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Setting Product Strategy

Marketing Management, 13th ed

What is a Product?
A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

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Figure 12.1 Components of the Market Offering

Value-based prices

Attractiveness of the market offering Product features and quality Services mix and quality
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Figure 12.2 Five Product Levels

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Product Classification Schemes

Durability
Tangibility Use

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Durability and Tangibility

Nondurable goods Durable goods

Services

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Consumer Goods Classification

Convenience(SIE)

Shopping

Specialty

Unsought

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Industrial Goods Classification

1. Material & parts: Raw Material: farm products, natural products. Manufactured material & parts: Component material, component parts 2.Capital items 3. Supplies & services: Maintenance & repair items,operating supplies
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Product Differentiation
Product form Features Customization Performance Conformance Durability Reliability Repairability Style
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Service Differentiation
Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair

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Design Differentiation

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Maintenance and Repair

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Product Systems and Mixes

Product system Product mix width Length Depth Consistency

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Product-Mix Width and Product-Line Length for Gamble Products

Product-Mix Width Detergents Toothpaste Disposable Bar Soap

Proctor&

Diapers

Paper Tissue

Ivory Snow (1930) PRODUCTDreft LINE (1933) LENGTH

Tide (1946) Cheer (1950)

Gleem (1952)
Crest (1955)

Ivory (1879)
Kirks (1885) Lava (1893) Camay (1926)

Pampers (1961)
Luvs (1976)

Charmin (1928)
Puffs (1960) Banner (1982) Summit (1992)

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Line Stretching
Down-Market Stretch

Up-Market Stretch Two-Way Stretch

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Two-Way Product-Line Stretch: Marriott Hotels

Quality
Economy High Standard Good Superior
Marriott Marquis (Top executives) Marriott (Middle managers)

Price

Above average

Average
Fairfield Inn Low (Vacationers)

Courtyard (Salespeople)

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Product Mix pricing

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Product Line Pricing

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Optional feature pricing Captive product pricing Two part pricing By product pricing Product bundling pricing

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What is the Fifth P?

Packaging, sometimes called the fifth P, is all the activities of designing and producing the container for a product.

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Factors Contributing to the Emphasis on Packaging

Self-service
Consumer affluence Company/brand image

Innovation opportunity

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Packaging Objectives
Identify the brand Convey descriptive and persuasive information Facilitate product transportation and protection Assist at-home storage Aid product consumption

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Functions of Labels
Identifies
Grades Describes

Promotes
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Warranties and Guarantees

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