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UNIVERSITY OF GUYANA MARKETING 1101…..PRODUCT MODULE 6

UNIVERSITY OF GUYANA MARKETING 1101…..PRODUCT MODULE 6. ERIC M. PHILLIPS (MBA, CTP, BSc. Eng.) SEPT-DECEMBER 2013. MODULE OUTLINE. What is a product? Product versus Brand Product Life cycle Product Management. WHAT IS A PRODUCT ?.

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UNIVERSITY OF GUYANA MARKETING 1101…..PRODUCT MODULE 6

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  1. UNIVERSITY OF GUYANAMARKETING 1101…..PRODUCT MODULE 6 ERIC M. PHILLIPS (MBA, CTP, BSc. Eng.) SEPT-DECEMBER 2013

  2. MODULE OUTLINE • What is a product? • Product versus Brand • Product Life cycle • Product Management

  3. WHAT IS A PRODUCT ? • A product is anything that can offered to market for attention, acquisition , use , consumption that might satisfy a want or need.

  4. WHAT IS A PRODUCT? Goods(physical and tangible things) Ideas (Say no to drugs) Services (intangible, airlines, hotels) Information(universities) Organizations (favorable image) Experiences (Theme Parks) Properties (real estate) Places (Tourism, Guyana) Events (Shows, Olympics) Persons (Celebrities)

  5. PRODUCTS Tangible products Intangible products SEVICES GOODS

  6. FEATURES OF PRODUCT Tangibility Associated attributes Intangible attributes Features of product Customer satisfaction Exchange value

  7. LEVELS OF A PRODUCT Unexpected features Luxury features Expected features Basic features Basic product

  8. CONSUMER ADOPTION PROCESS Adopt Trail Evaluation Interest Awareness

  9. CONSUMER ADOPTION PROCESS Potential product Augmented product Expected Product Generic product Core Benefit

  10. CLASSIFYING PRODUCTS Durable products Consumer products Business products

  11. DURABLE PRODUCTS • Durable • Non-durable • Services

  12. Convenience Products Specialty Products Shopping Products CONSUMER PRODUCTS Unsought Products . . To satisfy information needs & buying motives

  13. CONVENIENCE GOODS CONVENIENCE GOODS – CONSUMERS USE MINIMAL EFFORT FOR FREQUENTLY PURCHASED LOW COST ITEMS • Staples • Emergency goods • Impulse purchases

  14. SHOPPING PRODUCTS SHOPPING GOODS - CONSUMERS MAKE A CONSIDERABLE EFFORT TO EVALUATE Consumers make product comparison(s), They seek information before purchase, they are not impulsive Moderate substitutions are made Product’s last a considerable time Monetary & social costs may be highigh

  15. BUSINESS PRODUCTS • Materials and parts Raw materials and parts Manufactured materials and parts • Capitals items Equipment • Suppliers and business services Maintenance and repair items Operating supplies

  16. RAW MATERIALS • Farm products • Natural products

  17. MANUFACTURED MATERIALS AND PARTS

  18. PRODUCT MIX Width Length Depth Consistency

  19. PRODUCT MIX THE ASSORTMENT OF PRODUCTS THAT A COMPANY OFFERS TO A MARKET • Width – how many different product lines? • Length – the number of items in the product mix • Depth – The number of variants offered in a product line • Consistency – how closely the product lines are related in usage

  20. PRODUCT LINE & PRODUCT MIX Product Line • LAMPS • Table • Ceiling • Track • Desk

  21. PRODUCT MIX Product Line 1 Product Line 2 Product Line 3 • TABLES • Kitchen • Dining Room • End • Coffee • Outdoor • Conference • Computer • CHAIRS • Dining Room • Living Room • Bedroom • Outdoor • Desk • LAMPS • Table • Ceiling • Track • Desk

  22. Product vs. Brand A product is something that is made in a factory A brand is something that is bought by a customer. A brand is unique. A product can be copied by a competitor. A product can be quickly outdated. A successful brand is timeless.

  23. WHAT IS A BRAND? • A set of product perceptions by the consumer. • It is a personality developed over time. • A brand signifies a relationship with the customer. • It is the company’s most valuable asset. It’s also the main differentiator, the best defense against price competition, and the key to customer loyalty. • Competitors can copy your features and benefits, but they can’t steal your brand. • It’s a promise. But it must be backed up by performance.

  24. WHAT IS A BRAND ? • It’s the company’s definition of what they have to offer. • A brand is a product that has a personality. • A promise to the customer. • What the customer knows about your specific product. It’s your image. • How the company or product is perceived?

