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16-Oct

Module 6: Product Strategy Part 1

What is a product?
- Product is a good, a service, or an idea consisting of a bundle of tangible and intangible
attributes
Tangible attributes
- includes physical characteristics (e.g. touch, taste, smell, sight)
Intangible attributes
- includes aspects of a product that can’t be touched (e.g. how it makes you feel)
The Importance of Product
- Product is the CORE of the marketing mix
- Product defines what will be priced, promoted, and distributed
- If you can create and deliver a product that provides exceptional value to your target
customer, the rest of the marketing mix becomes easier to manage.
Types of Products
1. Non-durable good – an item that does not last and that is consumed only once
2. Durable good – product that lasts for an extended period of time
3. Service – an intangible activity, benefit, or satisfaction; primary, supplemental & virtual
(online)
Uniqueness of Services – The 4 I’s
1. Intangibility
2. Inconsistency
3. Inseparability – you cannot separate the person from the service
4. Inventory
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Product and the Service Continuum

Total Product Concept

Products have 3 different layers:
1. Core Product Layer
o Benefits derived
o Might be different according to the needs of a person
o Example. Bicycle – is it for fitness, transportation, etc.?
2. Actual Product Layer
o Branding, design, features
3. Augmented Product Layer
o Additional benefits
o Comes with the actual product
Example:
- Core product: Apple watch and things that it does
- Actual product Branding, packaging
- Augmented Product Layer: Warranty, feeling fancy when wearing
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Packaging and Labelling

- Mostly used for tangible products.
• FUNCTION: Use, storage, transport, feel...
• COMMUNICATION: Information, nutrition content, how to use, purpose...
• BRAND IMAGE: Product Positioning, brand equity, perception
Product Lines and Product Mixes
Product Line
- a group of similar products that are closely related as they satisfy a similar need and are
directed at the same general target market
Product Mix
- consists of all the product lines marketed by a company

Product Lines and Mixes

• Product Category: A type of product for which there are many brands and variations
• Breadth: The number of product lines offered by a company
• Depth: The number of products in a product line
• Product mix includes width (breadth)
• Product line includes: length (sub categories within a product line) and depth (number
or products in that line)
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• Product Category example: Ice cream

• Breadth: Nestle has pet food, ice cream, chocolate, candy, cosmetics, coffee, etc.
• Depth: Nestle has many types of ice cream including Nestle, Drumstick, and Movenpick
Product Mix Changes
• Companies can increase or decrease breath
• Entails adding/removing different types of product lines
• Companies can increase or decrease depth
• Entails adding/removing types of products in a single line or variations of the product
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23-October

Consumer vs Business Products

Consumer Products
- Purchased for personal use by the ultimate consumer
1. Convenience – frequently purchased with minimal effort, will accept substitutes,
inexpensive, many outlets, emphasis on price, availability, and awareness (toilet paper)
2. Shopping – occasional purchases, comparison shopping, preferred brands, fairly
expensive, large number of outlets, differentiation. In contrast, consumers want to be
able to compare products categorized as shopping products. Shopping products are
usually more expensive and are purchased occasionally. The consumer is more likely to
compare a number of options to assess quality, cost, and features (laptops, appliances,
bicycles)
3. Specialty – infrequent purchases, require time to search and purchase, very brand loyal,
usually very expensive, limited distribution, emphasis on uniqueness - consumers want
to be able to compare products categorized as shopping products. Shopping products
are usually more expensive and are purchased occasionally. The target markets are
generally very small and outlets selling the products are very limited to the point of
being exclusive. The consumer is more likely to compare a number of options to assess
quality, cost, and features (Luxury goods, such as a watch, a sportscar or designer shoes)
4. Unsought/Emergency – very infrequent purchases, accept substitutes, price varies,
often limited distribution, emphasis on awareness - Unsought products are those the
consumer never plans or hopes to buy. These are either products the customer is
unaware of or products the consumer hopes not to need. (Rat traps, burial site)
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CONVENIENCE SHOPPING SPECIALTY UNSOUGHT

Product Milk Bicycle Rolex Will
Price Low Varies-high Very high Varies-high
Place/Distribution Intensive Selective Exclusive Limited
Availability Brand Image Prestige Reputation
Promotion
Recognition Differentiation Exclusivity Recognition

- Westjet – Convenience
- Travel Insurance – Unsought
- Toothpaste – Convenience
- Space Travel – Specialty

