CHAPTER NINE
Elements of Product
Planning for Goods
and Services
For use only with
Perreault/Cannon/McCarthy
or Perreault/McCarthy texts.
© 2008 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
When we finish this lecture you should
1.
2.
Understand what “Product” really means.
3.
Understand how product classes can help a
marketing manager plan marketing strategies.
4.
Know the differences among the various
consumer and business product classes.
5.
Understand what branding is and how to use it in
strategy planning.
Know the key differences between goods and
services.
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.
Product Decisions for Marketing Strategy Planning
(Exhibit 9-1)
Product Decisions for Marketing Strategy Planning
(Exhibit 9-1)
CH 9: Elements of
Product Planning for
Goods & Services
Product
idea
Product
classes
CH 10: Product
Management &
New-Product
Development
Brand
Package
Warranty
Product Quality and Customer Needs
Relative Quality
Goods and/or Services Are the Product (Exhibit 9-2)
Differences in Goods and Services
Devoted to
erasing
stereotypes
Whole Product Lines Must Be Developed Too
Product Assortment, Product Line or Individual
Product?
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Product Classes Help Plan Marketing Strategy
Consumer Products
Business Products
Consumer Product Classes
Staples
Convenience Products
Products
Convenience
Impulse Products
Emergency Products
Shopping Products
Homogeneous
Shopping Products
Heterogeneous
Shopping Products
Specialty Products
Unsought Products
New Unsought
Products
Regular Unsought
Products
One Product May Be Seen Several Ways
Checking your knowledge
Jack White wanted to purchase a new dress shirt. He went
to a local department store, toured the men’s department,
and thought all the brands looked about the same. He
decided to buy the store brand shirt, because it was the
cheapest. For Jack, the new shirt was a(n):
A. convenience product.
B. heterogeneous shopping product.
C. specialty product.
D. homogeneous shopping product.
E. impulse product.
Business Products Are Different
Derived Demand
Inelastic Industry Demand
Tax Treatments Differ
Business Product Classes – How They Are Defined
Accessories
Raw
Materials
Installations
Professional
Services
Business
Product
Classes
MRO Supplies
Component
Parts &
Materials
Interactive Exercise: Business Product Classes
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Branding Needs a Strategy Decision, Too (Exhibit 9-5)
Conditions Favorable to Branding
Best Value for
the Price
Dependable,
Widespread
Availability
Easy to
Easy to Label
Label and
and Identify
Identify
Key
Issues
Favorable
Shelf or
Display Space
Market Price
Price
Market
Can Be
Be High
High
Can
Enough
Enough
Economies of
Scale
Achieving Brand Familiarity Is Not Easy
Brand
Insistence
Brand
Preference
Brand
Recognition
Brand NonRecognition
Brand Rejection
Brand Familiarity
More of your
customers ask
for Fix-A-Flat
by name than
all of our
competitors
combined.
You just can’t
buy that kind
of brand
recognition,
but you can
sell it. Fix-AFlat: Spare
Yourself.
The Right Brand Name Can Help
(Exhibit 9-6)
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
A Good Brand Name?
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Protecting Brand Names & Trademarks
Lanham Act
You Must
Must Protect
Protect
You
Your Own
Own
Your
Counterfeiting Is Accepted
In Some Cultures
What Kind of Brand to Use?
Licensed
Brand
Family Brand
Brand
Choices
Generic
“Brand”
Individual
Brand
Who Should Do the Branding?
Manufacturer
Brands
•
Also called
national brands
•
Created/owned
by producers
•
Develop demand
across many
markets
Dealer Brands
Battle
of the
Brands
•
Also called
private brands or
store brands
•
Created/owned
by middlemen
•
Create higher
margins for
dealers
Checking your knowledge
Target’s “Cherokee” brand of men’s clothing is available
only at Target stores. The brand provides a low-cost
alternative to other men’s fashions available at department
stores and via catalogs. The Cherokee brand is a(n):
A.
B.
C.
D.
E.
manufacturer brand.
dealer brand.
licensed brand.
national brand.
generic brand.
The Strategic Importance of Packaging
Packaging Can
Enhance the
Product
Packaging Sends
a Message
UPC Codes
Speed Handling
Packaging Can
Lower
Distribution Costs
What Is Socially Responsible Packaging?
Fair Packaging & Labeling Act
Laws Reduce Clutter & Confusion
Ethical Decisions Remain
Checking your knowledge
Heinz has a new ketchup bottle that has the cap on the
bottom, instead of the top. The bottle uses gravity to help
the consumer get every last drop of ketchup out of the
bottle. The cap is also designed to pour cleanly, so that
dried ketchup does not accumulate around the opening.
This new bottle demonstrates how packaging can:
A.
B.
C.
D.
E.
promote product.
protect the product.
lower distribution costs.
incorporate UPC codes.
enhance product usage.
Warranty Policies Are a Part of Strategy Planning
Promises in
Writing
MagnusonMoss Act
Support May
Be Costly
May Improve
Marketing Mix
Service
Guarantees
Checking your knowledge
McDonald’s announced that at select locations, if drivethrough customers do not get exactly what they want within
two minutes of placing the order, their next meal will be
free. This promise by McDonald’s is a good example of
a(n):
A.
B.
C.
D.
E.
service guarantee.
warranty.
unit price.
limited warranty.
no-fault insurance policy.
You now
1.
2.
Understand what “Product” really means.
3.
Understand how product classes can help a
marketing manager plan marketing strategies.
4.
Know the differences among the various
consumer and business product classes.
5.
Understand what branding is and how to use it in
strategy planning.
Know the key differences between goods and
services.
You now
6.
Understand the importance of packaging in
strategy planning.
7.
Understand the role of warranties in strategy
planning.
Key Terms
• Product
• Emergency products
• Quality
• Shopping products
• Homogeneous
• Service
shopping products
• Product assortment
•
Heterogeneous
• Product line
shopping products
• Individual product
• Specialty products
• Consumer products • Unsought products
• Business products
• New unsought
• Convenience products products
• Regularly unsought
• Staples
products
• Impulse products
• Derived demand
Key Terms
• Expense item
• Brand name
• Capital item
• Trademark
• Installations
• Service mark
• Accessories
• Brand familiarity
• Raw materials
• Brand rejection
• Farm products
• Brand nonrecognition
• Natural products
• Brand recognition
• Components
• Brand preference
• Supplies
• Brand insistence
• Professional services • Brand equity
• Branding
• Lanham Act
Key Terms
• Family brand
• Federal Fair
Packaging and
• Licensed brand
Labeling Act
• Individual brands
• Warranty
• Generic products
• Manufacturer brands • Magnuson-Moss Act
• Dealer brands
• Private brands
• Battle of the brands
• Packaging
• Universal Product
Code (UPC)