P roduct Concept

1. Product Concept by SuwattanaSawatasuk

2. What is a product? • Product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need • Service: any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything

3. Classification of Products A product bought by individuals and organizations for further processing or for use in conducting a business Products A product bought by final consumer for personal consumption Consumer products Business (Industrial) products Convenience products Shopping products Specialty products Unsought products

4. Type of Consumer Products • Convenience product: a product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort • Shopping product: a product that customers, in process of selection and purchase, usually compares on such bases as suitability, quality, price, and style • Specialty product: a product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort • Unsought product:a product unknown to the potential buyer, or a known product that the buyer does not actively seek

6. Product and Service Decisions 1 2 3 4 5 Product attributes Branding Packaging Labeling Product support services

7. Product and Service Decisions (con’t) • Product & Service Attributes • Product quality: the characteristics of a product/service that bear on its ability to satisfy stated or implied customer needs • Product features: a competitive tool for differentiating the company’s product from competitors’ products, being the first producer of new feature is one of the most effective way to compete • Product style and design: • Design is a larger concept than style, it goes to the very heart of a product. Good design contributes to a product’s usefulness as well as its look. • Style simply describes the appearance of a product. Good style might grab attention, but it doesn’t necessarily make the product perform better Product designers should think more on how customer will use and benefit from the product

8. Product and Service Decisions 2 Product attributes Branding Packaging Labeling Product support services

9. Product and Service Decisions (con’t) • Branding Brand is a name, term, sign, symbol, design, or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors • Brand name: that part of a brand can be spoken, including letters, words, and numbers • Brand mark: the elements of a brand that cannot be spoken • Brand equity: the value (awareness, perceived quality, and brand loyalty) of company and brand names Global brand: a brand where at least one-third of the product is sold outside its home country or region

10. Benefits of Branding Customer view brand as an important part of product and branding can add value to a product • Branding help buyers identify products that might benefit them • Brand also say something about product quality and consistency • Brand name becomes the basis on which the whole story can be built about a product’s special qualities • Brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors • Branding helps the seller to segment markets i.e. Toyota Motor Corp. can offer the major Lexus, Toyota, and Scion brands, each with numerous sub-brands—such as Camry, Prius, Matrix, Yaris, Tundra, Land Cruiser, and others—not just 1 general product for all consumers

11. Characteristics of Good Brand Name • The name should readily come of the minds of customers. It should be easy to pronounce. • The name should be easy to read and understand. • The name should be appropriate for the product. • It should be easy to remember. • It should, as far as possible, be most descriptive in nature. http://www.freemba.in/articlesread.php?artcode=2264&substcode=95&stcode=1

12. Top Ten Global Brands • Coca-Cola • Microsoft • IBM • GE • Nokia • Toyota • Intel • McDonald’s • Disney • Mercedes-Benz Source: the August 6, 2007 issue of ‘Business Week’

13. Building Strong Brands Brand Positioning Attributes Benefits Beliefs and Values Brand Name Selection Selection Protection Brand Sponsorship Manufacturer’s brand Private brand Licensing Co-branding Brand Development Line extensions Brand extensions Multibrands New brands Marketers need to position their brands clearly in target customers’ mind and should establish a mission for the brand and vision of what the brand must be and do

14. Building Strong Brands (con’t) Brand Positioning Attributes Benefits Beliefs and Values Brand Name Selection Selection Protection Brand Sponsorship Manufacturer’s brand Private brand Licensing Co-branding Brand Development Line extensions Brand extensions Multibrands New brands To select brand name, marketers need to review carefully on the product & benefits, target market, and proposed marketing strategies. Then also need to protect the brand by present it with the registered trademark symbol

15. Building Strong Brands (con’t) Brand Positioning Attributes Benefits Beliefs and Values Brand Name Selection Selection Protection Brand Sponsorship Manufacturer’s brand Private brand Licensing Co-branding Brand Development Line extensions Brand extensions Multibrands New brands Manufacturer’s brand (National): Sony, Kellogs Private brand (Store or distributor): resellers create the brand themselves Licensing: some firm license name or symbols previously created by other manufacturers i.e. cartoon characters Co-branding: 2 firms join forces and co-brand a product i.e. financial services firms often partner with other companies to create co-branded credit cards