Branding
- A name, phrase, symbol, or design uniquely given by a company to a product to
distinguish it from the competition.
- Branding is about the promise of a memorable experience. It’s about creating an
expectation and delivering it consistently every time anyone meets your brand, whether
it’s the way you answer the phone, how your website functions, your social media
presence, your brand voice or how your product/service performs. It’s how you make
your customers feel when they are interacting with your brand
o A brand is an identifier: a name, sign, symbol, design, term, or some
combination of these things that identifies an offering and helps simplify choice
for the consumer.
o A brand is a promise: the promise of what a company or offering will provide to
the people who interact with it.
o A brand is an asset: a reputation in the marketplace that can drive price
premiums and customer preference for goods from a particular provider.
o A brand is a set of perceptions: the total of everything individuals believe, think,
see, know, feel, hear, and experience about a product, service, or organization.
o A brand is “mind share”: the unique position a company or offering holds in the
customer’s mind, based on their past experiences and what they expect in the
future.
- A brand consists of all the features that distinguish the goods and services of one seller
from another: name, term, design, style, symbols, customer touchpoints, etc. Together,
all elements of the brand work as a psychological trigger or stimulus that causes an
association to all other thoughts one has had about this brand.
- Brands are a combination of tangible and intangible elements, such as the following:
o Visual design elements (i.e., logo, color, typography, images, tagline, packaging,
etc.)
o Distinctive product features (i.e. quality, design sensibility, personality, etc.)
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o Intangible aspects of customers’ experience with a product or company (i.e.

reputation, customer experience, etc.)
- Branding–the act of creating or building a brand–may take place at multiple levels:
company brands, individual brands, or branded product lines. Anything that works to
build consumer loyalty can also be a brand, such as celebrities, events, & places

Brands Convey Meaning

• Attributes: specific product features
• Benefits: attributes translate into functional and emotional benefits
• Values: company values and operational principles
• Culture: cultural elements of the company and brand
• Personality: strong brands often project a distinctive personality
• User: brands may suggest the types of consumers who buy and use the product

Brands Create Value for Consumers

- Brands help simplify consumer choices
- Brands help create trust so that a person knows what to expect from a branded
company, product, or service
- This builds customer loyalty, which is valuable to businesses

Types of Brands
1. Individual products 7. Events
2. Product ranges 8. Geographic places
3. Services 9. Private label brands
4. Organizations 10. Media
5. Individual persons 11. E-brands
6. Groups

Brand Equity
- The value of a well-known brand that conjures positive (or negative) exposure,
interactions, associations, and experiences that consumers have with a brand over time.
- How much value does it hold for you?

Brand Asset Valuator

- A model used to measure the value of a brand.
- Evaluates a brand’s strength and potential by breaking it into four key pillars:
1. Differentiation: How unique or distinct the brand is
2. Relevance: How well the brand meets customer needs
3. Esteem: How well the brand is respected and regarded
4. Knowledge: How familiar people are with the brand
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Example: APPLE
1. Differentiation: Apple stands out because of its sleek product design and innovation
2. Relevance: Apple’s products meet the needs of many people
3. Esteem: The brand is highly respected worldwide for quality and performance
4. Knowledge: Apple is well-known everywhere

• High Differentiation and relevance – have growth potential

• High esteem and knowledge – strong customer loyalty

Brand Loyalty
- The degree of attachment that consumers have to a particular brand
- A consumer’s commitment to repurchase or otherwise continue using a particular brand
by repeatedly buying a product or service
- Perceived value, satisfaction, and brand trust are also elements of brand loyalty

Brand Loyalty Types:

1. Hard-core
- iPhone until death
2. Split Loyals
- Coca-Cola or Pepsi, depending on availability or mood
3. Shifting Loyals
- Shift from one brand to another over time
4. Switchers
- No loyalty

Brand Platform
- The foundation that guides everything a brand does, from its messaging to customer
experience.
- It defines what the brand stands for and ensures all activities are aligned with its core
identity
- Importance:
o It ensures consistency in everything from marketing campaigns to customer service.
It helps create trust, recognition, and loyalty over time by clearly defining what the
brand stands for and what customers can expect
- Key elements:
o Brand vision
▪ What the brand aims to achieve in the long run
o Mission
▪ What the brand does and why it exists
o Core Values
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▪ The principles the brand lives by

o Positioning
▪ How the brand wants to be seen by customers compared to competitors
o Brand Personality
▪ The human traits that reflect the brand
▪ A set of human characteristics associated with the brand
o Brand Promise
▪ The commitment the brand makes to its customers

