleeve, tennis ball can
• Developing a good package
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Reinforce brand message (marketing)
Protect contents (consistency)
Ensure product safety (leakage, spoilage)
Address environmental concerns (disposal)
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Labeling
• Printed information appearing on or with the
package
• Performs several functions
• Identifies product or brand
• Describes several things about the product
• Promotes the product through attractive graphics
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Product Support Services
• Assess the value of current services and obtain
ideas for new services
• Assess the cost of providing the services
• Put together a package of services that delights
the customers and yields profits for the company
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Product Line Decisions
• Product line length
• Number of items in a product line
• Adjust line length by
• Stretching
• Downward
• Upward
• Both directions
• Filling
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Product Mix Decisions
• Product mix
• All product lines and items that a seller offers for sale
• Product mix dimensions include
• Length: number of items in a line
• Width: number of different product lines the company
carries
• Depth: number of versions offered of each product in the
line
• Consistency: closeness of various lines
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Brand Equity
• Positive differential effect that knowing the brand
name has on customer response to the product
or service
• Provides
• More brand awareness and loyalty
• Basis for strong, profitable customer relationships
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Major Brand Strategy Decisions
Brands are assets that must be carefully developed
and managed via
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Brand positioning
Brand name selections
Brand sponsorship
Brand development
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Brand Positioning
Can position brands at any of three levels
• Product attributes (lowest)
• Product benefits
• Beliefs and values (highest)
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Desirable Qualities for a Brand
Name
• Should suggest product’s benefits and qualities
• Should be easy to pronounce, recognize, and
remember
• Should be distinctive
• Should be extendable
• Should translate easily into foreign languages
• Should be capable of registration and legal
protection
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Brand Sponsorship
• Manufacturer’s brands
• Also called national brands
• Private brands
• Also called store or distributor brands
• Licensed brands
• Co-branding
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Brand Development
• Line extension
• Introduction of additional items in a given product
category under the same brand name (e.g., new
flavors, forms, colors, ingredients, or package sizes).
• Brand extension
• Using a successful brand name to launch a new or
modified product in a new category
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Brand Development
• Multibranding
• Offers way to establish different features and appeal
to different buying motives
• New brands
• Developed based on belief that the power of its
existing brand is waning and a new brand name is
needed
• Also used for products in new product category
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Nature and Characteristics
of a Service
• Intangibility
• Services cannot be seen, tasted, felt, heard, or smelled
before purchase
• Inseparability
• Services cannot be separated from their providers
• Variability
• Quality of services depends on who provides them and when,
where, and how they are delivered
• Perishability
• Services cannot be stored for later sale or use
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Major Service Marketing Tasks
• Managing service differentiation
• Develop a differentiated offer, delivery, and image
• Managing service quality
• Be customer obsessed, set high service quality
standards, have good service recovery, empower frontline employees
• Managing service productivity
• Train current employees or hire new ones, increase
quantity and sacrifice quality, harness technology
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Recap—What was Covered?
• Product and the major classifications of products
and services
• Decisions companies make about each product
and service, product lines, and product mixes
• Branding strategy–the decisions firms make in
building and managing their brands
• Four characteristics that affect the marketing of a
service and the additional marketing
considerations that services require
30