Basic Issues in
Product Planning
Product Planning

Systematic decision making relating to
all aspects of the development and
management of a firm’s products,
including branding and packaging
Product

A set of tangible and intangible
attributes which may include price,
quality, packaging, color, and brand,
as well as the seller’s services and
reputation
Product line


A group of closely related product items,
which share characteristics or uses
Example: Kraft foods Beverages
Product mix
All of the different lines carried by a
firm
 Kraft brands

Product classifications
Goods vs. Services
 Consumer vs. Business

Classifications of Consumer
goods
Convenience good
 Shopping goods
 Specialty goods
 Unsought goods

Convenience goods
A product that the consumer is not
willing to spend a lot of time
shopping for
-will substitute
-do not shop around
-frequent purchase
-low price
Shopping goods
Goods for which a consumer
wants to compare characteristics
such as quality, price and style
before making a purchase
-Consumers will “shop around” as
long as they perceive a benefit
from doing so
-Producers choose fewer retailers
Specialty goods


Goods for which consumers have a strong brand
preference and are willing to spend considerable time and
effort in locating a desired brand
Frequently only one outlet in an area
Classifications of business
goods
Raw materials
 Fabricating parts and materials
 Installations
 Accessory equipment
 Operating supplies

Raw Materials

Goods that become part of the
finished product before they are
processed in any way
Fabricating parts and
materials

Become part of the finished product
after having been processed to some
extent
Fabricating materials-undergo further
processing
 Fabricating parts- assembled into final
product without any further processing

Installations
Major, expensive, long-lived
equipment
 Directly affect the scale of operations

Accessory equipment
Have substantial value and are used
in an organization’s operations
 Not a part of the finished product
 Does not have a significant impact on
the scale of operations

Operating supplies
Products that have a low dollar value
per unit and a short life
 Used to contribute to an
organization’s operation without
becoming part of the finished product

Organizing for Product
Development
Product planning committee
 New product manager
 Product or brand manager
 Venture team

Branding terms
Brand
 Brand name- McDonald’s, Kraft
 Brand mark
 Trade character
 Trademark

Brand name

Consists of words, letters, or numbers
that can be vocalized
McDonald’s
 Big Mac
 Kraft foods

Brand mark

The part of the brand that appears in
the form of a symbol, design, or
distinctive coloring or lettering
Trade character

A brand mark that is personified
Trademark

A brand that has been adopted by a
seller and given legal protection
Reasons for branding
(consumer perspective)
Easy to identify goods and services
 Assure consistent quality
 Reduce risk

Reasons for branding
(organizational perspective)
Brands can be promoted
 Easily recognized
 Fosters loyalty
 Reduces price comparisons
 Differentiate commodities
 Appeal to multiple segments
 Help sell an entire line
 Help a firm enter a new category

Reasons for NOT branding
Unwilling to accept responsibilities of
promoting and maintaining
consistency
 Product cannot be physically
differentiated

Branding decisions
Corporate symbols
 Branding philosophy

Manufacturer’s brands
 Private label or house brands
 Generic brands
 Mixed brand strategy


Family branding


Brand extension
Multiple branding
Choosing a brand name
Brand extension
 Private brand
 New name
 Licensing agreement
 Co-branding

Brand extension
Use an existing name for a new
product
 Tylenol brand extensions

Private brand

Retailer or wholesaler specifies the
name
Developing a new brand
name
Initials
 Invented word
 Number and letter combinations
 Mythological character
 Personal name
 Geographical name
 Dictionary word
 Foreign word
 Combination of words, initials,
numbers, etc.

Desirable characteristics of
new brand names
Suggestive
 Easy to pronounce, spell, remember
 Distinctive
 Adaptable
 Capable of registration and legal
protection

Licensing

A company pays a fee to uses a name
or logo whose trademark rights are
held by another firm
Co-branding

Two or more brands are used with the
same product to gain from the brand
images of each
Protecting a brand name
Trademark
 Common misuses

Product counterfeiting
 Generic usage

Packaging
Components:
 Product container
 Label
 Inserts
Purposes and Importance of
packaging
Protect the product between producer
and final customer
 Storage between uses
 Usage
 Channel cooperation
 Assist customer’s purchase
 Differential advantage

Packaging strategies
Family packaging
 Multiple packaging
 Changing the packaging
 Pillsbury Company

Criticisms of packaging
Depletes resources
 May cause health hazards
 Waste and pollution
 Deceptive
 Too much expense

Labeling
Brand label
 Descriptive label
 Grade label

Statutory Labeling
Requirements
Fair packaging and labeling act –
1966
 Nutrition Labeling and Education Act –
1990
 Amended Fair package and Labeling
Act
