Product Concepts

1. Product Concepts 8 chapter Prepared by Deborah Baker Texas Christian University Chapter 8 Version 3e

2. Learning Objectives • 1. Define the term product. • Classify consumer products. • 3. Discuss the importance of services to the economy • Identify the differences between services and goods. • 5. Explain why services marketing is important to manufacturers 8 chapter Chapter 8 Version 3e

3. Learning Objectives (continued) 6. Define the terms product item, product line, and product mix 7. Describe marketing uses of branding 8. Describe marketing uses of packaging and labeling. 9. Describe how and why product warranties are important marketing tools. 8 chapter Chapter 8 Version 3e

4. 1 Learning Objective Define the term product. Chapter 8 Version 3e

5. 1 Product Everything, both favorable and unfavorable, that a person receives in an exchange. Chapter 8 Version 3e

6. Product isthe “heart” ofMarketing Mix Price Promotion Place (Distribution) 1 What is a Product? Chapter 8 Version 3e

7. 2 Learning Objective Classify consumer products. Chapter 8 Version 3e

8. 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 Product bought to satisfy an individual’s personal wants 2 Product Classifications Chapter 8 Version 3e

9. PRODUCTS Consumer Products Business Products Convenience Products Shopping Products Specialty Products Unsought Products 2 Types of Consumer Products Chapter 8 Version 3e

10. A relatively inexpensive item that merits little shopping effort. Convenience Product A product that requires comparison shopping, because it is usually more expensive and found in fewer stores. Shopping Product Specialty Product A particular item that consumers search extensively for and are reluctant to accept substitutes. Unsought Product A product unknown to the potential buyer or a known product that the buyer does not actively seek. 2 Types of Consumer Products Chapter 8 Version 3e

11. Convenience Products Shopping Products Specialty Products Unsought Products 2 Types of Consumer Products Chapter 8 Version 3e

12. 3 Learning Objective Discuss the importance of services to the economy. Chapter 8 Version 3e

13. 3 Service The result of applying human or mechanical efforts to people or objects. Chapter 8 Version 3e

14. 79% of workers are in service sector Services account for 76% of U.S. GDP Service occupations will be responsible for all job growth through 2005 3 The Importance of Services Chapter 8 Version 3e

15. 4 Learning Objective Discuss the differences between services and goods. Chapter 8 Version 3e

16. Intangibility Characteristics That Distinguish Services Inseparability Heterogeneity Perishability 4 How Services Differ from Goods Chapter 8 Version 3e

17. Intangibility Services that cannot be touched, seen, tasted, heard, or felt in the same manner as goods. Inseparability A characteristic of services that allows them to be produced and consumed simultaneously. Heterogeneity A characteristic of services that makes them less standardized and uniform than goods. Perishability A characteristics of services that prevents them from being stored, warehoused, or inventoried. 4 Characteristics of Services Chapter 8 Version 3e

18. 5 Learning Objective Explain why services marketing is important to manufacturers. Chapter 8 Version 3e

19. 5 Services Marketing in Manufacturing Services offer Competitive Advantage Chapter 8 Version 3e

20. 6 Learning Objective Define the terms product item, product line, and product mix. Chapter 8 Version 3e

21. 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. 6 Product Items, Lines, and Mixes Chapter 8 Version 3e

22. Width of the product mix Blades and Writing razors Toiletries instruments Lighters Mach 3 Series Paper Mate Cricket Sensor Adorn Flair S.T. Dupont Trac II Toni Atra Right Guard Swivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry Look Twin Injector Dry Idea Techmatic Brush Plus Depth of the product lines 6 Gillette’s Product Lines and Mix Chapter 8 Version 3e

23. Advertising Economies Package Uniformity Why Form Product Lines? Standardized Components Efficient Sales andDistribution Equivalent Quality 6 Benefits of Product Lines Chapter 8 Version 3e

24. 6 Product Mix Width The number of product lines an organization offers. • Diversifies risk • Capitalizes on established reputations Chapter 8 Version 3e

25. 6 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 Chapter 8 Version 3e

26. 6 Adjustments Adjustments to Product Items,Lines, and Mixes Product Modification Product Line Extension or Contraction ProductRepositioning Chapter 8 Version 3e

27. Quality Modification Types of Product Modifications Functional Modification Style Modification 6 Product Modifications Chapter 8 Version 3e

28. 6 Planned Obsolescence The practice of modifying products so those that have already been sold become obsolete before they actually need replacement. Chapter 8 Version 3e

29. Why reposition established brands? Changing Demographics Changes in Social Environment Declining Sales 6 Repositioning Chapter 8 Version 3e

30. 6 Product Line Extension Adding additional products to an existing product line in order to compete more broadly in the industry. Chapter 8 Version 3e

31. 6 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 Chapter 8 Version 3e

32. 7 Learning Objective Describe marketing uses of branding. Chapter 8 Version 3e

33. 7 Brand A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products. Chapter 8 Version 3e

34. 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. Master Brand A brand so dominant that it comes to mind immediately when a product category, use, attribute, or benefit is mentioned. 7 Branding Chapter 8 Version 3e

35. Product Identification New Product Sales Repeat Sales 7 Benefits of Branding Branding distinguishes products from competition Chapter 8 Version 3e

36. 7 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 Chapter 8 Version 3e

37. Baking Soda Arm & Hammer Adhesive Bandages Band-Aid Rum Bacardi Gelatin Jell-O Soup Campbell’s Cream Cheese Philadelphia Crayons Crayola Petroleum Jelly Vaseline 7 Master Brands Chapter 8 Version 3e

38. 7 Branding Strategies Brand No Brand Manufacturer’s Brand Private Brand IndividualBrand Family Brand Combi-nation IndividualBrand Family Brand Combi-nation Chapter 8 Version 3e

39. 7 Generic Brand A no-frills, no-brand-name, low-cost product that is simply identified by its product category. Chapter 8 Version 3e

40. Manufacturers’ Brand The brand name of a manufacturer. Private Brand A brand name owned by a wholesaler or a retailer. 7 Manufacturers’ Brands VersusPrivate Brands Chapter 8 Version 3e

41. 7 Advantages of Manufacturers’ Brands • Develop customer loyalty • Attract new customers • Enhance prestige • Offer rapid delivery, can carry less inventory • Ensure dealer loyalty Chapter 8 Version 3e

42. 7 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 Chapter 8 Version 3e

43. Individual Brand Using different brand names for different products. Family Brand Marketing several different products under the same brand name. 7 Individual Brands VersusFamily Brands Chapter 8 Version 3e

44. Types of Cobranding IngredientBranding Complementary Branding Cooperative Branding 7 Cobranding Chapter 8 Version 3e

45. 7 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 TM Chapter 8 Version 3e

46. 8 Learning Objective Describe marketing uses of packaging and labeling. Chapter 8 Version 3e

47. Contain and Protect Functions of Packaging Promote Facilitate Storage, Use, and Convenience Facilitate Recycling 8 Packaging Chapter 8 Version 3e

48. Persuasive Informational • Helps make proper selections • Lowers cognitive dissonance • Includes use/care • Focuses on promotional theme • Information is secondary 8 Labeling Chapter 8 Version 3e

49. 8 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. UPCs Chapter 8 Version 3e

50. 9 Learning Objective Describe how and why product warranties are important marketing tools. Chapter 8 Version 3e