Product Concept
by Suwattana Sawatasuk
What is a product?
 Product: anything that can be offered to a market for
attention, acquisition, use, or consumption that might satisfy
a want or need
 Service: any activity or benefit that one party can offer to
another that is essentially intangible and does not result in the
ownership of anything
Classification of Products
A product bought by
final consumer for
personal
consumption
Products
Business
(Industrial)
products
Consumer
products
Convenience
products
Shopping
products
A product bought
by individuals and
organizations for
further processing
or for use in
conducting a
business
Specialty
products
Unsought
products
Type of Consumer Products
 Convenience product: a product that customers usually buy
frequently, immediately, and with a minimum of comparison and
buying effort
 Shopping product: a product that customers, in process of
selection and purchase, usually compares on such bases as
suitability, quality, price, and style
 Specialty product: a product with unique characteristics or
brand identification for which a significant group of buyers is
willing to make a special purchase effort
 Unsought product: a product unknown to the potential buyer,
or a known product that the buyer does not actively seek
Marketing
Consideration
Types of Consumer Product
Convenience
Shopping
Specialty
Unsought
Customer buying
behavior
•Frequent purchase,
little planning,
•little comparison or
shop effort,
•low customer
involvement
•Less frequent
purchase,
•much planning and
shopping effort,
comparison of
brands on price,
quality, style
•Strong brand
preference and
loyalty,
•special purchase
effort,
•little comparison of
brands
•Little product
awareness,
knowledge
Price
Low price
Higher price
High price
Varies
Distribution
Widespread
distribution,
convenient location
Selective distribution
in fewer outlets
Exclusive
distribution in only
one or a few outlets
per market area
Varies
Promotion
Mass promotion by
the producer
Advertising &
personal selling by
both producer &
resellers
More carefully
targeted promotion
by both producer
and resellers
Aggressive
advertising and
personal selling by
producer and
resellers
Examples
Toothpaste,
magazines, laundry
detergent
Major appliances,
TVs, furniture,
clothing
Luxury goods, such
as Rolex watches or
fine crystal
Life insurance, Red
Cross blood
donations
Product and Service Decisions
1
Product
attributes
2
Branding
3
Packaging
4
5
Labeling
Product
support
services
Product and Service Decisions (con’t)
I.
Product & Service Attributes
 Product quality: the characteristics of a product/service that bear on its
ability to satisfy stated or implied customer needs
 Product features: a competitive tool for differentiating the company’s
product from competitors’ products, being the first producer of new feature
is one of the most effective way to compete
 Product style and design:
 Design is a larger concept than style, it goes to the very heart of a
product. Good design contributes to a product’s usefulness as well as its
look.
 Style simply describes the appearance of a product. Good style might
grab attention, but it doesn’t necessarily make the product perform
better
Product designers should think more on how customer will use and benefit
from the product
Product and Service Decisions
2
Product
attributes
Branding
Packaging
Labeling
Product
support
services
Product and Service Decisions (con’t)
II.



Branding
Brand is a name, term, sign, symbol, design, or a combination
of these that identifies the products or services of one seller or
group of sellers and differentiates them from those of
competitors
Brand name: that part of a brand can be spoken, including
letters, words, and numbers
Brand mark: the elements of a brand that cannot be spoken
Brand equity: the value (awareness, perceived quality, and
brand loyalty) of company and brand names
Global brand: a brand where at least one-third of
the product is sold outside its home country or region
Benefits of Branding
Customer view brand as an important part of product and branding
can add value to a product
 Branding help buyers identify products that might benefit them
 Brand also say something about product quality and consistency
 Brand name becomes the basis on which the whole story can be
built about a product’s special qualities
 Brand name and trademark provide legal protection for unique
product features that otherwise might be copied by competitors
 Branding helps the seller to segment markets i.e. Toyota Motor
Corp. can offer the major Lexus, Toyota, and Scion brands, each
with numerous sub-brands—such as Camry, Prius, Matrix,Yaris,
Tundra, Land Cruiser, and others—not just 1 general product for
all consumers
Characteristics of Good Brand Name
1.
