Ass. Prof. Dr. Özgür KÖKALAN
İstanbul Sabahattin Zaim University
Chapter Objectives
1. Define product and list the elements of a product strategy
2. Describe the classifications of consumer goods, business
goods, and services
3. Distinguish between the product mix and product lines
4. Describe the four stages of the product life cycle
5-2
Marketing Mix
 A marketing mix that blends the four important
marketing elements product, pricing, promotion and
distribution to fit the needs and preferences of the
target market.
 It is also called as 4p’s
 Product
 Price
 Place (Distribution)
 Promotion
WHAT IS A PRODUCT?
 Product: bundle of physical, service, and
symbolic attributes designed to enhance
buyers’ want satisfaction
 Included in this broad definition are
considerations of package design, brand
names, warranties, and product image
© PhotoDisc
Services Are Products, Too
 Service: intangible task that satisfies
consumer or business user needs
 Most products combine both tangible goods
and intangible services
 Someone who purchases a new set of tires
may receive services such as mounting,
balancing, and periodic rotation as part of the
package
© PhotoDisc
CLASSIFYING CONSUMER AND
BUSINESS PRODUCTS
 Products can be broadly categorized as
either consumer products or business
products depending on who purchases
them for what reasons
© PhotoDisc
Categories of Consumer Products
 Marketers seeking to
classify consumer products
ask several questions
regarding purchases: Who?
What? When? Where?
How?
 The answers place a
purchase in one of three
consumer products
categories
Convenience
Shopping
Specialty
Unsought
Categories of Consumer Products
Convenience
 Convenience products:
items that consumers
purchase frequently,
immediately, and with
little effort
 Examples include
newspapers, chewing gum,
milk, and snack foods
Categories of Consumer Products
Convenience
Shopping
 Shopping products:
typically purchased only
after comparisons between
products in competing
stores to evaluate such
characteristics as price,
quality, style, and color
 Example: furniture, almost
all textile products
Categories of Consumer Products
Convenience
Shopping
Specialty
 Specialty products:
items that purchasers are
willing to make special
efforts to obtain
Categories of Consumer Products
Convenience
Shopping
Specialty
 Often have a well-known
brand names, are
expensive, and distributed
through exclusive dealers
 Examples: Louis Vuitton
luggage and Porsche autos
Categories of Consumer Products
Convenience
Shopping
Specialty
Unsought
 You would not generally
prefer buying
 Example; life insurance,
cemetery plots etc…
Figure 14.2
Advertising a Specialty
Product
Interesting Site
Marketing Strategy Implications
for Consumer and Business
Products
 Classifying products is a useful tool in developing
marketing strategies
 After classifying an item as a shopping product,
marketers gain an immediate idea of its
promotion, pricing, and distribution needs
Figure 14.3 Marketing Impacts of Consumer
Product Classifications
THE PRODUCT LIFE CYCLE
 Product Life Cycle: four basic stages
through which a successful product
progresses – introduction, growth,
maturity, and decline
The Product Life Cycle
Introduction
 Firm attempts to build demand for its new
offering
 Promotional campaigns concentrate on
features, uses, and benefits
 Financial losses are common due to low initial
sales and heavy promotional costs
The Product Life Cycle
Introduction
Growth
 Sales climb quickly
 Firm usually begins to realize profits due to higher
sales volume
 Marketing efforts continue to focus on establishing
the product in the market and building brand
awareness
 Later in the growth stage, the strategy shifts to
building loyalty
 Additional spending on product adaptation,
promotion and distribution, along with lower prices
may be necessary
The Product Life Cycle
Introduction
Growth
Maturity
 Industry sales continue to grow, but eventually
reach a plateau
 Companies emphasize market segmentation –
often resulting in an oversupply of the product
 Competition intensifies, and profits begin to
decline
 Some firms reduce prices and/or spend heavily
on promotion
The Product Life Cycle
Introduction
Growth
Maturity
Decline
 Innovations or shifts in consumer
preferences cause an absolute decline in
industry sales
 Industry as a whole does not generate
profits, though some firms can prosper
 Prices tend to hold steady if a loyal market
segment continues to buy the product
 If the firm is selling to consumers who are
loyal, they can skip most of the usual
advertising
Marketing Strategies for Stages in
the Product Life Cycle
 Product life cycle concept is a valuable
management tool for designing a marketing
strategy at different life-cycle stages
PRODUCT LINES AND THE
PRODUCT MIX
 Product line: group of related products
that are physically similar or are intended
for a similar market
 Product mix: the assortment of product
lines and individual goods and services
that a firm offers to consumers and
business users
PRODUCT IDENTIFICATION
 Brand: name, term, sign, symbol, design, or
some combination thereof that identifies the
products of a firm
 Brand name: the part of a brand consisting of
words or letters that form a name that identifies
and distinguishes an offering from those of
competitors
 Trademark: brand with legal protection
against another company’s use (can include
pictorial designs, slogans, packaging elements,
and product features)
™
™
™
Brands
Categories
•
•
Generic
Products
Family Brands
Some firms market their goods and
services without branding them.