Brand Archetype
- A personality type that helps a brand connect emotionally with its audience by telling a
familiar story
- It is based on common human traits and patterns that peoples easily recognize, making
the brand more relatable

Brand Voice (Tone)

- The unique way a brand communicates with its audience
- reflects the brand’s personality and values through the tone, style, and language it uses
in everything
- Brand voice + Brand personality = linguistic and visual tone
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Brand Book
- Contains rules, graphic design
Brand Platform Example: DISNEY
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25 Oct

Psychology of Colour
- Color can subconsciously influence decisions

Selecting a Brand Name

- Most important product decisions a seller makes
Creating a Strong Brand Name
o Be Strategic
▪ Define what’s being named, the message, target audience, and competitors
o Key questions:
▪ Is it meaningful?
▪ Is it Adaptable?
▪ Is it Distinctive?
o Be Creative
▪ Memorable
▪ Sounds Good:
▪ Looks Good:
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Naming That Works Across All Dimensions

• Be Technical
o Legally Available
o Linguistically Safe
o Easy to Spell and Pronounce
• Final thought
o Great brand names balance strategy, creativity, and technical viability
o Distinctive names tend to be memorable
o A high-quality name is more valuable than a perfect URL

Steps of Naming a Brand

1. Define what you’re naming
2. Check the landscape
3. Brainstorm ideas
4. Screen and knock out problematic names
5. Check domain name and social media availability
a. Look at variations of your chosen name
b. Check out your internet “neighbours”
c. Reserve domains in geographies where you plan to do business
6. Customer-test your final short-listed names
7. Make your final selection
8. Take steps to get trademark protection for your new brand
Branding Strategies

• Branded house: Google, Apple,

• House of brands: P&G = Dove, Tide, Old Spice
• Private label or store branding: President’s Choice
• “No brand” branding
• Personal and organizational
• Place branding: Las Vegas “What happens here…”
• Co-branding: Doritos + Taco Bell
• Licensing – Campbell’s + Star Wars
• Brand extension and line extension: Diet Coke, Jell-O pudding pops
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Why Packaging Matters for a Brand

1. Packaging as a Marketing Tool
• First point of contact with consumers.
• Reinforces brand identity through colors, logos, and design.
• Differentiates products on shelves from competitors.
2. Key Functions of Packaging
• Protection: Keeps products safe during transport and storage.
• Convenience: Easy to use, open, and store.
• Communication: Displays key information (ingredients, instructions, etc.).

Key Elements of Effective Brand Packaging

1. Visual Identity
a. Colors & Fonts: Align with brand personality (e.g., Coca-Cola’s red).
b. Logos & Symbols: Increase brand recognition (e.g., Apple’s minimalist
packaging).
2. Sustainability Trends
a. Eco-friendly materials (e.g., Patagonia’s recycled packaging).
b. Minimalist designs to reduce waste.
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Module 7
Why New Products? Product Innovation

• New products are the lifeblood of a company

• Consumer relevancy
• Future revenues and profits for the company
Types of New Product Innovations
1. Minor
- Require no adjustment on behalf of the consumer
- line extensions often a minor innovation
- no new instruction on how to use – just a new formulation
- focus is on generating awareness e.g. new toothpaste – extra whitening
2. Continuous
- more than just a minor product improvement
- continual product changes
- no radical changes in consumer behavior but new knowledge ongoing
- Example: electric cars – drive same way as a gas car but…
o shorter driving ranges, charging stations required, cost of operation
3. Radical
- least common form
- introduction of something completely new to the market
- Example: drones

The Product Life Cycle

1. Introduction / Awareness
- released into market
- High stakes time – will it get traction? – doesn’t necessarily make or break success
- how consumers respond
- marketing and promotion high – investment strong – no guarantee yet that will be
successful
2. Growth / Product Differentiation
- consumers taking to the product; increasingly buying
- other companies becoming aware
- competition may get strong – may still be investing strongly
- product growing; market expanding (not always)
- as the market expands, more competition often drives prices down – but volumes still
growing so revenues strong
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3. Maturity / Brand Loyalty

- sales slowing – market saturated
- pricing also remains competitive – squeezed margins or lower demand so lowering
pricing
- ” shake out point” – those performing less than competitors are often pushed out
- saturation reached; volumes maxed
- begin to start innovating again to maintain their share; meet new consumer needs;
technologies
4. Decline / Product Rationalization
- companies try to keep product maturity alive as long as possible, but decline is
inevitable
- sales drop significantly; no longer demand or need
- company losing market share
- marketing activities minimal
- eventually retired from the market unless able to redesign to stay relevant

• The variables of time, sales, and profits are the determinants of a product’s stage in the
life cycle.

