PRODUCT MARKETING
PRODUCT LEVELS
AUGMENTED
ACTUAL
CORE
Adapted from Kotler, 1994
TYPES PRODUCTS:

Convenience goods—
•

e.g.,
Shopping goods-• e.g.,

Specialty goods • e.g.,

Unsought goods • e.g.,
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WHAT ARE THE IMPORTANT
PARTS OF YOUR MIX?

Convenience good
•
• Why?

Shopping good
•
• Why?

Specialty good
•
• Why?

Unsought good
•
• Why?
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Sales & profits
Product Life Cycle

Products have limited lives,
so ______________

Products pass through
different stages--each with
different appropriate
marketing strategy
implications and
profitability, so
_______________

Shape varies!
sales
profits
intro growth maturity decline
Why Is There a PLC?

Adoption Process

Diffusion Process
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THE ADOPTION PROCESS
AWARENESS
INTEREST
EVALUATION
TRIAL
ADOPTION
The Diffusion Process
innovators
early
adoptors
early
majority
late
laggards
majority
What is missing?
What are some of the problems with this?
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Now, put it together!
Intro
Growth
Maturity
Decline
Sales
Profits
Comp
Tgt. mkt.
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Introduction
Growth
Maturity
Decline
Sales
Low
Rising
Peak
Declining
Costs
High/customer
Averager/cust.
Low/cust.
Low/cust
Profits
Negative
Rising
High
Declining
Customers
Innovators
Early adopters
Middle majority
Laggards
Competitors
Few
Growing #
Stable #; may be Declining #
declining
Marketing
Objective
Create awareness
and trial
Maximize
market share
Maximize profit;
defend market
share
Reduce
expenditures;
milk brand
Product
Basic product
Extensions &
Service
Diversify brands
Phase out weak
model
Price
One of two
Continue
strategy
Beat/Match
competition
Cut prices
Distribution
selective
intensive
More intensive
Phase out
Advertising
Build awareness
Build awareness
Stress
differences and
benefits
reduce
Sales Promotion
Heavy
reduce
Increase
reduce
Characteristic
Strategies
Two Mini-cases--Just Do Them!

What stage in the product life cycle is this
product in?

Who do you think should be the target
market (think about diffusion!)

Develop an appropriate marketing
objective.

Outline an appropriate strategy.
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Mini Case 1:
Your R&D department has developed a completely revolutionary way to
take notes in the classroom. The product is named “Wilbor”—a short
name for “WILLingly takes BORing notes.” To use the product, an
individual wears a headphone. Everything that s/he thinks that is
addressed to the computer is recorded onto a 51/2 inch diskette. For
instance, the EMBA students might think, “Oh dear, I better remember
what the early majority is,” so the student thinks, “Wilbor record that the
early majority is about 34% of adopters. Consumers in the early
majority make deliberate decisions and have many social contacts.
End Wilbor.” The electronic record is compatible with Microsoft Word.
The student simply puts the diskette into a disk drive and prints out
detailed, legible notes. To your knowledge, no other firm can offer this
product.
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Mini Case 2:
Your R&D department has developed a better way to make banana bread
from a mix. The new mix includes all dry ingredients and a special
package of banana puree (that does NOT turned that brown disgusting
color) mixed with vanilla extract. This package is to be added to the
mix prior to baking and results in a more “bananay” taste and a moister
bread. Secondary sources suggest that sales of banana bread mixes
have been experiencing slow growth during the past few years.
Competitors include Betty Crocker, Pillsbury, Martha White and JimDandy.
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Definition Time!

