Lamb, Hair, McDaniel
MKTG2007-2008
9
CHAPTER
Chapter 9
Product Concepts
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
1
Learning Outcomes
LO1
Define the term product
LO2
Classify consumer products
LO3
Define the terms product item, product
line, and product mix
LO4
Describe marketing uses of branding
Chapter 9
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2
Learning Outcomes
LO5
Describe marketing uses of
packaging and labeling
LO6
Discuss global issues in branding
and packaging
LO7
Describe how and why product warranties
are important marketing tools
Chapter 9
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3
LO1
What Is a Product?
Define the term
product
Chapter 9
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4
What Is a Product?
Product
Everything, both favorable and
unfavorable, that a person
receives in an exchange.

Tangible Good

Service

Idea
LO1
Chapter 9
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5
What Is a Product?
Product is the starting point of Marketing Mix
Product
Price
LO1
Chapter 9
Promotion
Place (Distribution)
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6
LO1 REVIEW LEARNING OUTCOME
Define the term product
Product
Good
Service
Idea
Chapter 9
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7
LO2
Types of Consumer Products
Classify consumer
products
Chapter 9
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8
Types of Products
Business
Product
A product used to manufacture other
goods or services, to facilitate an
organization’s operations, or to resell
to other consumers.
Consumer
Product
A product bought to satisfy an
individual’s personal needs or wants
LO2
Chapter 9
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9
Types of Consumer Products
Products
Consumer
Products
Convenience
Products
Shopping
Products
Business
Products
Specialty
Products
Unsought
Products
LO2
Chapter 9
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10
Types of Consumer Products
Convenience
Product
Shopping
Product
Increase market share among
A relatively
existinginexpensive
customers item that
merits little shopping effort
Attract
new
customers
to
A product
that
requires
comparison
shopping,
because
it is usually more
existing
products
expensive and found in fewer stores
A particular
itemproducts
for whichfor
Create
new
Specialty
Market
consumers
extensively and
presentsearch
markets
Diversification
Product Development
are reluctant to accept substitutes
Unsought
2
LOProduct
Chapter 9
A product unknown to the potential
new
products
buyerIntroduce
or a known
product
that the
new
buyerinto
does
notmarkets
actively seek
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11
LO2 REVIEW LEARNING OUTCOME
Consumer Products
Chapter 9
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12
LO3 Product Items, Lines, and Mixes
Define the terms
product item,
product line,
and product mix
Chapter 9
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13
LO3 Product Items, Lines, and Mixes
Chapter 9
Product Item
A specific version of a product
that can be designated as a
distinct offering among an
organization’s products.
Product Line
A group of closely-related
product items.
Product Mix
All products that an
organization sells.
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14
LO3 Campbell’s Product Lines and Mix
{
Chapter 9
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}
15
LO3 Benefits of Product Lines
Advertising Economies
Package Uniformity
Standardized
Components
Efficient Sales and
Distribution
Equivalent Quality
Chapter 9
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16
LO3 Product Mix Width
Product Mix
Width
The number of product lines an
organization offers.
 Diversifies risk
 Capitalizes on established
reputations
Chapter 9
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17
LO3 Product Line Depth
Product Line
Depth
The number of product
Items in a product line.
 Attracts buyers with different
preferences
 Increases sales/profits by further
market segmentation
 Capitalizes on economies of scale
 Evens out seasonal sales patterns
Chapter 9
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18
LO3 Adjustments
Adjustments to
Product Items,
Lines, and Mixes
Product
Modification
Chapter 9
Product
Repositioning
Product Line
Extension or
Contraction
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19
LO3 Types of Product Modifications
Quality Modification
Functional Modification
Style Modification
Chapter 9
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20
LO3 Planned Obsolescence
Planned
Obsolescence
Chapter 9
The practice of modifying
products so those that have
already been sold become
obsolete before they actually
need replacement.
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21
LO3 Repositioning
Why reposition
established brands?
Changing
Demographics
Chapter 9
Declining Sales
Changes in
Social
Environment
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22
LO3 Product Line Extension
Product Line
Extension
Chapter 9
Adding additional products to
an existing product line in
order to compete more broadly
in the industry.
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23
LO3 Product Line Contraction
Symptoms of Product Line Overextension
 Some products have low sales or cannibalize
sales of other items
 Resources are disproportionately allocated to
slow-moving products
 Items have become obsolete because of new
product entries
Chapter 9
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24
LO3 REVIEW LEARNING OUTCOME
Product item, product line, and product mix
Chapter 9
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25
LO4
Branding
Describe marketing
uses of branding
Chapter 9
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26
Brand
Brand
A name, term, symbol,
design, or combination
thereof that identifies a
seller’s products and
differentiates them from
competitors’ products.
LO4
Chapter 9
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27
Branding
Brand
Name
That part of a brand that can be spoken,
including letters, words, and numbers
Brand
Mark
The elements of a brand that
cannot be spoken
Brand
Equity
The value of company and brand names
Global
Brand
A brand where at least 20 percent of the
product is sold outside its home country
LO4
Chapter 9
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28
Benefits of Branding
Product
Identification
Repeat Sales
LO4
Chapter 9
New Product
Sales
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29
Biz Flix
LO4
Chapter 9
Josie and the
Pussycats
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Top Five Global and North
American Brands
Global
North American
1. Apple
1. Apple
2. Google
2. Google
3. IKEA
3. Target
4. Starbucks
4. Starbucks
5. Al Jazeera
5. Pixar
LO4
Chapter 9
SOURCE: Deborah L. Vence, “Not Taking Care of Business,”
Marketing News, March 15, 2005, p. 19.
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31
Branding Strategies
Brand
Manufacturer’s
Brand
Individual
Brand
Family
Brand
No Brand
Private Brand
Combination
Individual
Brand
Family
Brand
Combination
LO4
Chapter 9
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32
Generic Brand
Generic
Product
A no-frills, no-brand-name,
low-cost product that is
simply identified by its
product category.
LO4
Chapter 9
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33
Manufacturers’ Brands Versus
Private Brands
Manufacturers’
Brand
The brand name of a
manufacturer.
Private
Brand
A brand name owned by a
wholesaler or a retailer. Also
known as a private label or
store brand.
LO4
Chapter 9
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34
Advantages of
Manufacturers’ Brands
 Heavy consumer ads by manufacturers
 Attract new customers
 Enhance dealer’s prestige
 Rapid delivery, carry less inventory
 If dealer carries poor quality brand, customer may
simply switch brands and remain loyal to dealer
LO4
Chapter 9
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35
Advantages of
Private Brands
 Earn higher profits on own brand
 Less pressure to mark down price
 Manufacturer can become a direct competitor or
drop a brand/reseller
 Ties customer to wholesaler or retailer
 Wholesalers and retailers have no control over the
intensity of distribution of manufacturers’ brands
LO4
Chapter 9
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36
Individual Brands Versus
Family Brands
Individual
Brand
Family
Brand
Using different brand names
for different products.
Marketing several different
products under the same
brand name.
LO4
Chapter 9
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37
Cobranding
Ingredient
Branding
Types of
Cobranding
Cooperative
Branding
Complementary
Branding
LO4
http://www.bose.com
Online
Chapter 9
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38
Trademarks
A Trademark is the exclusive right to use a brand.
 Many parts of a brand and associated symbols
qualify for trademark protection.
 Trademark right comes from use rather than
registration.
 The mark has to be continuously protected.
 Rights continue for as long as the mark is used.
 Trademark law applies to the online world.
LO4
Chapter 9
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39
LO4 REVIEW LEARNING OUTCOME
Marketing Uses of Branding
Chapter 9
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40
LO5
Packaging
Describe marketing
uses of packaging
and labeling
Chapter 9
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41
LO5 Functions of Packaging
Contain and Protect
Promote
Facilitate Storage, Use,
and Convenience
Facilitate Recycling
http://www.levesquedesign.com/
http://www.design4packaging.com
Online
Chapter 9
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42
LO5 Labeling
Persuasive


