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What is a Product?

What is a Product?.

Solomon
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What is a Product?

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  1. What is a Product? Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.Physical Products: Tide, Ford, ChevyServices: Haircuts, Nails, Travel PlanningPersons: Presidents, Stars, AnnouncersPlaces: Vacation Spots, States, Cities Events: Olympics, Concerts Organizations: Red Cross, Heart Association.Idea: Healthy Food, Exercise

  2. A Product in Three Levels: Actual Product AugmentedProduct CoreProduct Scott Smith

  3. The Core Product • Core Product: What is the buyer really buying? .... Core benefits, Problem Solving services. • Examples:Lipstick....... Beauty, Hope, not lip colorDrill Bit ...... A finished project, 1/4” Hole, but not a bit

  4. The Actual Product Product Attributes: Quality Level: Lexus.... Features: Sunroof, Walnut Trim,... Styling: Sleek, Sporty Brand Name: Lexus Packaging: Style and Grace Scott Smith

  5. Augmented Product • Consists of Additional Consumer Services and Benefits....Augmented benefits may become expected benefits Camcorder: Complete solution to picture-taking problems. Warranty on parts and workmanship, Instruction on how to use camcorder, Toll free number for questions and problems Haircut: Doctor’s Exam: few tangible featuresPark Lane Hotel, Hong Kong: Candy on hotel pillow, basket of fruit, manager escorts you to room, Pillbox hat white uniforms, messaging service (printed and voice), toiletries.Perfume: Fantasy, memories, hopes, dreams, romance, passion, femininity, success, life style, self-expression, exclusivity

  6. Durable Goods:Products used over an extended period of time: Refrigerators, Autos, Furniture NonDurable GoodsConsumed in one or a few uses:Soap, Salt, food products Services:Activities, benefits or satisfactions for sale:Haircuts, repairs Consumer GoodsGoods and services consumers buy frequently, immediately, with a minimum of comparison or buying effort:Convenience GoodsShopping GoodsSpecialty GoodsUnsought Goods Product Classifications

  7. Consumer Goods • Convenience GoodsStaple Goods: Heinz Ketchup, Crest Impulse Goods: Twinkies, Candy bars Emergency Goods: Umbrella, boots • Shopping goods: Goods that are compared based on suitability, quality, price, style. Furniture, Clothing, Cars, Major Appliances • Specialty Goods: Consumer goods with unique characteristics or brand identification for which a significant group of buyers are willing to make a special purchase effort: Jaguar, Lexus, Rolex • Unsought goods: Consumer goods the consumer does not know about or does not normally think about buying: Life Insurance, encyclopedias

  8. How Do You Best Obtain a Sustainable Competitive Advantage? • Reputation for Quality • Customer Service / Product Support • Name Recognition / High Profile

  9. Achieving a Sustainable Competitive Advantage • Achieve differentiation in the product delivery attributes:Price, Quality, Aesthetics, Functionality, Availability, Consumer Awareness, Visibility, Service • Achieve differentiation on the key buying attributes:1, 2, or 3 attributes may be critical... Others are marginalLaptop: Battery Life, Physical Profile, Power • Achieve breadth of attraction and depth of preference • Achieve Capability GapBusiness Systems GapPositioning Gaps: Reputation, Consumer Awareness, CapabilityRegulatory / Legal GapOrganizational / Managerial Gap

  10. What is Brand Equity? Perceived Quality Name Brand Awareness Associations Brand Other Loyalty Proprietary Brand Assets Brand Equity Provides Value to Customer Provides Value to Firm * Interpretation of Info. * Efficient/Effective Mkt. * Confidence in Decision * Brand Loyalty * Use Satisfaction * Brand Extensions * Trade Leverage * Competitive Advantage

  11. Branding Definitions • A Brand is: name, term, sign, symbol, design, or combination of these intended to identify the good or service, and differentiate them from those of competitors • Brand Name: The vocalized part of the brand... Tide, Avon, Chevrolet, Disneyland, AMEX • Brand mark: The symbol, design, color, letters: Pillsbury doughboy, MGM Lion, K on Kodak box • Trademark: The part of the brand given legal protection to brand name or brand mark • Copyright: Legal right to reproduce, publish and sell the matter and form of a literary musical or artistic work.