Such items are called generic
products or generic brands
They are characterized by plain
packaging, minimal labeling, and
little or no advertising
Individual
Brands
Manufacturer's
Brands
Private Brands
Brands
Categories
•
•
Generic
Products
Family
Brands
Family Brand: single brand name
that identifies several related
products
When a firm that practices family
branding introduces a new
product, the familiar brand name
is recognized by all
Individual
Brands
Manufacturer's
Brands
Private Brands
Brands
Categories
•
•
Generic
Products
Family Brands
Individual brands: giving a
different brand name to each
product within a product line
Individual branding builds
competition within a firm and
enables the company to increase
overall sales
Individual
Brands
Manufacturer's
Brands
Private Brands
Brands
Categories
•
•
Generic
Products
Family Brands
Manufacturer’s (or national)
brands: brand offered and
promoted by a manufacturer or
producer
Examples include Chanel, Swatch,
Bic, Crest, and Dr. Pepper
Individual
Brands
Manufacturer's
Brands
Private Brands
Brands
Categories
•
•
Generic
Products
Family Brands
Private (or store) brand:
identifies a product that is not
linked to the manufacturer, but
instead carries the label of a
retailer or wholesaler
Retailers define their own brands
to maintain control over the
images, quality levels, and prices
of products they sell
Individual
Brands
Manufacturer's
Brands
Private
Brands
Characteristics of an Effective
Brand Name
 Should communicate appropriate
product images
 Must be easy to pronounce,
recognize, and remember
 Best if Short
 Should Attract Attention
© PhotoDisc
BUILDING BRAND LOYALTY
AND BRAND EQUITY
 Brand loyalty: measured in three stages–
recognition, preference, and insistence
 Brand recognition: brand acceptance
strong enough that the consumer is aware
of a brand, but not enough to cause a
preference over competing brands
© PhotoDisc
BUILDING BRAND LOYALTY
AND BRAND EQUITY
 Brand preference: occurs when a
consumer chooses one firm’s brand, when
it is available, over a competitors
 Brand insistence: when the consumer
will accept no substitute for a preferred
brand
 Product has achieved a monopoly position
with its consumers
© PhotoDisc
Brand Equity
 Brand Equity: added value that a certain
brand name gives to a product
 High brand equity offers financial
advantages to a firm
 Product commands a comparatively large
market share
 Often reduces price sensitivity
 Most Valuable Brands include Coca-Cola,
Microsoft Windows, IBM, Intel, Nokia,
GE, Ford, Disney, McDonald’s, and AT&T
© PhotoDisc
PACKAGES AND LABELS
 Packaging helps to achieve several
goals:
 Protects against damage, spoilage,
and pilferage
 Assists in marketing the product
 Cost-effectiveness
© PhotoDisc
PACKAGES AND LABELS
 Label: descriptive part of a product’s
package that lists the brand name or symbol,
name and address of the manufacturer or
distributor, product composition and size,
nutritional information for food products,
and recommended uses
© PhotoDisc
PACKAGES AND LABELS
 Effective labeling serves several functions:
 Attracts buyer’s attention
 Describes package contents
 Conveys product benefits
 Provides information on warranties,
warnings, and other consumer matters
 Gives and indication of price, value, and uses
© PhotoDisc