For Tourism:
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Adoption Curve
- the sequential diffusion and acceptance of innovation into the market by consumers
1. Innovators – 2.5%
- venturesome, higher educated; use multiple information sources
- opinion leaders – can be highly influential in the future demand for a product
- Try to move from early adopters to the early majority as quickly as possible to
reap the benefits of increased sales and profits
- -marketing programs differ to meet the needs of each consumer within the
adoption curve
2. Early Adopters - Leaders in social settings; slightly above average education
3. Early majority – deliberate; many informal social contacts
4. Late majority – skeptical; below average social status
5. Laggards – fear of debt neighbours and friends are information sources

Product Adoption Stages

1. Awareness stage —the user becomes aware that the product exists.
2. Research and discovery stage — Also known as the interest stage, the user’s curiosity is
piqued, so they take action to learn more.
3. Evaluation — This is like the consideration stage when prospects evaluate the product’s
value proposition.
4. Trial — try the product and check out if the product solves its problem and delivers
more value than that of competitors.
5. Adopt or reject — This is the make-or-break stage. Does your product’s value proposition
outweigh the effort and cost required for the user to adopt it? If yes, they’ll likely switch
and begin using the product.
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Adoption Curve Barriers

1. usage barriers (the product is not consistent with existing usage habits)
2. value barriers (there is no incentive to change)
3. risk barriers (the existence of physical, economic, or social risks if the product is
purchased), and
4. psychological barriers (cultural or image differences).

Product Rationalization
- The process of reviewing the products and services of a firm to make a decision to retire,
consolidate, maintain, or improve each.
- Retire – stop production, sell remaining off
- Consolidate - the process of merging multiple products or services into a single,
streamlined offering.
- Maintain – Status Quo
- Improve – make positive changes to the existing product
Strategies to Extend the Product Life Cycle
1. Enter new markets (New consumers, increase of product use)
2. Modify the product (quality, packaging)
3. Product line extensions (+ new item)
4. Reposition the product (change target market’s understanding)
5. Introduce a new product

New Product Development

PRODUCTS
MARKETS CURRENT NEW
Market Penetration Product Development
Current Finding way to make current products appeal to
Reaching Current customers with a new product
current customers
Market Development Diversification
New
Reaching new customers with a current product Reaching new customers with a new product
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New Product Development Process

1. New product development strategy

2. Idea generation
3. Screening and evaluation
4. Business analysis
5. Development
6. Test marketing
7. Commercialization

• Expensive undertaking
• High risk of failure
• High research costs
• Time and effort on developing prototypes and marketing materials
• Expensive product launches
• Lack of future credibility in the market

Why New Products Fail

1. Insignificant point of difference
2. Incomplete new concept definition
3. Insufficient market attractiveness
4. Poor execution of the marketing mix
5. Bad timing
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Module 8: Pricing Strategy Part 1

Price
• the money or other considerations, including other goods and services, exchanged for
the ownership or use of a product
Barter
• exchanging goods and services for other goods and services

Pricing Factors
• Costs
• Customers
• Positioning
• Competitors
• Profit

The right price – 3 GOALS

1. Achieve the company’s financial goals (profitability)
2. Fit within the realities of the marketplace (customers can/will pay)
3. Support a product’s positioning and be consistent with the other P’s

Price in the Marketing Mix

- Pricing decisions influence both total revenue (sales) and total cost, which makes pricing
one of the most important decisions marketing executives face
- ONLY P in 4 P’s where money is coming in
- Pricing is linked to the Business Model (how you make $)

Profit = Total Revenue – Cost

= (Unit Price x Quantity Sold) – Total Cost

Price vs Value
Price Value
The exchange value of a good or service in The value of a good or service is derived
the marketplace from its tangible or intangible benefits
Price is the amount of money that you are Value represents the amount of money that
asked to pay for it you are willing to pay for anything
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Price as an Indicator of Value

