Marketing Management
Chapter 8
Product Concepts
Product-Introduction
z The customer never buys a product buy only a bundle of satisfaction
z Product represents anticipated and even unanticipated solutions to customer’s
problems
z The product idea encompasses many attributes of a physical good or service,
installation, requirements and instructions
Product Definition
z A product may be defined as everything, both favorable and unfavorable, that one
receives in an exchange
z A product is anything that can be offered to a market for attention, acquisition, use or
consumption and that might satisfy a want or need
Product Level
z Five Levels
z Core benefit
z
Is the essential use-benefit, problem solving service that the buyer primarily buys
when purchasing a product
z Generic Product
z
Is the basic version of the product
z Expected Product
z
Is the set of attributes and conditions that the seller adds to distinguish the offer
from competitors
Product Level
z Augmented Product
z
Is additional services and benefits that the seller adds to distinguish the offer from
competitors
z Potential Product
z
It is the set of possible new features and services that might eventually be added to
the offer
Product Classification
z Consumer Products
z Business Products
Business Products
z Is used to manufacturer other goods or services, to facilitate and organization’s
operations, or to resell to other customers
z
Derived Demand
z
Inelastic industry demand
z
Tax treatments differ
Business Product Classes
z Installations
z Raw materials
z Professional services
z Accessories
z MRO supplies
z Raw materials
z Component parts and materials
Differences between goods and services
z Customers do not obtain ownership or services
z Service product are intangible performances
z Customers often actively involved in production process
z Other people may form part of product experience
z More variability in operational inputs and outputs
z Often difficult for customers to evaluate
z Absence of inventories after production
z Time factor is more important
Consumer Product Classes
z Convenience Products
z
Staples
z
Impulse products
z
Emergency products
z Shopping product
z
Homogeneous
z
Heterogeneous
z Specialty product
z Unsought products
z
New unsought products
z
Regular unsought products
Product Mix
z Is the set of all product lines and individual products that a firm sells. The more
dissimilar the product lines and individual products are, the wider the product
assortment
z Tata motor offers several lines of cars and trucks: Indica, Indigo, Sumo, S210 etc
Product Line
z Is a set of individual products that are closely related
z The may be related because they may be related because they are produced or operate
in similar way.
z Product lines can be organized by product function, customer group targeted, retail
outlets used, and price range
Product Item
z It is a specific version of a product that can be designated as a distinct offering among
and organizations products
z An individual product is a particular product within a product line
Benefits of Product Line
z Advertising economy
z Package uniformity
z Standardization of components
z Efficient sales and distribution management
z Easy evaluation of quality by customers
Product Width
z Refers to the number of product lines that and organization offers
z Firms increase product mix width to
z
Spread risk across multiple lines
z
Capitalize on established reputations
Product Line Depth
z Is the number of product lines in a product line
z Firms increase product line depth to
z
Attract buyers
z
Economies of scale
z
Sales and proffers
z
Even out seasonal sales patterns
Product modifications
z Involves changing one or more of a product’s characteristics
z
Quality modification
z
Functional modification
z
Style modification
Repositioning
z Involves changing customer’s perceptions of a product
z An entire line may be repositioned with a new name, packaging, and advertising to
revitalize sales
Product Line Extension
z Is the practice of adding products to an existing product line in order to complete more
broadly in the industry
z The danger of line extension is cannibalization of other product in the same line
Product Line Contraction
z May be undertaken if the line is overextended
z Symptoms of overextension include
z
Low sales
z
Slow moving products
z
Obsolescence
Branding
z Brand
z
Is a name , tem, sign, symbol , design or combination thereof that identifies a
seller’s products and differentiates them from competitor's products
z Branding
z
Means the use of a name, term, symbol, or design to identify a product.
z Brand Name
z
Is that part of the brand that can be spoken, including letters, words, and numbers
z
E.g. Ujala, Dettol, Ayush
z Trademark
z
Include only those words, symbols, or marks that are legally registered for use by a
single company
z Service mark
z
Is a trademark that refers to a service offering
Branding Objectives
z Identification
z Repeat sales
z Easy introduction of new product
z Widespread availability
z Economies of scale
z Better pricing
Manufacturer Brands
z Also called national brands
z Created owned by products
z Develop demand across many markets
Dealer Brands
z Also called private brands or store brands
z Created by middlemen
z Create higher margins for dealers
Brand Choices
z Family brand
z Licensed brand
z Generic brand
z Individual brand
Co-branding
z Placing two or more brand name on a product or its package
z Ingredient branding identifies the brand of a part that makes up the product
z Cooperative branding is where two brand receives equal treatment
z Complementary branding is where products are advertised or marketed together to
suggest usage
Packaging
z Is a container for protecting and promoting a product
z Packaging can enhance the product
z Packaging sends a message
z Packaging may lower distribution cost
z UPC codes speed handling
Product Quality and Customer Needs
z Product Quality
z
Means a product’s ability to satisfy a customer’s need or requirements.
z Customer have different needs and satisfaction of customers depend on fulfillment of
needs