MARKETING MANAGEMENT
Chaudhry Muhammad Nadeem Faisal
Cell: 0305-7761061
Email: faisal.uk@live.co.uk
B-Email: info@littlemichael.co.uk
Url: www.littlemichael.co.uk/faisal/index.htm
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng

What are the characteristics of products and how
can they be classified?

How can companies differentiate products?

How can a company build and manage its product
mix and product lines?

How can companies combine products to create
strong co-brands or ingredient brands?

How can companies use packaging, labeling,
warranties, and guarantees as marketing tools?
Setting Product Strategy
Product functionality is the key to brand success
Product design is the key to brand success
versus
Product
Anything that can be offered to a market to satisfy a want
or need.
Components of the Market Offering
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Product Levels: The Customer Value
In planning its market offering, marketers needs to
address 5 product levels. Each level adds more
customer value, and the five constitute a customer
value hierarchy
Five Product Levels
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Five Product Levels
1. Core Benefit-the fundamental need or want that
consumers satisfy by consuming the product or
service.
2. Generic Product-a version of the product containing
only those attributes or characteristics absolutely
necessary for it to function.
3. Expected Product-the set of attributes or
characteristics that buyers normally expect and agree
to when they purchase a product.
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
4. Augmented Product-inclusion of additional features,
benefits, attributes or related services that serve to
differentiate the product from its competitors.
5. Potential Product-all the augmentations and
transformations a product might undergo in the future.
Setting Product Strategy
Kotler noted that much competition takes place at the
Augmented Product level rather than at the Core
Benefit level or, as Levitt put it: 'New competition is
not between what companies produce in their factories,
but between what they add to their factory output in
the form of packaging, services, advertising, customer
advice, financing, delivery arrangements, warehousing,
and other things that people value
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Kotler noted that much competition takes place at the
Augmented Product level rather than at the Core
Benefit level or, as Levitt put it: 'New competition is
not between what companies produce in their factories,
but between what they add to their factory output in
the form of packaging, services, advertising, customer
advice, financing, delivery arrangements, warehousing,
and other things that people value
Product Classification Schemes
Durability
Tangibility
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Use
Setting Product Strategy
Durability and Tangibility
Services
Nondurable
goods
Durable
goods
Consumer Goods Classification

convenience products: low price, low risk, consumer
is not prepared to shop around, widely available in a
variety of retail stores

shopping products: consumer will want to compare
quality and price, risk and price are higher, available in
selected retail outlets

specialty products: consumer has strong brand
preferences, risk is high, prepared to seek out
exclusive retail outlets
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Classifying Business Products
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng

raw materials: unprocessed, become part of other
manufactured products

manufactured parts and materials: processed
products that become part of other products

installations: major buildings and equipment

accessory equipment: used in operations, include
computers, desks, tools

operating supplies: low value, used by most firms,
convenience products for businesses
Setting Product Strategy
Product Differentiation
Blekinge Institute of Technology
SE-371 79 Karlskrona

Product form
Ordering ease

Features
Delivery

Performance
Installation

Conformance
Customer training

Durability
Customer consulting

Reliability

Reparability

Style

Design
+46 455 38 50 00
www.bth.se/eng
Service Differentiation
Maintenance
Setting Product Strategy
Design Differentiation
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Product Hierarchy
need - core need
product family - all products satisfying a core need
product class - functional coherence within family
product line - closely related within a class
customers, outlets, prices}
{same
product type - different forms of same product
brand - one manufacturer’s offering
item - one unit within a brand
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
1.Need family. Information exchange. Communications.
2. Product family. Devices for electronic information
exchange. Wireless information devices.
3. Product category (class). GSM devices.
4. Product line. GSM Smartphones.
5. Product type. GSM Smartphones with Symbian OS.
6. Brand. Nokia.
7. Item. Nokia N70.
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Product Systems and Mixes
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng

Product system (group of diverse but related items
that function in a compatible manner)

Product mix

Depth

Length

Width

Consistency
Setting Product Strategy
Product Mixes
Width
number of product lines
Length
Total number of items in a mix
depth
number of items in a line (how many variants)
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
consistency
similarity of product lines in terms of production
and marketing
Setting Product Strategy
Product Line Analysis

Sales and profit

Market profile- How the line is positioned against
competitors’ lines.
-
The product map shows which competitors’
items are competing against company’s items.
-
It identifies market segments
Product-line length
Blekinge Institute of Technology

Line stretching

Line filling

Line modernisation, featuring and pruning
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Line stretching
Down-Market Stretch, Up-Market Stretch, Two-Way Stretch
Line Filling
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Product-Mix Pricing
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng

Product-line pricing

Optional-feature pricing

Captive-product pricing

Two-part pricing

By-product pricing

Product-bundling pricing
Setting Product Strategy
Product-Mix Pricing

Product-line pricing

Optional-feature pricing

Captive-product pricing

Two-part pricing

By-product pricing

Product-bundling pricing
Packaging
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
All the activities of designing and producing the container for a
product
Setting Product Strategy
Packaging has been influenced by

Self-service

Consumer affluence

Company/brand image

Innovation opportunity
Innovations in Packaging
PACKAGING IS THE EXPRESSION OF THE SOUL OF EVERY
PRODUCT
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
What is innovation?
Anything which creates or improve profitable
business
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
Product-Mix Pricing

Product-line pricing

Optional-feature pricing

Captive-product pricing

Two-part pricing

By-product pricing

Product-bundling pricing
Packaging
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
All the activities of designing and producing the container for a
product
Setting Product Strategy
Functions of Labels
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng

Identifies

Grades

Describes

Promotes
Setting Product Strategy
Functions of Labels

Identifies

Grades

Describes

Promotes
Warranties and Guarantees
Assurance to consumers
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Setting Product Strategy
References
P. Kotler, Marketing Management, 13th ed, Pearson, 2009
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng