Setting Product

Strategy
Mara Shaira A. Siega, CPA
2 Chapter Questions
 What are the characteristics of product and how
do marketers classify products?
 How can companies differentiate products?
 How can a company build and manage its
product mix and product lines?
 How can companies combine products to create
strong co-brands or ingredient brands?
 How can companies use packaging, labeling,
warranties and guarantees as marketing tools?

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3 What is a Product?

A product is anything that

can be offered to a market to
satisfy a want or need,
including events, physical
goods, services, experiences,
information, properties,
organizations, places,
persons, & ideas.

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4 Components of Market Offering
Value-based prices

Attractiveness of
the market
Product features offering Services mix and
and quality quality

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5 Five Product Levels

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6 Product Classification Schemes

Durability

Tangibility

Use

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7 Durability and Tangibility

Nondurable
Goods

Durable Services
Goods

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8 Consumer Goods Classification

Convenience Shopping Goods

Goods

Specialty Goods Unsought Goods

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9 Industrial Goods Classification
Raw materials Farm Products
Materials and Component
parts Materials
Manufactured Natural Products
materials and parts Component Parts
Capital items Installations

Maintenance and
Equipment
repair items
Supplies and
business
services
Operating supplies

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10 Product Differentiation
Form Durability

Features Reliability

Performance Repairability
Quality
Style
Conformance
Quality Customization

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11 Service Differentiation
Ordering Ease Customer
Consulting
Delivery

Maintenance and
Installation Repair

Customer Training Returns

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12 Design
A design is the totality of features that affect the
wat a product looks, feels and functions to a
consumer. It offers functional and aesthetic benefits
and appeals to both our rational and emotional
sides.

“Design is more than just creativity, or a phase in

creating a product, service, or application. It’s a
way of thinking that can transform an entire
enterprise.”

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13 Product Hierarchy

Item

Product type

Product line

Product class

Product family

Need family
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14 Product Systems and Mixes
A product system is a group of diverse but
related items that function in a compatible manner.
The product mix means a set of all products
and items a particular seller offers for sale. It
consists of various product lines.

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15 Dimension of Product Mix

Width

Length

Depth

Consistency

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16 Product Line Analysis
Product-line managers need to know the sales
and profits of each item in their line in order to
determine which items to build, maintain, harvest,
or divest.

Sales and profits

Market profile

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17 Sales and Profit
It is possible for companies to know how well
its lines are performing by the sales and profit
report. Every company's product portfolio contains
products with different margins. A company can
classify its products into four types that yield
different gross margins, depending on sales volume
and promotion:

Core products Specialties

Staples Convenience items

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18 Market Profile
It is how the line is positioned against
competitors' lines. The product map shows which
competitors' items are competing against a
regarding company’s items. Another benefit of
product mapping is that it identifies market
segments.

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19 Product-Line Length
Down Market

Line Stretching
Up Market

Line Filling Two - Way

Line modernization,
featuring and pruning

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20 Product Mix Pricing

Product – line Two – part

Optional - feature By – product

Captive – product Product – bundling

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21 Co-Branding
In co-branding – also called dual branding or
brand bundling – two or more well-known brands
are combined into a joint product or marketed
together in some fashion. There are various ways to
form a combination: same-company cobranding,
joint-venture co-branding, multiple- sponsor co-
branding, or retail cobranding.
For co-branding succeed, the two brands must
separately have brand equity a logical fit between
them.

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22 Ingredient Branding
Ingredient branding is a special case of co-
branding. It creates brand equity for materials,
components, or parts that are necessarily contained
within other branded products. Ingredient branding
has the following requirements to be successful:
1. Consumers must perceive that the ingredient
matters to the performance and success of the end
product. Ideally, this intrinsic value is easily seen
or experienced.

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23 Ingredient Branding
2. Consumers must be convinced that not all
ingredient brands are the same and that the
ingredient is superior.
3. A distinctive symbol or logo must clearly signal
to consumers that the host product contains the
ingredient. Ideally, the symbol or logo would
function like a "seal" and would be simple and
versatile and credibly communicate quality and
confidence.

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24 Ingredient Branding
4. A coordinated "pull" and "push" program must
help consumers understand the importance and
advantages of the branded ingredient. Channel
members must offer full support. Often this will
require consumer advertising and promotions and -
sometimes in collaboration with manufacturers -
retail merchandising and promotion programs.

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25 Packaging
Well-designed packages can build brand equity
and drive sales. The package is the buyer's first
encounter with the product and is capable of turning
the buyer on or off.
Various factors have contributed to the growing
use of packaging as a marketing tool:

Self service Company and brand image

Consumer affluence Innovation opportunity

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26 Packaging
From the perspective of both the firm and
consumers, packaging must achieve a number of
objectives:
1. Identify the brand.
2. Convey descriptive and persuasive information.
3. Facilitate product transportation and protection.
4. Assist at-home storage.
5. Aid product consumption.

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27 Labeling
Labels perform several functions:

1. Identifies the product or brand;

2. Grade the product;
3. Describe the product;
4. Promote the product;

Labels eventually become outmoded and need

freshening up.

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28 Warranties and Guarantees
Warranties are formal statements of expected
product performance by the manufacturer.

Guarantees is more than legal statements that

guides the warranties, they can be seen as extra
benefits to induce consumer to buy the product.

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