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Product Concept
Professor Close
Product Planning
• Product:
- Anything a customer gets in an exchange (good, bad)
– Need satisfying offerings (Hallmark)
– Can be a good or a service
– Services are “products” too
Good
Tangible
In advance
Possible
Possible
Consistent
Some Characteristics
Nature
Production simultaneity
Storage/ Perishability
Transport
Quality/ Heterogeneity
Service (def) deed for another
Intangible
“Close” to the customer
Impossible
Impossible
Inconsistent
Product Planning
• Quality (What does it mean?)
– Product’s ability to satisfy customer’s
needs/requirements.
– Consistency (McDonalds and what other
companies?)
– Relative quality – similar products
against each other
What do you think are some
quality products? Why?
Consumer Products
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General classification: what types of
customers will use them?
Businesses B2B or consumers B2C
Consumer products:
–
• For “final” users
• Classifying consumer products
• How consumers shop
• How consumers think about them
Perception usage varies (among food items and
what other product categories?)
4 Types of Consumer Products
1. Convenience
– Little time/effort; frequent purchase
– Intense distribution
– Substitutes acceptable
– Low price (grocery products)
2. Shopping: time comparing alternatives; less
frequent purchase, low loyalty
– Homogeneous: seen as same; want bargain
– Heterogeneous: seen as different; want quality;
salespeople help desired
– Marketing: fewer outlets, higher markups
4 Types of B2C Products, cont.
3. Specialty: is shopping an end, pleasurable;
willingness makes it specialty
• Planned purchase: strong desire and effort
(collectors); alternatives unacceptable
• Amount of search (Beanie Babies; xmas toys)
• Limited availability is OK; high markups
4. Unsought (tombstones; towing; dentists)
• Only want “in a pinch;” infrequent and no
effort; lack knowledge or desire
• Promotion; sales (Dentists for phobic patients)
• What are your unsought products?
What type of product?
What type of product?
B2B Products
• Businesses (B2B):
– Use to make other products
– Bought and resold
– Used for corporate or organization’s use
– Less shopping is involved (vs. B2C)
– Classify via:
• How buyers think about the product
• What type of customer will use the product
• How the product is used
Product Items, Lines, and Mixes
• Item: version of a product (Diet Coke)
• Line: group of closely related products (CocaColas soft drinks)
• Mix: all the products a company offers (water,
energy drinks, soda)
• Modify and reposition (Old Navy)
Should Old Navy Reposition???
Branding
– Identify product via letters, terms, designs
– Branding strategies:
– Brand name – letters associated with product
– Trademark/servicemark – words, symbols for
one firm (legally protected)
– Co-brand (apple ipod and coach)
– Family – one brand, many products
(Hershey’s, Campbell’s)
– Generics – no brand (signal of savings)
– Dealer/private label: by store
– National/manufacturer: by vendor
Hot or not…What are the most
equitable brands?
Equitable Brands
1.
2.
3.
4.
5.
6.
7.
8.
Apple
Blackberry
Google
Amazon
Yahoo
eBay
Red Bull
Starbucks
9. Pixar
10. Coach
11. Whole Foods
12. EA Sports/Games
13. MTV
14. Samsung
15. Victoria’s Secret
16. Nike
Branding
• Brand equity: financial value of the brand name
– Value (are we just paying for the name?)
• Consumer – familiarity
• Seller- be authentic, true to your people
– Less promotion (Reese’s)
– Legal protection (Coke; Olympic rings)
Better Branding;
Less Promotion
Packaging
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Defined as:
– Container or wrapping
Elements:
1. Function (fridgepack; pill bottles)
2. Promotion (L’eggs pantyhose; square Chanel)
Issues:
- UPC codes needed
– Information: government guidelines (good or bad??)
– Waste (kids lunches)
– Size (changing??)
Labeling
• Ethics (size of drink and sodium, calories)
• Warrantees
• Persuasive labeling (little information; focus on
logo)
• Informational labeling (helps your buying
decision; lessens cognitive dissonance)
• Your examples of each type of labeling?
Summary
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Global branding issues
Cobranding
Trademarks/service marks
Brand equity
Branding strategies
Product packaging/labeling