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Chapter Questions
What are the characteristics of products and how do marketers classify products? How can companies differentiate products? Why is product design important and what factors affect a good design?
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Chapter Questions
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?
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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What Is a Product?
A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Because these goods are purchased frequently, the appropriate strategy is to make them available in many locations, charge only a small markup, and advertise heavily to induce trial and build preference.
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Durable products normally require more personal selling and service, command a higher margin, and require more seller guarantees.
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Durable goods
Services
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Unsought
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Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Unsought goods consumers does not know or does not normally think about E.g. Life insurance, investments, mediclaim, baby products
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Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Capital items are long-lasting goods that facilitate developing or managing the finished product. They include two groups: installations and equipment.
Installations consist of buildings ( factories, offices) and heavy equipment (generators, drill presses, mainframe computers, elevators). Installations are major purchases. They are usually bought directly from the producer, whose sales force includes technical personnel, and a long negotiation precedes the typical sale. Equipment includes portable factory equipment and tools (hand tools, lift trucks) and office equipment (personal computers, desks).
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Supplies and business services are short-term goods and services that facilitate developing or managing the finished product. Supplies are of two kinds: maintenance and repair items (paint, nails, brooms) and operating supplies (lubricants, coal, writing paper, pencils). Also known as MRO
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Business services include maintenance and repair services (maintenance of air conditioners, machine etc.), and business advisory services (legal, management consultants, advertising etc.)
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Product Differentiation
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Product Differentiation
Buyers expect a high conformance quality, the degree to which all produced units are identical and meet promised specifications. 11-26 . 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from Copyright
the United States edition of Marketing Management, 14e.
Product Differentiation
Durability, a measure of the products expected operating life under natural or stressful conditions, is a valued attribute for vehicles, kitchen appliances, and other durable goods. Reliability is a measure of the probability that a product will not malfunction or fail within a specified time period. Repairability measures the ease of fixing a product when it malfunctions or fails. Ideal repairability would exist if users could fix the product themselves with little cost in money or time. Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from
the United States edition of Marketing Management, 14e.
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Product Differentiation
Style describes the products look and feel to the buyer. It creates distinctiveness that is hard to copy.
Design
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Product Differentiation
Design
Design is the factor that will often give a company its competitive edge Design is the totality of features how a product looks, feels and functions in terms of customer requirements
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Product Differentiation
Design
Product Differentiation
Design
The designer must figure out how much to invest in form, feature, development, performance, durability, repairability and style
To company a well designed product is one that is easy to manufacture & distribute To customer a well designed product is one that has pleasant look and easy to install, open, use, repair and dispose off
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In both domestic & international markets, design, styling and manufacturing methods played significant roles in developing the brand image for this leather bags and accessory brand from India.
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For tanning, the leather is soaked in vegetable extracts or bark and seeds, and subsequently vegetable oil is applied to make the leather supple. The brass fittings that are used in the product are made in the factory using the traditional sand-casting process. The company follows elaborate processes to capture the customer preferences in style, patterns, color, and aesthetic appearance to design their product. Each product passes through several stages of stringent quality checks
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The spirit of brand is captured in its advertisement tag lines that proclaim years behind its time and leather crafted the forgotten way
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Certain countries and companies are winning on design E.g. German cars high quality and technological designs E.g. Italian design in apparel, accessories and furniture E.g. Scandinavian design for functionality, aesthetics and environmental consciousness E.g. Finlands Nokia the first to introduce user-changeable body covers for cell phones, first to elliptical shapes, oft and friendly forms, and first with big screens
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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A bad product design can ruin products prospects E.g. Sonys e-Villa Interne appliance was intended to allow consumers to have Internet access from their kitchens. But at nearly 32 pounds and 16 inches, the mammoth product was so awkward and heavy that the owners manual recommended customers bend their legs, not their back to pick it up. The product was withdrawn after 3 months
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Service Differentiation
Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair Returns
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Design
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Product family
Need family
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Need family the core need that lies the existence of a product family Product family all the product classes that can satisfy a core need with reasonable effectiveness
Product class A group of products within a product family recognized as having certain functional coherence (Product category)
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Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
Product line - A group of products within a product category (class) that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same outlets or channels or fall within given price ranges
Product type A group of items within a product line that share one of several possible forms of the product Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from
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Item = Stock keeping unit or product variant A distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Personal care (Need family core need) Cosmetics, skin creams, shampoos, conditioners, soaps, body lotion etc. (Product family) Hair cleaning agents (Product class/category) Shampoos (Product line)
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Dandruff control shampoo (Product type) Clinic All Cclear is a brand A sachet of Clinic All Clear is an (Item)
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Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Product system = Group of diverse but related items that function in a compatible manner
Product mix = set of all products and items a particular seller offers for sale
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Figure 11.3 Product-Item Contributions to a Product Lines Total Sales and Profits
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Source: Benson P. Shapiro, Industrial Product Policy: Managing the Existing Product Line (Cambridge, MA: Marketing Science Institute Report No. 77110). Copyright 2003. Reprinted by permission of Marketing Science Institute and Benson P. Shapiro.
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
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Product-Mix Pricing
Product-line pricing Optional-feature pricing Captive-product pricing Two-part pricing By-product pricing Product-bundling pricing
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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What Is Co-branding?
In co-brandingalso called dual branding or brand bundlingtwo or more well-known brands are combined into a joint product or marketed together in some fashion.
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Types of Co-branding
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Ingredient Branding
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Self-service Consumer affluence customers can pay a little more for appearance, dependability and prestige of better packages Company/brand image Innovation opportunity
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Packaging Objectives
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Packaging objectives
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Functions of Labels
Identify the product or brand Grade it Promote it
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Warranties = formal statements of expected product performance by the manufacturer Guarantee = suggest that the product is of high quality and that the company and its service performance are dependable
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For Review
What are the characteristics of products and how do marketers classify products? How can companies differentiate products? Why is product design important and what factors affect a good design?
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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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?
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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