Chapter 10 Designing products:

Products, Brands, Packaging and

Services
AND
Chapter 11 Designing products:
New product development and
Product life cycle strategies

Nayra Franchesca Dizon

Sarah Lalog
Krizza Lorayne Mac
Rinalyn Pestao
Keenah Jia Villafranca

Chapter 10 designing products: products, brands, packaging and services

Product anything that can be offered to a market for attention, acquisition, use or
consumption and that might satisfy a want or need.

It is a more than a simple set of tangible features.

Product planners need to think about the product on 3 levels:

core product the most basic level, consists of the problem solving
services or core benefits that consumers seek when they buy a
product.
Actual product the product planner must next build this around the
core product. It may have as many as 5 characteristics: a quality level,
features, design, a brand name and packaging.
Augmented product it must build around the core and actual products
by offering additional consumer services and benefits.
Product classifications
1. Durable goods, non durable goods and services
Products can be classified into 3 groups according to their durability or tangibility.
Non durable goods are consumer goods that normally are consumed in 1 or few
uses.
Durable goods used over an extended period of time and that normally survive
many uses.
Services activities, benefits or satisfactions that are offered for sale. It is essentially
intangible and do not result in the ownership of anything.
2. Consumer goods
Consumer goods those bought by final consumers for personal consumption. It
includes: Convenience goods are consumer goods and services that the customer
usually buys frequently, immediately and with a maximum of comparison and
buying effort. They are usually low priced and widely available. It can also divided
into:
Staples goods that consumers buy on a regular basis
Impulse goods are purchased with little planning or search effort
Emergency goods are purchased when a need is urgent
Shopping goods are consumer goods that the customer, in the process of selection
and purchase, usually compares on such bases as suitability, quality, price and
style. It can be divided into uniform and non uniform goods.
Uniform goods the buyer see uniform shopping as similar in quality but
different enough in price to justify shopping comparisons. The seller has to talk
price to the buyer.
Non uniform goods product features are often more important than price.
The seller of non uniform shopping therefore must carry a wide assortment to

satisfy individual tastes and must have well-trained salespeople to give information
and advice to customers.
Specialty goods are consumer goods with unique characteristics or brand
identification for which a significant group of buyers is willing to make a special
purchase effort.
Unsought goods are consumer goods that the consumer either does not know
about or knows about but does not normally think of buying.

3. Industrial goods
Industrial goods those bought by individuals and organizations for further
processing or for use in conducting a business. It can be classified in 3 groups
according to how they enter the production process and according to what they
cost.
Materials and parts are industrial goods that enter the manufacturers
product completely, either through further processing or as components.
2 classes: Raw materials includes Farm products supplied by many small
producers who turn them over to marketing intermediaries that process and sell
them and Natural products supplied by fewer and larger producers, who tend to
market them directly to industrial users.
Manufactured materials and parts includes component materials usually
are processed further and component parts enter the finished product completely
with no further change in form.
Capital items are industrial goods that partly enter the finished product.
2 groups: Installations are major purchases, they usually are bought directly from
the producer after a long decision period.
Accessory equipment these products do not become part of the finished
product. They have a shorter life than installations and simply aid in the production
process.
Supplies and services are industrial goods that do not enter the finished
product at all.
Supplies are convenience goods of the industrial field because they
usually are purchased with a minimum of effort or comparison.
Business services usually supplied under contract
Maintenance services provided by small producers
Repair services often available from the manufacturers of the original
equipment

Individual product decisions

Product attribute decisions
Product quality stands for the ability of a product to perform its functions.
*quality has two dimensions: quality level and quality consistency.
Total quality management an effort to constantly improve product and process
quality in every phase of their operations.
Product features a competitive tool for differentiating the companys product
from competitors products.

