MKTG

1. MKTG Lamb, Hair, McDaniel 2008-2009 9 CHAPTER Product Concepts Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University

2. Learning Outcomes Define the term product Classify consumer products Define the terms product item, product line, and product mix Describe marketing uses of branding LO1 LO2 LO3 LO4

3. Learning Outcomes Describe marketing uses of packaging and labeling Discuss global issues in branding and packaging Describe how and why product warranties are important marketing tools LO5 LO6 LO7

4. Everything, both favorable and unfavorable, that a person receives in an exchange. • Tangible Good • Service • Idea What Is a Product? Product LO1

5. Product Price Promotion Place (Distribution) What Is a Product? Product is the starting point of Marketing Mix LO1

6. Product • Good • Service • Idea REVIEW LEARNING OUTCOME LO1 Define the term product

7. Business Product A product used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other consumers. Consumer Product A product bought to satisfy an individual’s personal needs or wants Types of Products LO2

8. Products Consumer Products Business Products Convenience Products Shopping Products Specialty Products Unsought Products Types of Consumer Products LO2

9. Increase market share among existing customers Convenience Product A relatively inexpensive item that merits little shopping effort Shopping Product A product that requires comparison shopping, because it is usually more expensive and found in fewer stores Attract new customers to existing products Specialty Product A particular item for which consumers search extensively and are reluctant to accept substitutes Create new products for present markets Market Development Diversification A product unknown to the potential buyer or a known product that the buyer does not actively seek Unsought Product Introduce new products into new markets Types of Consumer Products LO2

10. REVIEW LEARNING OUTCOME LO2 Consumer Products

11. Product Items, Lines, and Mixes Product Item A specific version of a product that can be designated as a distinct offering among an organization’s products. Product Line A group of closely-related product items. Product Mix All products that an organization sells. LO3

12. Campbell’s Product Lines and Mix LO3 { }

13. Benefits of Product Lines Advertising Economies Package Uniformity Standardized Components Efficient Sales andDistribution Equivalent Quality LO3

14. Product Mix Width LO3 Product MixWidth • The number of product lines an organization offers. • Diversifies risk • Capitalizes on established reputations

15. Product Line Depth LO3 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

16. Adjustments Adjustments to Product Items,Lines, and Mixes Product Modification ProductRepositioning Product Line Extension or Contraction LO3

17. Types of Product Modifications LO3 Quality Modification Functional Modification Style Modification

18. Planned Obsolescence PlannedObsolescence The practice of modifying products so those that have already been sold become obsolete before they actually need replacement. LO3

19. Repositioning Why reposition established brands? Changing Demographics Declining Sales Changes in Social Environment LO3

20. Product Line Extension Product Line Extension Adding additional products to an existing product line in order to compete more broadly in the industry. LO3

21. 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 LO3

22. REVIEW LEARNING OUTCOME LO3 Product item, product line, and product mix

23. Brand Brand A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products. LO4

24. Brand Name That part of a brand that can be spoken, including letters, words, and numbers Brand Mark The elements of a brand that cannot be spoken Brand Equity The value of company and brand names GlobalBrand A brand where at least 20 percent of theproduct is sold outside its home country Branding LO4

25. Product Identification Repeat Sales New Product Sales Benefits of Branding LO4

26. Top Ten Global Brands LO4

27. Brand No Brand Manufacturer’s Brand Private Brand IndividualBrand Family Brand Combi-nation IndividualBrand Family Brand Combi-nation Branding Strategies LO4

28. A no-frills, no-brand-name, low-cost product that is simply identified by its product category. Generic Brand Generic Product LO4

29. Manufacturers’ Brands VersusPrivate Brands Manufacturers’ Brand The brand name of a manufacturer. Private Brand A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand. LO4

30. Advantages of Manufacturers’ Brands • Heavy consumer ads by manufacturers • Attract new customers • Enhance dealer’s prestige • Rapid delivery, carry less inventory • If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer LO4

31. Advantages of Private Brands • Earn higher profits on own brand • Less pressure to mark down price • Manufacturer can become a direct competitor or drop a brand/reseller • Ties customer to wholesaler or retailer • Wholesalers and retailers have no control over the intensity of distribution of manufacturers’ brands LO4

32. Individual Brands Versus Family Brands Individual Brand Using different brand names for different products. Marketing several different products under the same brand name. Family Brand LO4

33. IngredientBranding Types of Cobranding Cooperative Branding Complementary Branding http://www.bose.com Online Cobranding LO4

34. A Trademark is the exclusive right to use a brand. Trademarks • Many parts of a brand and associated symbols qualify for trademark protection. • Trademark right comes from use rather than registration. • The mark has to be continuously protected. • Rights continue for as long as the mark is used. • Trademark law applies to the online world. TM LO4

35. REVIEW LEARNING OUTCOME LO4 Marketing Uses of Branding

36. Contain and Protect Promote Facilitate Storage, Use, and Convenience Facilitate Recycling http://www.levesquedesign.com/ http://www.design4packaging.com Online Functions of Packaging LO5

37. Persuasive Informational • Focuses on promotional theme • Consumer information is secondary • Helps make proper selections • Lowers cognitive dissonance • Includes use/care http://www.fda.gov Online Labeling LO5

38. Universal Product Codes (UPCs) A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products. Universal Product Codes LO5

39. REVIEW LEARNING OUTCOME LO5 Packaging and Labeling

40. Global Issues in Branding One Brand NameEverywhere Global Options for Branding Adaptations & Modifications Different Brand Names in Different Markets LO6

41. Global Issues in Packaging Labeling Global Considerations for Packaging Aesthetics Climate Considerations LO6

42. Branding Choices: 1 name Modify or adapt 1 name Different names in different markets Packaging Considerations: Labeling Aesthetics Climate REVIEW LEARNING OUTCOME LO6 Global Issues in Branding and Packaging

43. Warranty A confirmation of the quality or performance of a good or service. Express Warranty A written guarantee. Implied Warranty An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC) Product Warranties LO7

44. REVIEW LEARNING OUTCOME LO7 Product Warranties Express warranty = written guarantee Implied warranty = unwritten guarantee