CHAPTER EIGHT
Elements of Product
Planning for Goods
and Services
For use only with
Perreault and McCarthy
texts.
© 2006 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
When we finish this lecture you should
1. Understand what “Product” really means.
2. Know the key differences between goods and
services.
3. Know the differences between the various
consumer and business product classes.
4. Understand how the product classes can help a
marketing manager plan marketing strategies.
5. Understand what branding is and how to use it
in strategy planning.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
When we finish this lecture you should
6. Understand the importance of packaging in
strategy planning.
7. Understand the role of warranties in strategy
planning.
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Exhibit 8-1
The Product Area Involves Many Strategy Decisions
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Product Quality and Customer Needs
+
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Relative Quality
+
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Exhibit 8-2
Goods and/or Services Are the Product
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Differences in Goods and Services
+
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Interactive Exercise: Attribute Ratings
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Whole Product Lines Must Be Developed Too
+
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Product Assortment, Product
Line or Individual Product?
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Product Classes Help Plan Marketing Strategy
Consumer Products
Business Products
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Consumer Product Classes
Staples
Convenience Products
Impulse Products
Emergency Products
Homogeneous
Shopping Products
Shopping Products
Heterogeneous
Shopping Products
Specialty Products
New Unsought
Products
Unsought Products
Regular Unsought
Products
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One Product May Be Seen Several Ways
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Business Products Are Different
Derived Demand
Tax Treatments Differ
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Business Product Classes – How They Are Defined
Accessories
Raw
Materials
Installations
Professional
Services
Business
Product
Classes
MRO Supplies
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Component
Parts &
Materials
Interactive Exercise: Business Product Classes
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Exhibit 8-5
Branding Needs a Strategy Decision, Too
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Conditions Favorable to Branding
Best Value for
the Price
Easy to
Easy to
Label and
Identify
Identify
Dependable,
Widespread
Availability
Key
Issues
Favorable
Shelf or
Display Space
Market Price
Can Be High
Enough
Economies of
Scale
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Achieving Brand Familiarity Is Not Easy
Brand
Insistence
Brand
Preference
Brand
Recognition
Brand NonRecognition
Brand Rejection
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Brand Familiarity
+
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The Right Brand Name Can Help
Short & Simple
Easy to Spell & Read
Easy to Recognize & Remember
Easy to Pronounce
Can Pronounce in Only One Way
Can Pronounce in All Languages
Suggests Product Benefits
Meets Packaging/Labeling Needs
No Undesirable Imagery
Always Timely
Adapts to Any Advertising Medium
Legally Available for Use
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A Good Brand Name?
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Protecting Brand Names & Trademarks
Lanham Act
You Must Protect
Your Own
Counterfeiting Is Accepted
In Some Cultures
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What Kind of Brand to Use?
Licensed
Brand
Family Brand
Brand
Choices
Generic
“Brand”
Individual
Brand
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Who Should Do the Branding?
Manufacturer
Brands
Dealer Brands
• Also called
national brands
• Also called
private brands
or store brands
Battle
of the
Brands
• Created/owned
by producers
• Develop demand
across many
markets
• Created/owned
by middlemen
• Create higher
margins for
dealers
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The Strategic Importance of Packaging
Packaging Can
Enhance the
Product
Packaging Sends
a Message
UPC Codes
Speed Handling
Packaging Can
Lower
Distribution Costs
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What Is Socially Responsible Packaging?
Laws Reduce Confusion & Clutter
Ethical Issues Remain
Unit Pricing May Help
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Warranty Policies Are a Part of Strategy Planning
Promises in
Writing
MagnusonMoss Act
Support May
Be Costly
May Improve
Marketing Mix
Service
Guarantees
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Key Terms
• Product
• Quality
• Service
• Product assortment
• Product line
• Individual product
• Consumer products
• Business products
• Derived demand
• Convenience products
• Staples
• Impulse products
• Emergency products
• Shopping products
• Homogeneous shopping
•
•
•
•
•
products
Heterogeneous shopping
products
Specialty products
Unsought products
New unsought products
Regularly unsought
products
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Key Terms
• Installations
• Capital item
• Accessories
• Raw materials
• Expense item
• Farm products
• Natural products
• Components
• Supplies
• Professional services
• Branding
• Brand name
• Trademark
• Service mark
• Brand familiarity
• Brand rejection
• Brand nonrecognition
• Brand recognition
• Brand preference
• Brand insistence
• Brand equity
• Lanham Act
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Key Terms
• Family brand
• Federal Fair Packaging
and Labeling Act
• Licensed brand
• Unit-pricing
• Individual brands
• Warranty
• Generic products
• Manufacturer brands • Magnuson-Moss Act
• Dealer brands
• Private brands
• Battle of the brands
• Packaging
• Universal Product Code
(UPC)
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