2.
3.
4.
5.
The name should readily come of the minds of customers.
It should be easy to pronounce.
The name should be easy to read and understand.
The name should be appropriate for the product.
It should be easy to remember.
It should, as far as possible, be most descriptive in nature.
http://www.freemba.in/articlesread.php?artcode=2264&substcode=95&stcode=1
Building Strong Brands
Brand Positioning
Attributes
Benefits
Beliefs and Values
Brand Name
Selection
Selection
Protection
Marketers need to position
their brands clearly in
target customers’ mind
and should establish a
mission for the brand
and vision of what the
brand must be and do
Brand
Sponsorship
Manufacturer’s brand
Private brand
Licensing
Co-branding
Brand
Development
Line extensions
Brand extensions
Multibrands
New brands
Building Strong Brands (con’t)
Brand Positioning
Attributes
Benefits
Beliefs and Values
Brand Name
Selection
Selection
Protection
Brand
Sponsorship
Manufacturer’s brand
Private brand
Licensing
Co-branding
To select brand name, marketers need
to review carefully on the
product & benefits, target
market, and proposed marketing
strategies. Then also need to protect
the brand by present it with the
registered trademark symbol
Brand
Development
Line extensions
Brand extensions
Multibrands
New brands
Building Strong Brands (con’t)
Brand Positioning
Attributes
Benefits
Beliefs and Values
Brand Name
Selection
Selection
Protection
Brand
Sponsorship
Manufacturer’s brand
Private brand
Licensing
Co-branding
Manufacturer’s brand (National): Sony, Kellogs
Private brand (Store or distributor): resellers create
the brand themselves
Licensing: some firm license name or symbols previously
created by other manufacturers i.e. cartoon characters
Co-branding: 2 firms join forces and co-brand a product
i.e. financial services firms often partner with other
companies to create co-branded credit cards
Brand
Development
Line extensions
Brand extensions
Multibrands
New brands
Building Strong Brands (con’t)
Brand Positioning
Attributes
Benefits
Beliefs and Values
Brand Name
Selection
Selection
Protection
Brand
Sponsorship
Manufacturer’s brand
Private brand
Licensing
Co-branding
Product Category
Brand Existing
Name New
Existing
New
Line extension
Brand extension
Multibrands
New brand
Brand
Development
Line extensions
Brand extensions
Multibrands
New brands
Brand Development Strategies
Product Category
Existing
New
Brand Existing
Name New
Line extension
Brand extension
Multibrands
New brand
 Line extension: extending and existing brand name to new
forms, colors, sizes, ingredients, or flavors of an existing
product category
 Brand extension: extending brand name to new product
categories
 Multibrand: introducing additional brands in the same
category of company
 New brand: creating new brand name
Product and Service Decisions
3
Product
attributes
Branding
Packaging
Labeling
Product
support
services
Product and Service Decisions
(con’t)
III. Packaging
Packaging: the activities of designing and producing the
container or wrapper for a product
Levels of Packaging
 Primary package: the package that wrap or contain the
actual product
 Secondary package: the package that wrap the primary
package to attract the customer’s eyes or for convenience in
the display location i.e. shelf
 Shipping package: the package that create for convenience
in product distribution or shipping
Product and Service Decisions
4
Product
attributes
Branding
Packaging
Labeling
Product
support
services
Product and Service Decisions (con’t)
IV. Labeling



Label identifies the product or brand.
Label might also describe several things about the product
e.g. who made it, where it was made, when it was made,
its contents, how it is to be used, and how to use it safely
Label might help to promote the brand, support its
positioning, and connect with customers
Samples of Labels
Nutritional
label
Price
unit
Shelf life
2 forms of labeling
Persuasive labeling
A type of package labeling that focuses on a promotional theme
or logo with consumer information being secondary
1.