1. Tangible Value
2. Intangible value

Value Pricing
- increasing product or service benefits while maintaining or decreasing price

𝑃𝑒𝑟𝑐𝑒𝑖𝑣𝑒𝑑 𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠
𝑉𝑎𝑙𝑢𝑒 =
𝑃𝑟𝑖𝑐𝑖𝑛𝑔

Psychological pricing
- Attempts to influence a customer’s spending
- Encourages purchasing based on emotions rather than on rational decision
- Influences consumers’ perceptions
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06 Nov

Price vs. Value

Value in Pricing
Value Perception: The worth or desirability a customer associates with a product or service,
which can be influenced by the price they are willing to pay.
How Price Signals Value
• Higher Prices: Often associated with higher quality, exclusivity, or luxury.
• Lower Prices: May indicate affordability, budget options, or less customization.
Value-Driven Choices: Travelers make decisions based on perceived value; a higher price can
convey a premium experience, while a budget price can appeal to cost-conscious travelers.

Industry Pricing
• Unique Challenges: Seasonal demand (peak and off peak), perishability of services (e.g.,
unsold hotel rooms or airline seats), and high competition.
• Price as a Signal: Price reflects perceived quality, exclusivity, or value in tourism (e.g.,
luxury vs. budget experiences

Other Challenges
• High Competition: Differentiating based on value, not just price.
• Customer Perception of Value: Aligning price with perceived quality.
• Online Price Transparency: The impact of comparison websites and customer
expectations.

Pricing Strategies
5 Most Common Pricing Strategies
1. Cost-plus pricing – Calculate your costs and add a mark-up
• Pros: Simple and ensures costs are covered.
• Cons: Ignores demand, customer willingness to pay, or competitor prices, which
may lead to overpricing or underpricing.
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2. Cost-Oriented Pricing – Considers costs but also considers additional factors. Often more
flexible and adjusted based on external factors (adjust based on demand)
• Pros: Can maximize profits by adapting to demand and market conditions.
• Cons: More complex and requires ongoing adjustments and market analysis.
3. Profit-oriented Pricing – selling prices to achieve a specific profit margin or ROI
• How it works:
o Price is set based on desired profit margin
o Takes into account costs but focuses on maximizing profit per sale
• Pros: Helps meet profit goals and manage financial forecasts.
• Cons: Risk of overpricing if customer demand or competition is not considered
4. Competitive pricing – Set a price based on what the competition charges
5. Dynamic and Yield Management Pricing - real time (e.g. Uber)
6. Price skimming – Set a high price and lower it as the market evolves
7. Penetration pricing – Set a low price to enter a competition market and raise it later
8. Value-based pricing – Base your product or service’s price on what the customer
believes it’s worth
- Benefits and Challenges: Captures willingness to pay but requires understanding
customer preferences.
9. Discount and Promotional Pricing

ROMI
- Return on Marketing Investment
- Measures the money a business earns from its marketing activity vs how much it spent
on it.
𝑹𝒆𝒗𝒆𝒏𝒖𝒆 − 𝑴𝒂𝒓𝒌𝒆𝒕𝒊𝒏𝒈 𝑬𝒙𝒑𝒆𝒏𝒔𝒆𝒔
𝑹𝑶𝑴𝑰 = 𝒙 𝟏𝟎𝟎
𝑴𝒂𝒓𝒌𝒆𝒕𝒊𝒏𝒈 𝑬𝒙𝒑𝒆𝒏𝒔𝒆𝒔

Legal and Ethical Considerations

• Price Fixing – competitors collaborate and conspire to set prices
• Price Discrimination – different customers get different prices
• Deceptive Pricing – price offers that mislead
• Predatory Pricing – low price set to drive competitors out of business
• Transparency - Clear disclosure of fees and pricing policies.

Forecasting
- Predicting future demands
- Involves demand prediction, pricing adjustments, resource planning
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Supply and Demand

Price Elasticity
- How sensitive consumer demand and a company’s revenues are to changes in the
product’s price
- Some products are highly elastic (People may not buy them if they are too expensive, a
slight decrease in price may lead to big increases in demand).
- Ex: Travel, pineapples, luxury items
- Other products are inelastic. (People will buy it no matter the price).
- Ex: Gas, baby formula