Principles of

Marketing
September -
2017
Products &
Services.
Módulo 05
Learning Objectives

Objective 1: Define product and describe the major classifications of

products and services.
Objective 2: Describe the decisions companies make regarding their
individual products and services, product lines, and product mixes.
Objective 3: Identify the four characteristics that affect the marketing
of services and the additional marketing considerations that services
require.
Canvas STP

The marketing mix is the set of

tools (4Ps) the firm uses to
implement its marketing
strategy. This set includes
product, price, promotion, and
place.
Marketing MIX
What Is a
Product?
What Is a Product?

Product
is anything that can be offered in a market for
attention, acquisition, use, or consumption that might
satisfy a need or want.

Service
is a product that consists of activities, benefits, or
satisfactions and that is essentially intangible and
does not result in the ownership of anything.
What Is a Product?
Product
What Is a Product?
Service
What Is a Product?
Products, Services, and Experiences

Products and services are becoming more

commoditized.

Companies are now creating and managing customer

experiences with their brands or company.
What Is a Product?
Products
What Is a Product?
experiences
What Is a Product?
experiences
What Is a Product?
experiences
What Is a Product?
Levels of Product and Services
What Is a Product?
Product and Service Classifications

Consumer products

Industrial products
What Is a Product?
Product and Service Classifications

Consumer products are products and services

bought by final consumers for personal consumption.

ü Convenience products
ü Shopping products
ü Specialty products
ü Unsought products
What Is a Product?
Consumer products
What Is a Product?
Consumer products
What Is a Product?
Product and Service Classifications

Convenience products are consumer products and

services that the customer usually buys frequently,
immediately, and with a minimum comparison and
buying effort.

ü Newspapers
ü Candy
ü Fast food
What Is a Product?
Convenience products
What Is a Product?
Product and Service Classifications

Shopping products are less frequently purchased

consumer products and services that the customer
compares carefully on suitability, quality, price, and
style.

ü Furniture
ü Cars
ü Appliances
What Is a Product?
Shopping products
What Is a Product?
Product and Service Classifications

Specialty products are consumer products and

services with unique characteristics or brand
identification for which a significant group of buyers is
willing to make a special purchase effort.

ü Medical services
ü Designer clothes
ü High-end electronics
What Is a Product?
Specialty products
What Is a Product?
Product and Service Classifications

Unsought products are consumer products that the

consumer does not know about or knows about but
does not normally think of buying.

ü Life insurance
ü Funeral services
ü Blood donations
What Is a Product?
Product and Service Classifications
What Is a Product?
Product and Service Classifications

Industrial products are those products purchased

for further processing or for use in conducting a
business.

ü Materials and parts

ü Capital items
ü Supplies and services
What Is a Product?
Industrial products
What Is a Product?
Industrial products
What Is a Product?
Product and Service Classifications

Materials and parts include raw materials and

manufactured materials and parts.

Capital items are industrial products that aid in the

buyer’s production or operations.

Supplies and services include operating supplies,

repair and maintenance items, and business services.
What Is a Product?
Organizations, Persons, Places, and Ideas

Organization marketing

Person marketing

Place marketing

Social marketing
What Is a Product?
Organizations, Persons, Places, and Ideas

Organization marketing consists of activities

undertaken to create, maintain, or change the
attitudes and behavior of target consumers toward an
organization.

Person marketing consists of activities undertaken

to create, maintain, or change the attitudes or
behavior of target consumers toward particular
people.
What Is a Product?
Organizations, Persons, Places, and Ideas

Place marketing consists of activities undertaken to

create, maintain, or change attitudes and behavior
toward particular places.

Social marketing uses commercial marketing

concepts to influence individuals’ behavior to improve
their well-being and that of society.
What Is a Product?
Individual Product and Service Decisions
Product and Service
Decisions
Individual Product and Service Decisions

Communicate and deliver benefits by product and service

attributes.

Quality
Features
Style and design
Product and Service
Decisions
Individual Product and Service Decisions

Product quality refers to the characteristics of a product or service

that bear on its ability to satisfy stated or implied customer needs.

