12
©2013 Cengage Learning. All Rights Reserved.
o re n
pos
t eed Lteoa ra n p
u b .l i A
c l y a icgche tsss iRbel se e w
e b ds .i t M
e , yi n n
©
2
0
1
3
©2013 C
Ceng
ga
ag
g e L e a r n ii n
ng
g . A ll ll R
Rights Reser
rv
ve
ed. Ma
ay n
p
pu
po
os
s tt e
ed
d tt o
o a
a p
ub
b ll ii c
c ll y
y a
ac
cc
ce
es
ss
s ii b
b ll e
e w
we
eb
bs
s ii tt e
e ,, ii n
n w
wh
ho
o ll e
e o
or
r
May not be scanned, copied or duplicated,
w th ob lee socra ni nn epda, r ct .o p i e d o r d u p l i c a t e d , o r
o
ot be scanned, copied or duplicated, or
ii n
n p
pa
ar
r tt ..
12
Product and
Promotion:
Creating and
Communicating Value
LO1 What is a product and product
classifications?
LO2 What is product differentiation and the
key elements of product planning?
LO3 What is innovation and how does it
relate to the product life cycle?
LO4 What is promotion and integrated
marketing communication?
LO5 What is the process to developing
promotional messages?
LO6 What is the promotional mix and
available tools?
2
©
©2
20
01
13
3 C
Ce
en
ng
ga
ag
ge
e L
Le
ea
ar
rn
n ii n
ng
g .. A
A ll ll R
R ii g
gh
h tt s
s R
Re
es
se
er
rv
ve
ed
d .. M
Ma
ay
y n
no
o tt
p
pu
cc
b ll e
we
o ll e
r ii n
po
os
s tt e
ed
d tt o
o a
a p
ub
b ll ii c
c ll y
y a
ac
ce
es
ss
s ii b
e w
eb
bs
s ii tt e
e ,, ii n
n w
wh
ho
e o
or
n
b
be
e s
sc
ca
an
nn
ne
ed
d ,,
pa
r tt ..
p
ar
c
co
op
p ii e
ed
d
o
or
r
d
du
up
p ll ii c
ca
a tt e
ed
d ,,
o
or
r
Product: It’s Probably More
Than You Thought
Product – anything
a company offers
to satisfy customer
needs and wants
3
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Services: A Product by Any Other Name
Most services embody
these qualities:
Intangibility
Inseparability
Variability
Perishability
4
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Goods and Services Spectrum
5
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Product Layers: Peeling the Onion
• Core benefit – satisfies the
consumers need
• The actual product – the physical
good
• Augmented product – warrantees,
free service, instruction manuals,
help lines
6
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Consumer Product Categories
Consumer Products – products for
personal use or consumption
• Convenience Products
• Shopping Products
• Specialty Products
• Unsought Products
7
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Business Product Categories
Business Products – purchased to use directly or
indirectly in the production of another product
• Installations
• Accessory Equipment
• Maintenance, Repair, and Operating
Products
• Raw Materials
• Component Parts & Processed
Materials
• Business Services
8
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Product Quality
Quality Level – how
well a product performs
its core functions
Product Consistency –
how reliably a product
delivers it promised level
of quality
9
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Product Lines and the Product Mix
Product Line – products
that are closely
related
Product Mix – the total
number of product
lines by a single firm
Cannibalization –
A new product “eats”
the sales of an
existing line
10
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Branding
Brand - a product’s
identity that sets it
apart from other
players in the same
category
Brand Equity – the extra
money that consumers
will spend to buy that brand
Brand Name – a catchy,
memorable name is
a powerful part
of strong brand
National brands are brands that the manufacturer produces
and markets, while store brands are brands that retailers
label and market.
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
11
or
Line Extensions versus Brand
Extensions
Line
Extensions
Similar
products offered
under the same
brand name
Brand
Extensions
A product in a
new category
under an existing
brand name
12
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Cobranding
Cobranding established brands
from different
companies join
forces to market the
same product
13
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Packaging
 Protect the Product
 Provide Information
 Facilitate Storage
 Suggest Product Uses
 Promote the Brand
 Attract Buyer Attention
14
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Levels of Innovation
15
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
The New Product Development Process
 Idea Generation
 Idea Screening
 Analysis
The adoption of new
products is called diffusion;
consumers try new things at
different rates.