16. Building Strong Brands (con’t) Brand Positioning Attributes Benefits Beliefs and Values Brand Name Selection Selection Protection Brand Sponsorship Manufacturer’s brand Private brand Licensing Co-branding Brand Development Line extensions Brand extensions Multibrands New brands Product Category Brand Name

17. Brand Development Strategies Product Category • Line extension: extending and existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category • Brand extension: extending brand name to new product categories • Multibrand: introducing additional brands in the same category of company • New brand: creating new brand name Brand Name

18. Product and Service Decisions 3 Product attributes Branding Packaging Labeling Product support services

19. Product and Service Decisions (con’t) • Packaging Packaging: the activities of designing and producing the container or wrapper for a product

20. Levels of Packaging • Primary package: the package that wrap or contain the actual product • Secondary package: the package that wrap the primary package to attract the customer’s eyes or for convenience in the display location i.e. shelf • Shipping package: the package that create for convenience in product distribution or shipping

21. Product and Service Decisions 4 Product attributes Branding Packaging Labeling Product support services

22. Product and Service Decisions (con’t) • Labeling • Label identifies the product or brand. • Label might also describe several things about the product e.g. who made it, where it was made, when it was made, its contents, how it is to be used, and how to use it safely • Label might help to promote the brand, support its positioning, and connect with customers

23. Samples of Labels Nutritional label Price unit Shelf life

24. 2 forms of labeling • Persuasive labeling A type of package labeling that focuses on a promotional theme or logo with consumer information being secondary • Information labeling A type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after purchase. The product information might include durability, color, features, cleanability, care instructions, construction standard, nutrition, features, and etc.

25. Universal Product Codes (UPC) • A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products on customer purchases records, inventories control, or sales.

26. Product and Service Decisions 5 Product attributes Branding Packaging Labeling Product support services

27. Product and Service Decisions (con’t) • Product Support Services • Customer service is another element of product strategy. • For example, Hewlett-Packard (HP) offers a complete set of sales and after-sale services. It promises “HP Total Care, the expert help for every stage of your computer’s life from choosing it all the way to recycling it”

28. Product warranties • A warranty protects the buyer and gives essential information about the product. It confirms the quality or performance of a good or service.

29. Product Line Decisions • Product line: a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. • Major product line decision: • Product line length: the number of items in the product line • Product line expansion: • Line filling: adding more item within the present range of line to reach extra profits, satisfy dealers, being the leading full-line company • Line stretching: firm extends the product line beyond its current range downward or upward to plug a market hole or to acquire the faster growth

30. Line Stretching • Honda stretched downward by adding Honda Fit to its line to serve consumer demand in new-generation minicar segment • Many Japanese auto companies stretched upward in order to add prestige to their current products by introducing an upmarket automobile many years ago

31. Product Mix Decisions • Product mix (or product portfolio): the set of all product lines and items that a particular seller offers for sale • Example: Sony’s diverse portfolio consists of 4 primary product businesses worldwide • Sony Electronics (cameras, camcorders, computers, TV, home entertainment products, mobile electronics) • Sony Computer Entertainment (games) • Sony Picture Entertainment (movies, TV shows, music, DVDs) • Sony Financial Services (life insurance, banking, and other offerings) • For each business consists of several product lines

32. Dimensions of Product Mix • Width: the number of different product linesthe company carries • Length: the total number of items(brands) the company carries within its product lines • Depth: the number of versions offered of each product in the line (or product items SKU: Stock Keeping Unit) • Consistency: how closely related the various product lines are in end use, production requirements, distribution channels, or some other ways.

33. Thai Ha Public Company Limited Product Mix Width (breadth) = 5 Product Length = 8 Length = 2 Depth = 9 Length = 1 Depth = 10 Length = 2 Depth = 10 Length = 1 Depth = 2 Length = 2 Depth = 4