  12. Branding Decisions:Family Brands • Individual Brand Names P&G (Tide, Crest, Folger’s Pampers)General Mills (Bisquick, Gold Medal, Betty Crocker, Nature Valley, Yoplait) • Blanket Family Name for all productsHeinz and General Electric • Separate family names for all productsSears (Kenmore, Craftsman, Homart) • Company trade name combined with individual product namesKellogg’s (Corn Flakes, Rice Krispies, Raisin Bran)

  13. Brand Decisions • Brand Extension: Use successful brand name to launch new or modified products: Ivory: dishwashing detergent, hand soap, shampooFruit of the Loom: Socks, fashion underwear, women's underwearHonda: LawnmowersScott Paper Co.: ScotTowels, ScotTissues, Scotkins, BabyScott diapers... tough competition from Charmin, Bounty, Kleenex, Pampers • Multibrand:Multiple brands in the same product category: P&G Cheer vs. TideGM: Capture brand switchers using multiple brands • Brand Repositioning:Change both the product and image: Ivory Soap: “Baby Soap” to “All Natural Soap” Marlboro: women’s cigarette to man’s cigaretteVelveeta: “Cooking Cheese to “Good tasting, natural and nutritious” • Brand Names:(1) Suggest qualities, benefits: Beautyrest, Craftsman, Sunkist, Spic and Span, Mr.. Clean, (2) Easy to pronounce, recognize and remember: Tide, Aim(3) Distinctive brand name: Taurus, Kodak, Exxon, IBM, Xerox(4) Translate easily into foreign languages: (5) Capable of registration and legal protection (Miller Lite refused)

  14. Individual Product Decisions • Product Attribute Decisions:Product Quality: At Ford, Quality is Job #1Product Features: Strip down vs full featured. What features improve the product?Product Design Black and Decker cordless tools, Steelcase furniture Bose audio equipment Herman Miller furniture

  15. Product Line Decisions • Product Line Length: (Full Vs. Incomplete line) Expanded by Product Line Stretch and FillingStretch: Upward, Downward, Two-way Examples: Marriott: Marquis, Courtyard,Fairfield Inn,Residence InnProduct Line Fill:Sony Walkmans:Solar PoweredWaterproofUltralightTape, CD, MD, MP3 New Products High Upward PresentProducts Price: New Products Downward Low Low High Quality

  16. Product Line Decisions • Product Line Breadth, Length, Depth,ConsistencyBreadth: Number of different product lines: Avon: cosmetics, jewelry, fashions, household itemsLength: total number of items the company carries(many different brands: Tide, Joy, Dash, Gain)Depth: number of versions offered of each product in the line Crest: many formulations and sizesConsistency: Closeness of end use, production requirements, distribution channels

  17. Product Mix Breadth and Length Product Mix Breadth Example: Product Gamble: Length is 42

  18. Advertising Hierarchy of Effects Model Awareness - Interest - Desire - Action Unaware Purchase - Loyalty

  19. Product - Market Strategies An Overview Existing Product New Product Existing Market Market Product Development Development New Market Market Diversification Segmentation

  20. Elapsed Time From Idea to Introduction Product Idea Test Market Launch Time BirdsEye Froz. 1908 1923 15 Yrs. Ban Roll-On 1948 1954 6 Yrs. Crest 1945 1955 1956 10 Yrs. Gerber B.Food 1927 1928 1 Yr. Luster Creme 1950 .. 1958 8 Yrs. Hills Bros.Inst 1934 1956 22 Yrs. Maxim FreezeDC 1954 1964 10 Yrs. Stripe T.P. 1952 1957 1958 6 Yrs. Minute Rice 1931 1949 18 Yrs.

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