Total quality management

Return-on-quality
Quality level
Performance quality
Conformance quality
Product and Service
Decisions
Individual Product and Service Decisions

Product Features

Competitive tool for differentiating a product from

competitors’ products

Assessed based on the value to the customer versus its cost to

the company
Product and Service
Decisions
Product Features Artistic Improved

Automatization
Basic Fickle
Interactive
Product and Service
Decisions
Individual Product and Service Decisions

Product Features

Style describes the appearance of the product.

Design contributes to a product’s usefulness as well as to its
looks.
Product and Service
Decisions
Individual Product and Service Decisions

Brand is the name, term, sign, or design or a combination of

these, that identifies the maker or seller of a product or service.
Product and Service
Decisions
Individual Product and Service Decisions

Packaging involves designing and producing the

container or wrapper for a product.

Labels identify the product or brand, describe attributes,

and provide promotion.
Product and Service
Decisions
Individual Product and Service Decisions

Packaging involves designing and producing the

container or wrapper for a product.

Labels identify the product or brand, describe attributes,

and provide promotion.
Product and Service
Decisions
Product Line Decisions

Product line is 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.
Product and Service
Decisions
Product Line Decisions

Product line length is the number of items in the

product line.

Line stretching
Line filling
Product and Service
Decisions
Product Line Decisions

Line stretching is an expanding strategy by a company

where the new products are launched in the same product
line but beyond the current product range with some
additional or different features.

Line filling ia business strategy that involves increasing

the number of products in an existing product line to take
advantage of marketplace gaps and reduce competition.
Customer Value
Concept of the product

For lovers of health, youth, sport and beauty, liquid based on fructose
concentrate, with microparticles of collagen that act as a natural
energizer, thanks to its advanced technology will allow you to feel
younger, increase the energy level in the body, be leaner and more
attractive every day.

It is the first drink with collagen in the market, contains less calories than
any similar product, is available in 3 flavors (Straw Berry Watermelon,
Green Thunder & Sweet Tea), you can buy it in individual packaging.
Differentiation and
Positioning
In terms of positioning, it is important to mention that FIX was conceived
with characteristic attributes that will be the key to the positioning of the
product in the market.

FIX is a natural energizer that provides Dynamism.

FIX introduces a new experience bringing the benefits of collagen into
a drink naturally; Geniality and Innovation.
Provides well-being, being a healthy and natural drink.
Differentiation and
Positioning
Differentiation and
Positioning
Exercise
Product

30 min
New Product
Development
Learning Objectives

Objective 1: Explain how companies find and develop new product

ideas.
Objective 2: List and define the steps in the new product development
process and the major considerations in managing this process.
Objective 3: Describe the stages of the product life cycle and how
marketing strategies change during a product’s life cycle.
Objective 4: Discuss two additional product issues: socially
responsible product decisions and international product and services
marketing.
New Product
Development
Explain how companies find and develop new product ideas.
New Product
Development
Ways to Obtain New Products

Acquisition refers to the buying of a whole company, a patent, or a

license to produce someone else’s product.

New product development refers to original products, product

improvements, product modifications, and new brands developed
from the firm’s own research and development.
New Product
Development
Ways to Obtain New Products

Acquisition
New Product
Development
Ways to Obtain New Products
New product development
New Product
Development
Defining the steps in the new product development process
and the major considerations in managing this process.

New Product Development Process

Managing New Product Development

New Product
Development
Major Stages in New Product Development

Product Ideas
New Product
Development
Idea Generation

Idea generation is the

systematic search for
new product ideas.

Sources of new product

ideas
Internal
External
New Product
Development
Ideas Generation

Internal sources refer to the company’s own formal

research and development, management and staff, and
intrapreneurial programs.

