MARKETING MANAGEMENT 12 th edition 12 Setting Product

MARKETING MANAGEMENT 12 th edition 12 Setting Product Strategy Kotler Keller

Chapter Questions • What are the characteristics of products and how can they be classified? • How can companies differentiate products? • How can a company build and manage its product mix and product lines? • How can companies combine products to create strong co-brands or ingredient brands? • How can companies use packaging, labeling, warranties, and guarantees as marketing tools? 2

At the heart of a great brand is a great product 3

Product Anything that can be offered to a market to satisfy a want or need. 4

Figure 12. 1 Components of the Market Offering 5

Figure 12. 2 Five Product Levels 6

Product Classification Schemes Durability Tangibility Use 7

Durability and Tangibility Nondurable goods Durable goods Services 8

Consumer Goods Classification Convenience Shopping Specialty Unsought 9

Industrial Goods Classification Materials and parts Capital items Supplies/ business services 10

Product Differentiation • • Product form Features Performance Conformance Durability Reliability Reparability • • Style Design Ordering ease Delivery Installation Customer training Customer consulting Maintenance 11

Dunkin’ Donuts’ Differentiation 12

Design Differentiation 13

Maintenance and Repair 14

The Product Hierarchy Item Product type Product line Product class Product family Need family 15

Product Systems and Mixes • • Product system Product mix Product assortment Depth Length Width Consistency 16

Product Line Analysis Core product Staples Specialties Convenience items 17

Figure 12. 3 Product-Item Contributions to a Product Line’s Total Sales and Profits 18

Figure 12. 4 Product Map 19

Line Stretching Down-Market Stretch Up-Market Stretch Two-Way Stretch 20

Line Filling 21

Product-Mix Pricing • • • Product-line pricing Optional-feature pricing Captive-product pricing Two-part pricing By-product pricing Product-bundling pricing 22

Product Line Pricing 23

Two-Part Pricing 24

Co-branding 25

Ingredient Branding 26

Packaging: The 5 th P All the activities of designing and producing the container for a product. 27

Packaging has been influenced by… Self-service Consumer affluence Company/brand image Innovation opportunity 28

Innovations in Packaging 29

Functions of Labels Identifies Grades Describes Promotes 30

Warranties and Guarantees 31

Marketing Debate ü With products, is it form or function? Take a position: 1. Product functionality is the key to brand 2. success. 3. 2. Product design is the key to brand 4. success. 32

Marketing Discussion ü Consider the different means of differentiating products and services. Which ones have the most impact on your choices? Why? 33