Product mix-• total assortment of product offerings

Product line
• --group of individual products that is ________
related - designed to meet a single need
• width--number of product lines
• length-number of products in a line
• consistency-how closely related the product lines are
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Matching
1. Cinnabuns offers only two types of buns-regular and miniature.
2. AT&T goes into the chocolate business.
3. Tootsie Rolls, Inc. makes only one thing-Tootsie Rolls.
4. The Body Shop offers 20 different types of
lotion, each with 7 fragrances.
5. AT&T offers a low-priced phone service
(Lucky Dog Phone Co.).
6. ACME makes many different types of
products--dynamite, electronics, foods,
vehicles, etc.
a. High consistency
b. Low consistency
c. Wide line
d. Narrow line
e. Long line
f. Short line
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Expansion is important to a firm!

How to Expand:
• downward stretch
• upward stretch
• two-way stretch
• line-filling

Cannibalization
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SERVICES MARKETING
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Important facts about services in
the US

Demand for services is increasing:
•
•
•
•

consumers are VERY busy
consumers have discretionary income
companies are outsourcing
technologies make more services available
Services are making up a (larger or smaller)
part of our GDP.
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SERVICE CHARACTERISTICS
• INTANGIBLE
•
• PERISHABLE
•
• INSEPARABILITY
•
• VARIABILITY
•
Nature of Services vs. Products
Goods
Client Relationships
Perishability
Tangibility
Separability
Customer Effort
Uniformity
Services
Environmental Influences on
Services

Economic

Political/legal

Social

Technological
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Services Pricing

Make sure everyone knows what is included
in the price.

Price-->Quality connection

Pricing to influence demand
•
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Services Promotion

Consumers rely on personal sources for
information.

Must detail what the service is.

Must communicate benefits.
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Services Placing

Facility location should be:
a. Close to the customer.
b. Close to the suppliers.
c. It depends.
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Think about:

Your really good service experience:

Your really bad service experience:
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What factors make a good/ bad
service experience?
Good
experiences include:
Bad
experiences include:
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Managing Service Quality
Perceptions

Tangibles --

Price Cues

Responsiveness-

Empathy-

Assurance27
Managing Aspects of
Products & Services

Positioning

Branding
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POSITIONING

Definition:
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PERCEPTUAL MAPPING

PAIRWISE COMPARISONS

MAP SIMILARITY DATA
e.g., compare:
1. Pittsburgh
2. Baltimore
3. Los Angeles
1&2
1&3
2&3
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• Heineken
• Lowenbrau
• Michelob
• Michelob Light
• Coors
•Coors Light
• Bud
• Bud Light
•Miller Light
•Natural Light
•Strohs
• Miller
• Hamms
• Oly Gold
• Hamms Light
• Rainier
• Schlitz Malt
Liquor
• Rolling Rock
• Rolling Rock Light
•Generic Light
• Generic
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POSITIONING IMPLICATIONS




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Branding
Provides the recognition factor for
products/services

Brand name•
•

Logo (Brand mark)-

Trademark-33
Selecting a brand name

Tells about product benefits

Easy to remember, pronounce, read, and
spell

Can be translated into other languages

Distinctive in some way
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Brand Strategies

BRAND EXTENSIONS
Advantages:
Disadvantages:

NEW BRAND
Advantages
Disadvantages

CO-BRAND (associative branding)
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Branding

How important is a brand name?
• NOT VERY 1 2 3 4 5 6 7 VERY
• WHY?
– from consumers’ viewpoint
– from firms’ viewpoint



Brand image-- impression consumer has of brand
Brand loyalty-- commitment and repeat purchasing of brand
Brand equity-- value of brand in marketplace; financial qualities of
brand from firm’s perspective
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BUILDING BRAND LOYALTY
BRAND RECOGNITION
BRAND ACCEPTANCE
BRAND PREFERENCE
BRAND LOYALTY
Brand Loyalty
LEADS TO:
1.
2.
3.
4.
Brand Equity
Pricing Preparation


Talk to a small business owner/manager or someone in
your company who is responsible for determining prices.
Ask the following questions:
• 1. How do you set your prices? What things do you consider?
• 2. What causes you to change prices? When is the last time you
changed a price(s)?
• How do you know if the price is “right”?
We’ll talk about this in the next class.
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