Focuses on
promotional
theme
Consumer
information is
secondary
Informational

Helps make proper
selections

Lowers cognitive
dissonance

Includes use/care
http://www.fda.gov
Online
Chapter 9
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43
LO5 Universal Product Codes
Universal
Product Codes
(UPCs)
Chapter 9
A series of thick and thin
vertical lines (bar codes),
readable by computerized
optical scanners, that
represent numbers used
to track products.
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44
LO5 REVIEW LEARNING OUTCOME
Packaging and Labeling
Chapter 9
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45
LO6
Global Issues in
Branding and Packaging
Discuss global
issues in branding
and packaging
Chapter 9
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46
LO6 Global Issues in Branding
One Brand Name
Everywhere
Global Options
for Branding
Adaptations &
Modifications
Different Brand
Names in Different
Markets
Chapter 9
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47
LO6 Global Issues in Packaging
Labeling
Global
Considerations
for Packaging
Aesthetics
Climate
Considerations
Chapter 9
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48
LO6 REVIEW LEARNING OUTCOME
Global Issues in Branding and Packaging
Chapter 9
Branding Choices:
Packaging Considerations:
1 name
Modify or adapt 1 name
Different names in
different markets
Labeling
Aesthetics
Climate
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49
LO7
Product Warranties
Describe how
and why product
warranties are
important
marketing tools
Chapter 9
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50
Product Warranties
Warranty
A confirmation of the quality or
performance of a good or service.
Express
Warranty
A written guarantee.
Implied
Warranty
An unwritten guarantee that the
good or service is fit for the purpose for
which it was sold. (UCC)
LO7
Chapter 9
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51
LO7 REVIEW LEARNING OUTCOME
Product Warranties
Chapter 9
Express warranty
=
written guarantee
Implied warranty
=
unwritten guarantee
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52