  25. BRAND • A name becomes a brand when consumers associate it with a set of tangible and intangible benefits that they obtain from the product or service • It is the seller’s promise to deliver the same bundle of benefits/services consistently to buyers

  26. BRAND EQUITY • When a commodity becomes a brand, it is said to have equity. • The premium a brand can command in the market • The difference between the perceived value and the intrinsic value

  27. BRAND EQUITY – COMPETITIVE ADVANTAGES • Reduced marketing costs • Trade leverage • Can charge a higher price • Can easily launch brand extensions • Can take some price competition

  28. BRAND POWER • Customer will change brands for price reasons • Customer is satisfied. No reason to change. • Customer is satisfied and would take pains to get the brand • Customer values the brand and sees it as a friend • Customer is devoted to the brand

  29. UMBRELLA BRAND • Products from different categories under one brand • Dangerous to the brand if the principal brand fails • Sometimes the company name is prefixed to the brand. In such cases the company name gives it legitimacy. The product name individualizes it.

  30. BRAND IDENTIFICATION Batteries: DieHard contains a promise of long use. Sears has Craftsman, DieHard, Homart and Kenmore. 2.Mercedes promises well-built, prestigious, safety, performance. 3.Co branding/Dual branding: "Intel inside."

  31. WHAT IS A BRAND? & BRAND IDENTIFICATION • 4.Need to keep it fresh. Look at Coca-Cola. • Its image is as fresh today as when it started. It’s not luck. It’s careful nurturing and development of the brand. • Can exploit brand equity with brand extensions, if there is value. More Examples: 5.Look at licensing. Need control over who uses your brand. Sunkist. Why? Lowers marketing costs, greater trade leverage, can charge higher price, defense against price competition, more easily launch line extensions.

  32. WHAT IS A BRAND? & BRAND IDENTIFICATION • Salt is in bright-colored packages. • Oranges are marked. Labeled. A guarantee of quality. • BMW paid $60 million for the Rolls Royce name. Nothing else. • A brand can convey: Attributes + Benefits + Values + Culture + Personality • Seller’s promise to deliver a specific set of features. • Brand equity is the value a brand adds to the product.

  33. BRAND REPOSITIONING This may be required after a few years to face new competition and changing customer preferences

  34. PORSHE VERSUS LEXUS Porsche is positioned on the basis of performance and freedom.

  35. MARKET SEGMENTATION Levels Of Marketing Segmentation Mass Marketing Segment marketing Niche Marketing Micro-marketing Complete segmentation No Segmentation

  36. PACKAGING

  37. PACKAGING • Includes the activities of designing and producing the container for a product • Packaging is done at three levels - primary - secondary - shipping

  38. PACKAGING AS A MARKETING TOOL • Self service • Consumer affluence • Company and brand image • innovation

  39. DESIGNING PACKAGING • Packaging concepts • Technical specifications • Engineering tests • Visual tests • Dealer tests • Consumer tests • Packaging innovations • Environmental considerations

  40. LABELS • Identification • Grade classification • Description of product • Manufacturer identity • Date of mfg., batch no. • Instructions for use • Promotion

  41. LABELS AS A MARKETING TOOL Labels need to change with time or packaging changes to give it a contemporary and fresh look

  42. PRODUCT LIFE CYCLE

  43. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX • The Stages of the Product Life Cycle: • Development • Introduction/Launch • Growth • Maturity • Saturation • Decline • Withdrawal

  44. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX Sales Development Introduction Growth Maturity Saturation Decline Time

  45. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX • Introduction/Launch • Advertising and promotion campaigns • Target campaign at specific audience? • Monitor initial sales • Maximise publicity • High cost/low sales • Length of time – type of product

  46. Product Life Cycles and the Boston Matrix • Growth: • Increased consumer awareness • Sales rise • Revenues increase • Costs - fixed costs/variable costs, profits may be made • Monitor market – competitors reaction?

  47. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX • Maturity: • Sales reach peak • Cost of supporting the product declines • Ratio of revenue to cost high • Sales growth likely to be low • Market share may be high • Competition likely to be greater • Price elasticity of demand? • Monitor market – changes/amendments/new strategies?

  48. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX • Saturation: • New entrants likely to mean market is ‘flooded’ • Necessity to develop new strategies becomes more pressing: • Searching out new markets: • Linking to changing fashions • Seeking new or exploiting market segments • Linking to joint ventures – media/music, etc. • Developing new uses • Focus on adapting the product • Re-packaging or format • Improving the standard or quality • Developing the product range

  49. PRODUCT LIFE CYCLES AND THE BOSTON MATRIX • Decline and Withdrawal: • Product outlives/outgrows its usefulness/value • Fashions change • Technology changes • Sales decline • Cost of supporting starts to rise too far • Decision to withdraw may be dependent on availability of new products and whether fashions/trends will come around again?

  50. THE BOSTON MATRIX Market Growth High Market Share Low High

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