External sources refer to sources outside the company

such as customers, competitors, distributors, suppliers,
and outside design firms.
New Product
Development
Ideas Generation

Crowdsourcing involves inviting broad communities of

people—customers, employees, independent scientists
and researchers, and even the public at large—into the
new product innovation process.
New Product
Development
Idea Screening

Identify good ideas and drop poor ideas

R-W-W screening framework:

ü Is it real?
ü Can we win?
ü Is it worth doing?
New Product
Development
Concept Development and Testing

Product idea is an idea for a possible product that the company

can see itself offering to the market.

Product concept is a detailed version of the idea stated in

meaningful consumer terms.

Product image is the way consumers perceive an actual or

potential product.
New Product
Development
Concept Development and Testing

Concept testing refers to

testing new product concepts
with groups of target
consumers.
New Product
Development
Marketing Strategy Development

Marketing strategy Marketing strategy statement

development is designing
an initial marketing strategy
for a new product based on
the product concept.
consists of:
Target market description.
Value proposition planned.
Sales, market-share, and
marketing mix.
New Product
Development
Business Analysis

Business analysis
is a review of the
sales, costs, and
profit projections for
a new product to
find out whether
these factors satisfy
the company’s
objectives.
New Product
Development
Product Development

Product development
is developing the product
concept into a physical
product to ensure that the
product idea can be
turned into a workable
market offering.
New Product
Development
Product Development

Test marketing is the

stage of new product
development in which
the product and its
proposed marketing
program are tested in
realistic market settings.
New Product
Development
Product Development
Test marketing
New Product
Development
Test Marketing

Marketing Strategy Development

When test marketing When test marketing
is likely is unlikely

• New product with • Simple line

large investment extension
• Uncertainty about • Copy of competitor
product or product
marketing program • Low costs
• Management
confidence
New Product
Development
Commercialization

Commercialization involves introducing a new product into

the market.

When to launch?
Where to launch?
Planned market rollout?
New Product
Development
Commercialization

Successful new product development should be:

Customer centered
Team based
Systematic
New Product
Development
Team-Based New Product Development

Team-based new product development involves various

company departments working closely together, overlapping
the steps in the product development process to save time and
increase effectiveness.
New Product
Development
Team-Based New Product Development
New Product
Development
Marketing Strategy Development
Managing New Product
Development
Team-Based New Product Development

Systematic New Product Development

Innovation management system
ü Creates an innovation-oriented company culture
ü Yields a large number of new product ideas

New Product Development in Turbulent Times

ü Tempted to reduce spending
ü May become less competitive
Product Life-Cycle
Strategies
Product Life-Cycle
Strategies

Product development
Zero sales and increasing investment costs
Introduction
Slow sales and nonexistent profits
Growth
Rapid market acceptance and increasing profits
Maturity
Slow sales growth and profits level off or decline
Decline
Sales fall off and profits drop
Product Life-Cycle
Strategies
Product Life-Cycle
Strategies
Introduction Stage

Slow sales growth

Little or no profit
High distribution and promotion expenses
Product Life-Cycle
Strategies
Growth Stage

Sales increase
New competitors enter the market
Profits increase
Economies of scale
Consumer education
Lowering prices to attract more buyers
Product Life-Cycle
Strategies
Maturity Stage

Slowdown in sales
Many suppliers
Substitute products
Overcapacity leads to competition
Increased promotion and R&D to support
sales and profits
Product Life-Cycle
Strategies
Maturity Stage

Modification Strategies

Modify the market

Modify the product
Modify the marketing mix
Product Life-Cycle
Strategies
Maturity Stage

Modification Strategies
Product Life-Cycle
Strategies
Decline Stage

Maintain the product

Harvest the product
Drop the product
Product Life-Cycle
Strategies
Matriz BCG
New
Product Life-Cycle
Strategies
Product Life-Cycle
Strategies
Additional Product and
Service Considerations
Decline Stage

Public policy and regulations regarding developing

and dropping products, patents, quality, safety, and
product warranties should be considered carefully.
Additional Product and
Service Considerations
International Product and Service Marketing

Determining what products and

services to introduce in which
countries
Standardization versus
customization
Packaging and labeling
Customs, values, laws
¡Thanks!