Ch- 13 Setting Product Strategy

Product Levels:
1. Core Benefit- The benefit customer is really buying.

2. Basic Product- Attributes absolutely necessary for

it to function.

3.Expected product- Attributes buyers normally

expect while purchasing the product.

4. Augmented product- That which exceeds customer

expectations.

5.Potential product- Encompasses all possible

augmentations and transformations the product might
undergo in the future.
Product Classifications
On the basis of durability and tangibility-

1.Nondurable goods- Tangible goods consumed in one or few

uses- FMCG.

2. Durable goods- Tangible goods and longer use. Refrigerators.

3. Services- Intangible, inseparable, variable, perishable. Haircut.

Consumer goods classification:

1. Convenience goods- Purchased

frequently, immediately and with
minimum effort. Soap.

◦ Staples- Purchased regularly. Toothpaste.

◦ Impulse goods- Purchased without planning.
Candy bars.
◦ Emergency goods- Purchased when need is
urgent- umbrellas.
2. Shopping goods- Consumers compare on
suitability, quality, price and style. Furniture,
clothing, appliances.

- It could be homogeneous or heterogeneous.

3.Specialty goods- Have unique

characteristics for which buyers can make a
special purchasing effort. Cars.

4.Unsought goods- Consumers don’t

normally think of buying- Smoke detectors.
Industrial goods classification:

1. Material and parts-

◦ Raw materials (Cotton)
◦ Manufactured parts (motors)

2. Capital items-

◦ Installations ( factories, offices)
◦ Equipments ( lift trucks)

3. Supplies and business services-

◦ Maintenance, repair (nails, brooms)
◦ Operating supplies (paper, pencils)
Product Differentiation
Form- Size, shape
Features- Supplement basic function
Performance quality- Level of performance
Conformance quality- Produced units
identical
Durability- Expected operating life
Reliability- Probability of not failing
Repairability- Ease of fixing product
Style- Product’s look and feel- Aesthetics
Services Differentiation
Ordering Ease- Placing order
Delivery- Speed, accuracy and care
Installation- To make product operational
Customer training- Helps employees use equipment
properly
Customer consulting- Advice services
Maintenance and repair- Keep products in good working
order
Returns- Return the product
Design:

- A wayto differentiate and position

company’s products.

Totalityof features that affect the way a

product looks, feels and functions. Eg-
Furniture

Important for durable goods like

automobiles.
Luxury products
Higher priced and were about social status. (Armani,
Gucci, Louis Vitton)
Brand name, logos, packaging are important.
High quality products and services
Premium pricing strategy
Controlled distribution, selective channels
Maintain premium, aspirational image
Product Hierarchy
Need Family- The core need
Product Family- All product classes satisfying core
need
Product Class- Functional coherence (Product category)
Product Line- Closely related products
Product Type- Products in a product line
Item (SKU)-A distinct unit in a product line
 Product Systems and Mixes

Width of Product Mix- Different product lines

Length of Product Mix- Total number of items in the mix

Depth of Product Mix- Variants of each product in line

Consistency of product Mix- Closely related product lines

Lengthen product line by Line stretching (Down market,

Upmarket or 2 way stretch) and Line Filling (More items in
present range).
Packaging, Labeling, Warranties and Guarantees

Packaging helps identify brand, convey information,

transport and protection, storage, consumption.

Labeling identify product or brand, grade, describe,

promote.

Warranties and Guarantees – Repair, replace, refund.