BUSINESS MARKETING LEVELS OF PRODUCTS

1. Core Product - The problem-solving

REVIEW:
services or core benefits that
consumers are really buying when
they obtain a product.
2. Actual Product - A product's parts,
quality level, features, design, brand
name, packaging and other
attributes that combine to deliver
core product benefits.
PRODUCT MIX 3. Augmented Product - Additional
-People satisfy their needs and wants with consumer services and benefits built
products. A product is anything that can around the core and actual
be offered to a market to satisfy a need or products.
want. Usually, the word product suggests
a physical object, such as a car, a
television set or a bar of soap.
-However, the concept of product is not
limited to physical objects - anything
capable of satisfying a need can be called PRODUCT CLASSIFICATIONS
a product. DURABLES
-In addition to tangible goods, products Products which have a long interval
include services, which are activities or between repeat purchases because
benefits offered for sale that are of their long-lasting nature.
essentially intangible and do not result in
Floor polishers, cars, tv sets, etc.
the ownership of anything.
NON-DURABLES
-Examples are banking, airline, hotel and
Products which have stronger
household appliance repair services.
between repeat purchases because
Broadly defined, products also include
of they are consumables.
other entities such as
Detergents, processed meats, snacks,
PERSONS
etc.
PLACES
SERVICES
ORGANIZATIONS
Products which are essentially
ACTIVITIES intangible because they are no
IDEAS physical items involved.
Training services, tent rentals, etc.
TYPES OF CONSUMER PRODUCTS
-Consumer products are those bought by
final consumers for personal
consumption.
-Marketers usually classify these goods
based on consumer shopping habits.
Consumer products include convenience
products, shopping produces, specialty
products and unsought products.
-These products differ in the
consumers buy them, so they differ in how
they are marketed.
Convenience goods can be divided further
into staples, impulse goods
emergency goods.
1. Staples - Are goods that consumers
buy on a regular basis, such as milk,
toothpaste or bread.
2. Impulse Goods - Are purchased with
little planning or search effort. These
goods are normally available in many
places because consumers seldom
seek them out. Thus, chocolate bars
and magazines are placed next to
checkout counters because shoppers
may not otherwise think of buying
them.
3. Emergency Goods - Are purchased
when a need is urgent such as
umbrellas during a rainstorm, or boots
and shovels during the year's first
snowstorm. Manufacturers of
emergency goods will place them in
many outlets to make them readily
available when the customer needs
them.
way PRODUCT ATTRIBUTES
-Developing a product involves defining
the benefits that the product will offer.
These benefits are communicated and
delivered by tangible product attributes,
such as quality, features and design.
-Decisions about these attributes are
particularly important as they greatly
affect consumer reactions to a product.
1. Product Quality
- Quality is one of the marketer's major
positioning tools. Quality has two
dimensions - level and consistency. In
developing a product, the marketer must
and first choose a quality level that will support
the product's position in the target market.
- Here, product quality stands for the
ability of a product to perform its
functions, it includes the product's overall
durability, reliability, precision, ease of
operation and repair, and other valued
attributes.
- Although some of these attributes can
be measured objectively, from a
marketing point of view, quality should be
measured in terms of buyers' perceptions.
 2. Product Features BRANDING
- A product can be offered with varying - Perhaps the most distinctive skill of
features. The company can create more professional marketers is their ability to
features by adding higher-level models. create, maintain, protect, reinforce and
-Features are a competitive tool for enhance brands.
differentiating the company's product - A brand is a mark of distinction that can
from competitors' products. Being the first be sensed usually in a form name, term,
producer to introduce a needed and sign, symbol, design or a combination
valued new feature is one of the most of these, which is used to identify the
effective ways to compete. goods or services of one seller or group
3. Product Design of sellers and to differentiate them from
- Another way to add product those of competitors.
distinctiveness is through product design. - Thus, a brand identifies the maker or
Some companies have reputations for supplier of a product.
outstanding design. Some companies FUNCTIONS OF A BRAND
have integrated design with their It identifies the Product or service
corporate culture. It communicates messages
POINTS OF PARITY AND DIFFERENCE It functions as a legal property
- Points of Parity (POP): these are market WHY BRAND?
expectations about what products in For the Customer:
a particular product category should Brands convey information.
be or should have. These are Brands signal consistent quality.
associations that are not necessarily Brands confer status.
unique to the brand but may in fact be Brands reduce customer risk.
shared with other brands. Brands make many purchases
- Points of Difference (POD): refer to decision easier.
attributes or benefits that the market For the Company:
associates primarily with a particular Brands enhance loyalty
brand, to the point that the market Brands allow charging of premium
believes that no other brands offer prices.
these attributes or benefits to the same Brands inoculate the company from
degree as that the brand. some competitive action.
Brands assist in segmentation,
targeting and positioning.
Brands encourage channel’s
support.
ELEMENTS OF A BRAND
PRICE MIX
IMPORTANCE OF PRICING
It is the product’s monetary value to
make it available for sale in the
market.
Pricing creates product quality
perception.
Pricing indicates the profit margin of
a company.
Price is one of the main factors in
customer buying decision process.
LOW PRICING STRATEGIES
- Market Penetration - Price is low to
attract volume. Also involves setting
the price even lower than planned to
attract as much of the market into
trying it and hopefully becoming loyal
to it.
- Mark-Up Pricing - Uses the total cost of
producing a product and adding a
mark-up to receive profits.
- Loss Leader - The Loss Leaders are the
products being sold at such low prices
as an enticement to buyers to step foot
in the store.
- Nearly Predatory - Predatory Pricing is
a method in which a seller sets a price
so low that other suppliers cannot
compete and are forced to exit the
market.
MEDIUM PRICING STRATEGIES
- Going Rate - Determines its product
price based on industry rates rather
than on either production costs.
- Perceived Value Pricing - A proactive
and marketing-based pricing method
whereby the price of the product is
based on value of the product to the
market. This will require market
research in order to determine just how
much the target market believes the
product is worth to them.
- Discount Pricing - Giving the target
market a sense of discount if they will
purchase more quantities and/or if
they purchase regularly.
✓ Product Bundling – giving a discount to
customers if they by two different
products. Example Combo Meals, Price
Packs (toothbrush paired with
toothpaste), 10% off to any vegetable
purchase (up to 300) if the customer
purchased at least 500 pesos worth of
meat.
✓ Holiday and Special Occasions
Discount – discounts given on special
occasions like Birthdays, holidays, etc.
Example: 50% off to the birthday celebrant
if he/she dined with at least 5 persons in
the restaurant.
✓ Price Discounts – discounts given to
customer if they purchase more quantities
of the product. (“Buy 1 get 1 20% off)
✓ Loyalty Discount – a discount given to
loyal customers. “20% off to selected items
Prestige Club Holders (SM)”
✓ Partnership Discount – a discount given
to customers if they are a cardholder of a
business partner. “10% off on selected
items if your purchase at Ororama and if
you are a PAG-IBIG cardholder”.
- Odd Number Pricing - Prices that end
in non-rounded odd numbers such as
9.95 or 99.50 are said to give
consumers the perception that the
prices are not as expensive as they
actually are.
HIGH PRICING STRATEGIES
- Market Skimming Pricing - Setting the
price high in order to milk the segments
with higher disposable incomes, with
the price gradually being reduced over
time to milk the next income tiers, and
so on.
- Prestige Pricing - Is a pricing strategy
that involves keeping a high price for a
product or service to communicate
high quality or luxury.