Chapter 8 Product Concepts

Transcription

1 Marketing Management Chapter 8 Product Concepts Product-Introduction The customer never buys a product buy only a bundle of satisfaction Product represents anticipated and even unanticipated solutions to customer s problems The product idea encompasses many attributes of a physical good or service, installation, requirements and instructions Product Definition A product may be defined as everything, both favorable and unfavorable, that one receives in an exchange A product is anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need Product Level Five Levels Core benefit Is the essential use-benefit, problem solving service that the buyer primarily buys when purchasing a product Generic Product Is the basic version of the product Expected Product Is the set of attributes and conditions that the seller adds to distinguish the offer from competitors Product Level Augmented Product Is additional services and benefits that the seller adds to distinguish the offer from competitors Potential Product

2 It is the set of possible new features and services that might eventually be added to the offer Product Classification Consumer Products Business Products Business Products Is used to manufacturer other goods or services, to facilitate and organization s operations, or to resell to other customers Derived Demand Inelastic industry demand Tax treatments differ Business Product Classes Installations Raw materials Professional services Accessories MRO supplies Raw materials Component parts and materials Differences between goods and services Customers do not obtain ownership or services Service product are intangible performances Customers often actively involved in production process Other people may form part of product experience More variability in operational inputs and outputs Often difficult for customers to evaluate Absence of inventories after production Time factor is more important

3 Consumer Product Classes Convenience Products Staples Impulse products Emergency products Shopping product Homogeneous Heterogeneous Specialty product Unsought products New unsought products Regular unsought products Product Mix Is the set of all product lines and individual products that a firm sells. The more dissimilar the product lines and individual products are, the wider the product assortment Tata motor offers several lines of cars and trucks: Indica, Indigo, Sumo, S210 etc Product Line Is a set of individual products that are closely related The may be related because they may be related because they are produced or operate in similar way. Product lines can be organized by product function, customer group targeted, retail outlets used, and price range Product Item It is a specific version of a product that can be designated as a distinct offering among and organizations products An individual product is a particular product within a product line

4 Benefits of Product Line Advertising economy Package uniformity Standardization of components Efficient sales and distribution management Easy evaluation of quality by customers Product Width Refers to the number of product lines that and organization offers Firms increase product mix width to Spread risk across multiple lines Capitalize on established reputations Product Line Depth Is the number of product lines in a product line Firms increase product line depth to Attract buyers Economies of scale Sales and proffers Even out seasonal sales patterns Product modifications Involves changing one or more of a product s characteristics Quality modification Functional modification Style modification Repositioning Involves changing customer s perceptions of a product An entire line may be repositioned with a new name, packaging, and advertising to revitalize sales Product Line Extension Is the practice of adding products to an existing product line in order to complete more broadly in the industry

5 The danger of line extension is cannibalization of other product in the same line Product Line Contraction May be undertaken if the line is overextended Symptoms of overextension include Low sales Slow moving products Obsolescence Branding Brand Is a name, tem, sign, symbol, design or combination thereof that identifies a seller s products and differentiates them from competitor's products Branding Means the use of a name, term, symbol, or design to identify a product. Brand Name Is that part of the brand that can be spoken, including letters, words, and numbers E.g. Ujala, Dettol, Ayush Trademark Include only those words, symbols, or marks that are legally registered for use by a single company Service mark Is a trademark that refers to a service offering Branding Objectives Identification Repeat sales Easy introduction of new product Widespread availability Economies of scale Better pricing

6 Manufacturer Brands Also called national brands Created owned by products Develop demand across many markets Dealer Brands Also called private brands or store brands Created by middlemen Create higher margins for dealers Brand Choices Family brand Licensed brand Generic brand Individual brand Co-branding Placing two or more brand name on a product or its package Ingredient branding identifies the brand of a part that makes up the product Cooperative branding is where two brand receives equal treatment Complementary branding is where products are advertised or marketed together to suggest usage Packaging Is a container for protecting and promoting a product Packaging can enhance the product Packaging sends a message Packaging may lower distribution cost UPC codes speed handling Product Quality and Customer Needs Product Quality Means a product s ability to satisfy a customer s need or requirements. Customer have different needs and satisfaction of customers depend on fulfillment of needs

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