Chapter12
Lecture 7
Setting Product Strategy
Marketing Management, 13th ed
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Questions for this week
• What are the characteristics of products and how
can they be classified?
• 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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Product
“Anything that can be offered to a market to
satisfy a want or need.”
Kotler
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Components of the Market Offering
Value-based prices
Attractiveness
of
the market
offering
Product Services
features mix and
and quality quality
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Five Product Levels
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Product Classification Schemes
Durability
Tangibility
Use
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Durability and Tangibility
Nondurable
goods
Durable
Services
goods
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Consumer Goods Classification
Convenience Shopping
Specialty Unsought
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Industrial Goods Classification
Materials and parts
Supplies/
Capital items
business services
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Product Differentiation
• Product form
• Features
• Customization
• Performance
• Conformance
• Durability
• Reliability
• Reparability
• Style
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Service Differentiation
• Ordering ease
• Delivery
• Installation
• Customer training
• Customer
consulting
• Maintenance and
repair
• Returns
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The Product Hierarchy
Item
Product type
Product line
Product class
Product family
Need family
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Product Systems and Mixes
• Product system
• Product mix
• Product assortment
• Depth
• Length
• Width
• Consistency
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Product Line Analysis
Core product Staples
Convenience
Specialties
items
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Product-Item Contributions to a
Product Line’s Total Sales and
Profits
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Product Map
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Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
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Product-Mix Pricing
• Product-line pricing
• Optional-feature pricing
• Captive-product pricing
• Two-part pricing
• By-product pricing
• Product-bundling pricing
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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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Packaging has been
influenced by:
• Self-service
• Consumer affluence
• Company and brand image
• Innovation opportunity
• ECR – Lean Management.
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Functions of Labels
• Identifies
• Differentiates
• Grades
• Describes
• Promotes
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Brand
• A trademark or distinctive name identifying a product
or a manufacturer.
• A product line so identified: a popular brand of soap.
• A distinctive category; a particular kind: a brand of
comedy that I do not care for.
• A mark indicating identity or ownership, burned on the
hide of an animal with a hot iron.
• A mark burned into the flesh of criminals.
• Has no value in accounting terms
• Brand has an associated image
“A name, term, sign, symbol or design, or a combination of
these, intended to identify the goods or services of one
seller or a group of sellers and to differentiate them from
those of competitors”
Kotler, 2001
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