Lamb Hair Mc Daniel CHAPTER 10 Product Concepts

Lamb, Hair, Mc. Daniel CHAPTER 10 Product Concepts 1

What Is a Product? Product Everything, both favorable and unfavorable, that a person receives in an exchange. u Tangible Good u Service u Idea 2

Core and Augmented Components of a Product SUPPORT SERVICES COMPONENT PACKAGING COMPONENT � Repair and maintenance � Trademark CORE COMPONENT � Product platform � Installation � Brand name � Legal � Other related services � Price � Quality � Warranty � Design features � Functional features � Instructions � Deliveries � Package � Spare parts � Styling � Legal

Types of Products(Goods) Products Consumer Products Convenience Products Shopping Products Business Products Specialty Products Unsought Products 4

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 Product A product unknown to the potential new products buyer. Introduce or a known product that the new buyerinto does notmarkets actively seek 5

Distinguishing Consumer Products Type/ Criteria Convenience Shopping Specialty Distribution Intensive Selective Exclusive Retail margin low medium High Consumer Shopping time low medium High Purchase frequency high medium low Inventory turnover high medium low medium high Support services low

Product Items, Lines, and Mixes 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. 7

Campbell’s Product Lines and Mix { } 8

Factors Affecting the Optimum Product Mix Decision of Company • • • Level of market/economic development Sales/Profit Competition Market characteristics Product characteristics Legal considerations

Product Modification, Repositioning, and Extension • Product Modification: quality modification, functional modification, style modification • Product Repositioning • Product Line Extension or Deletion/Contraction • Planned Obsolescence

Branding Concepts • A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products. • Why branding-benefits of branding • Manufacturer’s vs. Private Brands • Individual vs. Family Brands • Co-branding • Trademark, Patent • Brand Equity • Warranties-benefits of warranties • Global Branding

Branding Concepts and Use 12

Packaging and Labeling • Why packaging-Functions/benefits of packaging: • containing and protecting products • facilitating storage, use, convenience • facilitating recycling and reducing environmental damage • Why labeling-benefits of labeling • Information and persuasion issue • Government regulations 13

Universal Product Codes (UPCs) A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products. 14

Global Issues in Branding One Brand Name Everywhere Global Options for Branding Adaptations & Modifications Different Brand Names in Different Markets 15

Product Warranties Warranty A confirmation of the quality or performance of a good or service. Express Warranty A written guarantee. An unwritten guarantee that the good or Implied service is fit for the purpose for which it was Warranty sold. (UCC) 16

Ch 10: Discussion Questions 1. 2. 3. 4. 5. What is a product? How marketers define Core and Augmented Product? Define the four types of consumer products. How can we classify them using various criteria? Explain the concept of product item, product line, and product mix. What is an optimum product mix? Explain the factors affecting optimum product mix of a company. Define branding and explain the rationale for branding.