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1. Product
1.1 Product

A product is something that satisfies a set of wants that customers have. have.

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1. Product
1.1 Product (contd)
Attributes:

(a) Tangible attributes

Availability and delivery Performance Price Design

(b) Intangible attributes

Image Perceived value
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1.2 Three Levels of Product

Levels of a product

Figure 1 Three levels of product 4

"hree #evels of a Product $ cont%d&

ore product
problem- solving service or core benefits that consumers are really buying hen they obtain a product! Actual product incorporates the 'uality( features and design( brand name( pac)aging and other attributes that combine to deliver core product benefits! Augmented product incorporates the consumer services and benefits built around the core and actual products!

1. Product
1.3 Product classifications: Consumer goods

onsumer goods - products destined for use by ultimate consumers Industrial goods (also called B2B products) - contribute directly or indirectly to the output of other products for resale

1. Product
1.3 Product classifications: Consumer goods (contd) Consumer goods may be classified as follows:

onvenience goods
- e!g! ee)ly groceries

!hopping goods
-,!g! -urniture or ashing machines! .sually made only after advance planning and shopping around

!pecialit" goods
-,!g! /e ellery or more e0pensive items of clothing

#nsought goods
- 1oods that you did not reali2e you needed! ,!g ! 3atalogues that arrive in the post! 4

T"pes of onsumer Products

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T"pes of Industrial $oods

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1.4 Industrial goods

1. Product
1.4 Industrial goods These may be classified as follows:

Installations
- e!g! ma7or items of plant and machinery

Accessories
- 8uch as Pcs

%aw &aterials
- ,!g! Plastic( metal( ood( foodstuffs( chemicals

omponents
- ,!g! 9eadlights in ford cars or the Intel microchip in most Pcs!

!upplies
- ,!g! :ffice stationery( cleaning materials 1;

'. %eviewing the Product

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'.1 (e" factors for consideration

Product &i)
<ange 8egmentation and positioning -eatures( advantages and benefits =-A>? .ni'ue selling proposition =.8P? Differentiation@ - unfulfilled preferences >randing Pac)aging Aalue Product life cycle =P#3? Portfolio anlaysis@ =>oston 3onsulting 1roup Batri0? Directional policy matri0 =Ansoff? <esearch and development Ce product development

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'. %eviewing the Product

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'.' The product audit

Definition:

A s"stematic appraisal of a firm*s product mi) to evaluate its strengths and wea+nesses and to assess the available opportunities. opportunities.
httpDEE !term i)i!comE,CDproductFaudit

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'. %eviewing the Product

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'., -eatures. advantages and benefits (-A/)

People do not bu" products. they buy what products can do for them.
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-eature Product Plastic "able Pine

Advantages

/enefit
"ime-saving Portable ,conomy of initial outlay ,conomy through lo replacement fre'uency 8tatus "ime-8aving #o replacement Baintenance costs

,asier to clean #ighter 3heaper 8turdier Bore fashionable Bore resistant to stains Gill carry heavier eights

8teel

14 Figure 2 Features, advantages and benefits (FAB) schedule

'. %eviewing the Product

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'., -eatures. advantages and benefits (-A/)

Advantage statements always contain a comparative, that is: fast; faster (comparative); fastest (superlative); Easier; Lighter; Cheaper; Studier; More fashionable; More resistant; Heavier Promotional messages should not dwell on the features of the product, but should concentrate on the advantages so as to leave potential customer in no doubt about what the benefits are. Better for Your Health Longer Lasting Flavor More Miles per Gallon 1*

'. %eviewing the Product

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'.0 #ni1ue selling proposition (#!P) Aspects of a product( service( offering or transaction hich distinguishes it from all others!
- ,!g! core product and its features( pricing( branding distribution outlets( terms of trading and other factors of the product augmentation!

