Product Concepts

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Prepared by Deborah Baker Texas Christian University

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Learning Objectives
1. Define the term product. 2. Classify consumer products.

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3. Define the terms product item, product line, and product mix.
4. Describe marketing uses of branding.

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Learning Objectives (continued)

5. Describe marketing uses of packaging and labeling.

6. Discuss global issues in branding and packaging. 7. Describe how and why product warranties are important marketing tools.

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Learning Objective

Define the term product.

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Product

Everything, both favorable and unfavorable, that a person receives in an exchange.

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What is a Product?
Product is the heart of Marketing Mix Price Promotion

Place (Distribution)
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Learning Objective
Classify consumer products.

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Product Classifications
Business Product
A product used to manufacture other goods or services, to facilitate an organizations operations, or to resell to other consumers.

Consumer Product

Product bought to satisfy an individuals personal wants

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Types of Consumer Products
PRODUCTS

Consumer Products

Business Products

Convenience Products
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Shopping Products

Specialty Products

Unsought Products
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Types of Consumer Products
Convenience Product
A relatively inexpensive item that merits little shopping effort.

Shopping Product Specialty Product Unsought Product

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A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.
A particular item that consumers search extensively for and are reluctant to accept substitutes. A product unknown to the potential buyer or a known product that the buyer does not actively seek.
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Types of Consumer Products
Convenience Products Shopping Products

Specialty Products

Unsought Products

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Learning Objective
Define the terms product item, product line, and product mix.

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Product Items, Lines, and Mixes
Product Item
A specific version of a product that can be designated as a distinct offering among an organizations products.

Product Line

A group of closely-related product items.

Product Mix
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All products that an organization sells.

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Gillettes Product Lines and Mix

Depth of the product lines Width of the product mix
Blades and razors
Mach 3 Sensor Trac II Atra Swivel Double-Edge Lady Gillette Super Speed Twin Injector Techmatic

Toiletries
Series Adorn Toni Right Guard Silkience Soft and Dri Foamy Dry Look Dry Idea Brush Plus

Writing instruments
Paper Mate Flair

Lighters
Cricket S.T. Dupont

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Benefits of Product Lines
Advertising Economies

Package Uniformity

Why Form Product Lines?

Standardized Components Efficient Sales and Distribution Equivalent Quality

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Product Mix Width
The number of product lines an organization offers.

Diversifies risk Capitalizes on established reputations

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Product Line Depth
The number of product items in a product line.
Attracts buyers with different preferences Increases sales/profits by further market segmentation Capitalizes on economies of scale Evens out seasonal sales patterns
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Adjustments
Adjustments to Product Items, Lines, and Mixes Product Line Extension or Contraction Product Repositioning
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Product Modification

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Product Modifications
Quality Modification

Types of Product Modifications

Functional Modification

Style Modification
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Planned Obsolescence
The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.

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Repositioning
Why reposition established brands?

Changing Demographics Declining Sales

Changes in Social Environment

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Product Line Extension
Adding additional products to an existing product line in order to compete more broadly in the industry.

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Product Line Contraction
Symptoms of Product Line Overextension

Some products have low sales or cannibalize sales of other items Resources are disproportionately allocated to slow-moving products Items have become obsolete because of new product entries
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Learning Objective
Describe marketing uses of branding.

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Brand

A name, term, symbol, design, or combination thereof that identifies a sellers products and differentiates them from competitors products.

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Branding
Brand Name Brand Mark Brand Equity Master Brand
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That part of a brand that can be spoken, including letters, words, and numbers. The elements of a brand that cannot be spoken.

The value of company and brand names. A brand so dominant that it comes to mind immediately when a product category, use, attribute, or benefit is mentioned.
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Benefits of Branding
Branding distinguishes products from competition
Product Identification Repeat Sales

New Product Sales

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An Effective Brand Name

Is easy to pronounce Is easy to recognize and remember

Is short, distinctive, and unique

Describes the product, use, and benefits Has a positive connotation Reinforces the product image Is legally protectable
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Master Brands
Baking Soda Adhesive Bandages Rum Gelatin Soup Cream Cheese Arm & Hammer Band-Aid Bacardi Jell-O Campbells Philadelphia

Crayons Petroleum Jelly

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Crayola Vaseline
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Branding Strategies
Brand No Brand

Manufacturers Brand

Private Brand

Individual Brand

Family Brand

Combination

Individual Brand

Family Brand

Combination

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Generic Brand

A no-frills, no-brand-name, low-cost product that is simply identified by its product category.

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Manufacturers Brands Versus Private Brands

Manufacturers Brand

The brand name of a manufacturer.

Private Brand

A brand name owned by a wholesaler or a retailer.

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Advantages of Manufacturers Brands

Develop customer loyalty
Attract new customers Enhance prestige Offer rapid delivery, can carry less inventory

Ensure dealer loyalty

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Advantages of Private Brands

Earn higher profits
Less pressure to mark down prices Manufacturer may drop a brand or become a direct competitor to dealers Ties to wholesaler or retailer

No control over distribution of manufacturers brands

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Individual Brands Versus Family Brands

Individual Brand
Using different brand names for different products.

Family Brand

Marketing several different products under the same brand name.

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Cobranding
Types of Cobranding

Ingredient Branding Cooperative Branding

Complementary Branding

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Trademarks
A Trademark is the exclusive right to use a brand

Many parts of a brand and associated symbols qualify for trademark protection The mark has to be continuously protected Rights continue for as long as it is used
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Learning Objective
Describe marketing uses of packaging and labeling.

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Packaging
Contain and Protect

Promote Facilitate Storage, Use, and Convenience Facilitate Recycling

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Functions of Packaging

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Labeling
Persuasive
Focuses on promotional theme Information is secondary

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Informational
Helps make proper selections Lowers cognitive dissonance Includes use/care
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Universal Product Codes

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

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Learning Objective

Discuss global issues in branding and packaging.

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Global Issues in Branding
One Brand Name Everywhere

Global Options for Branding

Adaptations & Modifications

Different Brand Names for Different Markets

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Global Issues in Packaging
Labeling

Global Considerations for Packaging

Aesthetics

Climate Considerations
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Learning Objective

Describe how and why product warranties are important marketing tools.

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Product Warranties
Warranty
Express Warranty Implied Warranty
A confirmation of the quality or performance of a good or service.

A written guarantee.
An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)

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Product Warranties
Express Warranty

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Written Guarantee

Warranties

Implied Warranty
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Unwritten Guarantee

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