Product design can be one of the most powerful competitive weapons in a

companys marketing arsenal.
more than skin deep, it goes to the very heart of a product.
Style simply describes the appearance of a product.
Brand decisions
Brand a name, term, sign, symbol or design or a combination of these intended to
identify the goods or services of one seller or group of sellers and to differentiate
them from those of competitors.
4 levels of brands meaning: attributes, benefits, values and personality
Brand equity
To brand or not to brand
Seller several advantages on branding:
- Brand name makes it easier for the seller to process orders and track down
problems
- The sellers brand name and trademark provide legal protection for unique
product features that otherwise might be copied by competitors
- Lets the seller attract a loyal and profitable set of customers
- Helps the seller to segment markets
- Also adds value to consumers and society
- Branding results in more product variety and choice for consumers
- Increases shopper efficiency because it provides much more information
about products and where to find them
Brand sponsor
Manufacturers brand (national band) have long dominated the retail scene
Private brand (also called as retailer brand, distributor brand or store brand)
can be profitable.
Battle of the brands competition between manufacturers and middlemens brand
Slotting fees payments demanded by retailers from producers before they will
accept new products and find slots for them on the shelves.
Brand strategy
New brands company may create a new brand name when it enters a new
product category for which none of the companys current brand names are
appropriate.
Brand extension is any effort to use a successful brand name to launch new
or modified products in a new category.
Line extension occurs when a company introduces additional items in a
given product category under the same brand name.
Brand repositioning
Brand name selection
A desirable qualities for a brand name includes:
1. It should suggest something about the products benefits and qualities.
2. It should be easy to pronounce, recognize and remember (short names help).
3. The brand name should be distinctive.
4. The name should translate easily into foreign languages.
5. It should be capable of registration and legal protection.
Packaging decisions

Packaging includes the activities of designing and producing the container or

wrapper for a product.
Packaging concept states what the package should be or do for the product.
Labeling decisions
Label identifies the product or brand, might also grade the product, might
describe several things about the product and might promote the product through
attractive graphics.
Product support services decisions
Product support services services that augment actual products
Deciding on the service mix a company should design its product and support
services to meet the needs of target customers.
Delivering product support services companies must decide how they want to
deliver product support services to customers.
The customer service department should be used as a marketing tool to create
customer satisfaction and competitive advantage.
Product line decisions
Product line is a group of products that are closely related in function, customer
purchase needs or distribution channels.
Product line stretching decisions raises the question of whether a line should be
extended downward, upward or in two way stretch
Product line filling decisions raises the question of whether additional items should
be added within the present range of the line
Several reasons for product line filling:
reaching for extra profits
trying to satisfy dealers
trying to use excess capacity
trying to be the leading full-line company
trying to plug holes to keep out competitors
Product line featuring decision raises the question of which items to feature in
promoting the line
Piecemeal approach allows the company to see how customers and dealers like the
new styles before changing the whole line.
Product mix decisions
Product mix (or product assortment) set of all product lines and items that a
particular seller offers for sale.
4 important dimensions of product mix:
width refers to the number of different product lines the company
carries
Length refers to the total number of items the company carries
Depth refers to the number of versions offered of each product in the
line
Consistency refers to how closely related the various product lines are
in end use, production requirements, distribution channels or in some
other way
International product decisions
*International marketers face special product and packaging challenges.

For special products:

- They must figure out what products to introduce in which countries.
- They must decide how much to standardize or adopt their products for world
markets.
For packaging:
- Presents new challenges for international marketers.
- Issues can be subtle.
- May have to be tailored to meet the physical characteristics of consumers in
various parts of the world.

Chapter 11 designing product new product development and product life

cycle strategies

Product life cycle presents 2 major challenges: First, because all products
eventually decline, the firm must find new products to replace aging ones; Second,
the firm must understand how its products age and adapt its marketing strategies
as products pass through life cycle stage.
Acquisition by buying a whole company, a patent or a license to produce someone
elses product.
Success factors:
Unique superior product number 1 success factor, one with higher quality,
new features, higher value in use and other such attributes
Well-defined product concept company carefully defines and assesses the
target market, the product requirements and the benefits before proceeding
Technological and marketing synergy
Quality of execution in all stages
Market attractiveness
The new product development process for finding and growing new products consist
of 8 major steps:
Idea generation the systematic search for new product ideas.
Ways companies organize for new product development:
Product managers are close to the market and competition, they are ideally
situated to find and develop new product opportunities.
New-product managers tend to think in terms of product modifications and line
extensions limited to their current product and markets.
New-product committees charged with reviewing and approving new product
proposals.
New-product departments who has substantial authority and access to top
management
New-product venture teams a venture team, is a group brought together from
various operating departments and charged with developing a specific product or
business.
Major sources of new product ideas:
- Internal sources, customers, competitors and distributors, suppliers and
others
Idea screening first idea reducing stage, the purpose of screening is to
stop good ideas and drop poor ones as soon as possible.

