Chapter 2 Product Offering Decisions PDF

Chapter 2 Product Offering Decisions BMPRABMX- Product and Brand Management Objectives: At the end of the lesson, the student would be able to: Define what the product is and its three components; Identify the different product characteristics and classifications; Describe product...

Chapter 2 Product Offering Decisions BMPRABMX- Product and Brand Management Objectives: At the end of the lesson, the student would be able to: Define what the product is and its three components; Identify the different product characteristics and classifications; Describe product and services differentiation; and Demonstrate the product life cycle and its stages. What is a product? In marketing terms, a product is anything that can be offered to a market to satisfy a want or need. In other words, a product is the item(s) or service(s) that you are offering your customers. A product can be a physical object or a service and may refer to a single item or unit, a group of equivalent products or a group of goods or services. Product Decisions Marketing mix describes how a business uses and manipulates the 4Ps to market its product. Businesses employ different strategies when marketing products compared to services. As a physical product, marketers need to consider the packaging, labeling, and branding involved in marketing the overall product. Products have 3 components: Core product – this is the end benefit for the buyer and answers the question: What is the buyer really buying? For example, the buyer of a car is buying a means of transport, the buyer of an aspirin is buying pain relief and the buyer of financial advice is hoping to buy financial security and peace of mind. Formal product – this is the actual physical or perceived characteristics of your product including its level of quality, special features, styling, branding and packaging. Augmented product – the support items that complete your total product offering such as after-sales service, warranty, delivery and installation. 3 components of product - Bing images Characteristics of Products Product attributes o Quality – the major tool in positioning your product. It encompasses two key elements: 1) quality level - how it is made or perceived, and 2) quality consistency - how it performs over its life. o Features – the physical or intrinsic characteristics of your product that contribute to the benefits it offers. o Design – a combination of how the product looks and how it performs. product attributes - Bing images Characteristics of Products Branding A brand is a name, term, sign, symbol, or design, or a combination of these elements that identifies the maker or seller of a product or service. Branding is an important part of a product and contributes to its personality and perceived value. The power of a brand cannot be underestimated – many people buy on the strength of brand alone with no regard for price or performance. Characteristics of Products Packaging The packaging incorporates the wrapper or container for your product. It serves to protect the product, ensuring it reaches the buyer in good condition, and also conveys the personality of your brand and important safety and statutory information. There are usually two levels of packaging: o the primary packaging containing each individual product (eg: a can); and o the secondary packaging which contains a number of products (eg:a carton).  Importance of Packaging different sample packaging of product ppt - Bing images Characteristics of Products Labelling Labelling incorporates all the written information about your product and usually takes the form of an adhesive sticker, a tie-on tag or a printed piece of packaging. Product Decisions | PDF | Brand | Marketing (scribd.com) Characteristics of Products Product positioning Product positioning is the way a product or service is seen by consumers and how they view its important attributes in relation to competitor‘s products. For instance a car can be positioned on the basis of style, performance, safety or economy whilst a computer might be positioned on the basis of speed, capacity, reliability Positioning Map Example - Bing images  Philip Kotler An economist and a marketing guru. According to him, a product is more than a tangible ‘thing’. A product meets the needs of a consumer and in addition to a tangible value this product also has an abstract value. Product Levels five products levels of kotler - Bing images  Product Levels Example: 1. Core Product - warm coat will protect you from the cold and the rain. 2. Generic Product - For a warm coat, this is about fit, material, rain repellent ability, high-quality fasteners, etc. 3. Expected product - That coat should be really warm and protect from the weather and the wind and be comfortable when riding a bicycle. 4. Augmented Product - warm coat in style, its color trendy and made by a well-known fashion brand; factors like service, warranty, and good value for money play a major role in this. 5. Potential Product – a warm coat that is made of a fabric that is as thin as paper and therefore light as a feather that allows rain to automatically slide down. Product Hierarchy 1. Need family The core need that underlines the existence of a product family. Let us consider computation as one of the needs. 2. Product family All the product classes can satisfy a core need with reasonable effectiveness. For example, all the products like computers, calculators, or abacus can do computation. Product Hierarchy 3. Product class A group of products within the product family is recognized as having a certain functional coherence. For instance, a personal computer (PC) is one product class. 4. Product line A group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same channels or fall within a given price range. For instance, a portable wire-less PC is one product line. Product Hierarchy 5. Product type A group of items within a product line that share one of several possible forms of the product. For instance, palm top is one product type. 6. Brand The name associated with one or more items in the product line is used to identify the source or character of the items. For example, Palm Pilot is one brand of palmtop. Product Hierarchy 7. Item/stock-keeping unit/product variant A distinct unit within a brand or product line is distinguishable by size, price, appearance, or some other attributes. For instance, LCD, CD- ROM drive and joystick are various items under palm top product type. What is a Product Differentiation? Product differentiation is a specific kind of business and marketing strategy. It focuses on a target market in which competitors already offer similar products or services. A company that uses product differentiation tries to create the perception among certain target customers that the company‘s version of this product or service is somehow different and thus has added value that is not available from competitors. Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) What is a Service Differentiation? is the design and delivery of a service to have unique and valuable characteristics relative to other services in the market. Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Differentiation (slideshare.net) Product Life Cycle and Its Stages The Concept Every product has a life cycle, just as in case of human beings. The term time used by Theodore Levitt in 1965 in Harvard Business Review article. A product after being introduced in to the market, goes through different stages which is categorized on the basis of product, profit, competition and market behaviors. PLC is a concept which indicates various stages of product’s sales and history. Product decision (slideshare.net) The Concept According to Philip Kotler “The product life-cycle is an attempt to recognize distinct stages in the sales history of the product.” According to Kollet, Blackwell Robeson, product life cycle is a “generalized model of sales and profit.” Product decision (slideshare.net) Product Life Cycle and Its Stages Product Life Cycle and Its Stages Product Life Cycle and Its Stages  Insights College of Business Administration GEETH01X – Business Ethics References: 3 components of product - Bing images product attributes - Bing images five products levels of kotler - Bing images different sample packaging of product ppt - Bing images Positioning Map Example - Bing images Product Differentiation (slideshare.net) Product Decisions | PDF | Brand | Marketing (scribd.com) Product decision (slideshare.net)