Information labeling
A type of package labeling designed to help consumers make
proper product selections and lower their cognitive
dissonance after purchase. The product information might
include durability, color, features, cleanability, care
instructions, construction standard, nutrition, features, and
etc.
2.
Universal Product Codes (UPC)
 A series of thick and thin vertical lines (bar codes), readable
by computerized optical scanners, that represent numbers
used to track products on customer purchases records,
inventories control, or sales.
Product and Service Decisions
5
Product
attributes
Branding
Packaging
Labeling
Product
support
services
Product and Service Decisions (con’t)
V.


Product Support Services
Customer service is another element of product strategy.
For example, Hewlett-Packard (HP) offers a complete
set of sales and after-sale services. It promises “HP Total
Care, the expert help for every stage of your computer’s
life from choosing it all the way to recycling it”
Product warranties
 A warranty protects the buyer and gives essential
information about the product. It confirms the quality or
performance of a good or service.
Product Line Decisions
 Product line: a group of products that are closely related
because they function in a similar manner, are sold to the same
customer groups, are marketed through the same types of outlets,
or fall within given price ranges.
 Major product line decision:
 Product line length: the number of items in the product line
 Product line expansion:
 Line filling: adding more item within the present range of line to
reach extra profits, satisfy dealers, being the leading full-line company
 Line stretching: firm extends the product line beyond its current
range downward or upward to plug a market hole or to acquire the
faster growth
Line Stretching
 Honda stretched downward by adding Honda Fit(Jazz) to
its line to serve consumer demand in new-generation minicar
segment
 Many Japanese auto companies stretched upward in order to
add prestige to their current products by introducing an
upmarket automobile many years ago
Product Mix Decisions
 Product mix (or product portfolio):
the set of all product lines and items that a particular seller offers for
sale
 Example: Sony’s diverse portfolio consists of 4 primary product
businesses worldwide
Sony Electronics (cameras, camcorders, computers, TV, home
entertainment products, mobile electronics)
2. Sony Computer Entertainment (games)
3. Sony Picture Entertainment (movies, TV shows, music, DVDs)
4. Sony Financial Services (life insurance, banking, and other
offerings)
 For each business consists of several product lines
1.
Dimensions of Product Mix
 Width: the number of different product lines the company
carries
 Length: the total number of items(brands) the company
carries within its product lines
 Depth: the number of versions offered of each product
in the line (or product items SKU: Stock Keeping
Unit)
 Consistency: how closely related the various product lines
are in end use, production requirements, distribution
channels, or some other ways.
Thai Ha Public Company Limited
Product Mix Width (breadth) = 5
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Rice
1.Kaset
Bean
1.Kaset
-Jasmine AAA 5 kg. -Green bean400g.
-Jasmine AA 5 kg. - Half green bean
-Jasmine A5 kg.
400g.
-Soa-Hai 5 kg.
-Red bean 400g.
-Toong Kula
-Royal red bean
Jasmine 5 kg.
400g.
-Brown 5 kg.
-Black bean 400
-Brown 1 kg.
g.
-Oryza Sativa 5
-Soy bean 400g.
kg.
-Black sesame
250g.
2.Smart Chef
-Black sesame
-Surin 5 kg.
450g.
-White sesame
250g.
-White sesame
450g. Length = 1
Length = 2
Depth = 9
Depth = 10
Vermicelli
Vinegar
Oil
1.Kaset
-Green 40 g.
-Blue 40 g.
-Green 80 g.
-Blue 80 g.
-Green 200 g.
-Blue 200 g.
-Green 500 g.
-Blue 500 g.
1.Kaset
-300 cc.
-700 cc.
1.Ar-Ngoon
-13.75 liters
-18.26 liters
2. Cheer
-13.75 liters
-18 liters
2. Smart Chef
-40 g.
-80 g.
Length = 2
Depth = 10
Length = 1
Depth = 2
Length = 2
Depth = 4