Concept development and testing

Product idea an idea for a possible product that the company can see itself offering
to the market
Product concept a detailed version of the idea stated in meaningful consumer
terms.
Product image the way consumers perceive an actual or potential product.
Concept testing calls for testing new product concepts with a group of target
consumers.
Marketing strategy development
Consists of 3 parts:
1st part, describes the target market; the planned product positioning; and the
sales, market share and profit goals for the first few years.
2nd part, outlines the products planned price, distribution and marketing budget
for the first year.
3rd part, describes the planned long run sales, profit goals and marketing mix
strategy.

Business analysis involves a review of the sales, costs and profit

projections for a new product to find out whether they satisfy the companys
objectives.

Product development develops the product concept into a physical

product.
Design for manufacturability and assembly (dfma) using this approach companies
work to fashion products that are both satisfying to consumers and easy to
manufacture.

Test marketing the stage at which the product and marketing program are
introduced into more realistic market settings.
3 approaches when using test marketing:
Standard test markets test the new consumer product in situations similar to
those it would face in a full-scale launch.
Standard market test have some drawbacks:
- Take a long time to complete, sometimes from 1 to 3 years.
- Extensive standard test markets may be very costly.
- Give competitors a look at the companys new product well before it is
introduced nationally.
Controlled test markets take less time than standard test markets and usually
cost less.
Simulated test markets provides a measure of trial and the commercials
effectiveness against competing commercials.
Different methods for test marketing new products:
Product use tests business marketer selects a small group of potential customers
who agree to use the new product for a limited time.
Trade shows these shows draw a large number of buyers who view new products
in a few concentrated days.
Distributor and dealer display rooms where they may stand next to other
company products and possibly competitors product.

Standard or controlled test markets use to measure the potential of their new
products.
Commercialization introducing the new product into the market and will
face high costs.
4 decisions for launching a new product:
When whether the time is right to introduce the new product.
Wheremust decide whether to launch the new product in a single location, a
region, several regions, the national market or the international market.
To whom must target its distribution and promotion to the best prospect groups.
Howmust develop an action plan for introducing the new product into the selected
markets.
Sequential product development approach (step by step process) one company
department works individually to complete its stage of the process before passing
the new product along to the next department and stage.
Simultaneous product development faster, more flexible, save time and increase
effectiveness
Product life cycle strategies
Product life cycle the course that a products sales and profits take over its lifetime
5 distinct stages of product life cycle:
1. Product Development begins when the company finds and develops a new
product idea.
2. Introduction a period of slow sales growth as the product is being introduced
in the market.
3. Growth a period of rapid market acceptance and increasing profits.
4. Maturity a period of slowdown in sales growth because the product has
achieved acceptance by most potential buyers.
5. Decline the period when sales fall off and profits drop.
Plc concept describes:
Product class have the longest life cycle
Product forms in contrast, tent to have the standard plc shape
Brand can change quickly because of changing competitive attacks and responses.
Plc concept can be applied:
Style a basic and distinctive mode of expression.
Fashion currently accepted or popular style in a given field.
Fads fashions that enter quickly, are adopted with great zeal, peak early and
decline very fast.
Introduction stage starts when the new product is first launched. Profits are
negative or low because of the low sales and high distribution and promotion
expenses.
Growth stage which sales will start climbing quickly, the firm faces a trade-off
between high market share and high current profit.
Maturity stage lasts longer and it poses strong challenges to marketing
management.
Should consider:
Market modification company tries to increase the consumption of the current
product.

Product modification can change product characteristics to attract new users and
to inspire more usage.
Product characteristics:
Quality improvement aims at increasing product performance
Feature improvement adds new features that expand the products usefulness,
safety or convenience.
Style improvement aims to increase the attractiveness of the product
Marketing-mix modification can cut prices to attract new users and competitors
customers. Can also offer new improved services to buyers.
Decline stage sales may plunge to zero or they may drop to low level where they
continue for many years.
- Management may decide to maintain its brand without change in the hope
that competitors will leave the industry.
- Management may decide to harvest the product, which means reducing
various costs and hoping that sales hold up.
- Management may decide to drop the product from the line, it can sell it to
another firm or simply liquidate it at salvage value.