 Development
 Testing
Consumers range from first
adopters to laggards.
 Commercialization
16
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
The Product Life Cycle: Maximizing
Results over Time
17
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Integrated Marketing Communication
Integrated Marketing Communication is the
coordination of messages through multiple
promotional vehicles.
 Coordinate promotional messages
 Create unified impression in the mind of customers
 Identify key points of contact between product and
target market
18
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
An International Perspective
• DeBeers tried running ads in Japan using a proven
western strategy
But a Japanese woman would shed tears and feign anger that her
husband would spend so much money
• The revised DeBeers campaign featured a man and
wife in their tiny apartment
Receiving a diamond, the wife chides her extravagant husband ,“Oh,
you stupid!”
• Taking a big idea to a foreign market requires careful
research
Source: Professor Paul Herbig, Tristate University, International Marketing Lecture Series, Session 6, International Advertising, http://www.tristate.edu/faculty/herbig/pahimadvstg.htm, accessed June 1, 2005; Taking Global Brands to Japan by Karl
Moore and Mark Smith, The Conference Board website, http://www.conference-board.org/worldwide/worldwide_article.cfm?id=243&pg=1, accessed June 1, 2005.
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
19
or
The Promotional Mix: Communicating
the BIG IDEA
• Advertising
These tools can
help communicate
the Big Idea
to your target
market.
• Sales Promotion
• Direct Marketing
• Personal Selling
• Emerging Tools
20
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Emerging Promotional Tools
 Internet Advertising
 Social Media
 Product Placement
 Advergaming
 Buzz Marketing
 Sponsorships
21
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Advertising & Media Spending
Advertising is paid, nonpersonal
communication, designed to influence a
target audience. Television remains the #1
advertising media. But it is fragmenting….
22
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Promotion
Consumer Promotion
Stimulate immediate sales
• Premiums
• Promotional Products
• Samples
• Coupons
• Rebates
• Displays
Trade Promotion
Stimulate wholesalers and
retailers to push specific
products
• Special Deals
• Allowances
• Trade Shows
• Contests
• Sweepstakes
• Special Events
23
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Starbucks Samples
• Samples drive immediate purchases
• Starbucks invited customers to sample
their new VIA coffees in 2010
• Sampling allows consumers to try
products before purchase
• Costco and Trade Joe’s do very well with
sampling strategies
24
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Public Relations
• Create positive relationships with the public
• Sometimes called “publicity”
• The media looks for newsworthy stories
• Smart firms push potential news of their company
• The advantage of PR is that it is usually credible
• The disadvantage is that marketers don’t control
media perceptions
25
©2013 Cengage Learning. All Rights Reserved. May not
posted to a publicly accessible website, in whole or in
be scanned,
part.
copied
or
duplicated,
or
Personal Selling
Person-to-Person presentation of products
• Building relationships
• Personal selling is best for:
• High-ticket items
• Complex products
• High-volume customers
• Sales People:
• Prospect and Qualify
• Prepare
• Present
• Handle Objections
• Close Sales
•A l l Follow-up
Rights Reserved. May not
©2013 Cengage Learning.
posted to a publicly accessible
website,
in
whole
or
in
26
be scanned,
part.
copied
or
duplicated,
or
12
Looking Back
• What is a product and product classifications?
• What is product differentiation and the key elements of product planning?
• What is innovation and how does it relate to the product life cycle?
• What is promotion and integrated marketing communication?
• What is the process to developing promotional messages?
• What is the promotional mix and available tools?
27
©
©2
20
01
13
3 C
Ce
en
ng
ga
ag
ge
e L
Le
ea
ar
rn
n ii n
ng
g .. A
A ll ll R
R ii g
gh
h tt s
s R
Re
es
se
er
rv
ve
ed
d .. M
Ma
ay
y n
no
o tt
p
pu
cc
b ll e
we
o ll e
r ii n
po
os
s tt e
ed
d tt o
o a
a p
ub
b ll ii c
c ll y
y a
ac
ce
es
ss
s ii b
e w
eb
bs
s ii tt e
e ,, ii n
n w
wh
ho
e o
or
n
b
be
e s
sc
ca
an
nn
ne
ed
d ,,
pa
r tt ..
p
ar
c
co
op
p ii e
ed
d
o
or
r
d
du
up
p ll ii c
ca
a tt e
ed
d ,,
o
or
r