'.2 3ifferentiation "he distinctiveness in the product or service being offered as perceived by the mar)et by reference to any aspect of the mar)eting mi0
- "he attractive of difference is clear in many aspects of the mar)et
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'. %eviewing the Product

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'.4 Pac+aging
Pac)aging has five functions and usually pac)aged in more than one form Ph"sical protection of contents 3istribution. helping to transfer products !elling. as the design and labeling serving promotional ob7ectives #ser convenience( as an aid to use( storage an carrying( such as aerosol cans and handy pac)s "o conform to government regulations especially on hygiene or content
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"he Product #ife 3ycle =P#3? $ cont%d&

"his process of hat happens to a product is called the Product #ife 3ycle! It is usually dra n as a graph li)e the one belo !

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Summary of product life-cycle characteristics, objectives and strategies Source: Philip Kotler, Marketing Management: Analysis, planning, implementation, and control, 11th edn, 2003, p. 340. Reprinted by permission of Pearson Education, Inc., Upper Saddle River, NJ.

,0tending the Product #ife 3ycle

Ghen a product reaches the maturity or saturation stage of its product life cycle( a business may stop sales starting to fall by adopting e0tension strategies! "hese are ays that sales may be given a boost! 8ome possible ays business might e0tend the life cycle of their products are sho n in the diagram belo D

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,0tending the Product #ife 3ycle

If the extension strategies are effective, the maturity phase of the product life cycle will be prolonged. An example of what might happen is shown in the diagram below:

Businesses will not usually manufacture just one product. They will have a range of products at different stages of the product life cycle. E.g. a business will need to have products coming up into the growth phase to counteract those that are in decline.

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4! Product <ange and Port-olio

0.1 The product range
Definition:

A set of variations of the same product platform that appeal to different market segments!
http566 http566www.businessdictionar".com6definition6product www.businessdictionar".com6definition6product7 7range.html

Example for winter coats. They are different in styles, sizes and materials that coats could be made of for different market segments.

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4! Product <ange and Port-olio

0.' Product portfolio planning

!hould a compan" invest mone" in a declining or a cash generating product8 Poor balance of product range (colors. si9es. materials. etc) affects cash position.
"he product mi0 can be e0tended in a number of ays byD Introducing variations =models or style? 3hanging the 'uality of products offered at different price levels Developing associated items =paint manufacturer introducing paint brushes? Developing ne products that have little technical or mar)eting relationship to e0isting range!
The underlying assumption- In the growth-share matrix is that larger market share will enable the business to benefit from economies of scale, lower per-unit costs and thus higher margins.

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"he >31 Batri0

Relative Market Share Market Growth Rate
High Stars ( ) High
High growth & share Profit potential May need hea y in estment to grow

Low Question Marks (?)

(Problem Child)

High growth, low share Build into Stars/ phase out Requires cash to hold market share

Cash Cows Low

!ow growth, high share "sta#lished, successful SB$%s Produces cash

Dogs
!ow growth & share !ow profit potential

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4! Product <ange and Port-olio

0.' Product portfolio planning (contd)
Problem child (or question mark): a small market share but in a high growth industry. The generic product is clearly popular, but customer support for the company brand is limited The star: this is a product with a high market share in a high growth industry. By implication, the star has potential for generating significant earnings currently and in the future The cash cow: a high market share but in a mature slow growth market. Typically, a well established product with a high degree of consumer loyalty. Product development costs are typically low and the marketing campaign is well established. The cash cow will normally make a substantial contribution to overall profitability. The dog: a product characterized by low market share and low growth. Again, typically a well established product, but one which is apparently losing 26 consumer support and may have cost disadvantages.

4! Product <ange and Port-olio

The BCG framework provided by the matrix can offer guidance in terms of developing appropriate strategies for products and in maintaining a balanced product portfolio, ensuring that there are enough cashcash-generating products to match the cashcash-using products.
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*! >randing

Definition
The device for distinguishing a product or service from all others. This may be a name, symbol or any other device which is unique to the company and is its legal entitlement. Branding is the practice and technique of creating, devising and communicating such a device.
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*! >randing
A brand is shorthand for all the FAB characteristics which we associate with it.

Major brands of today:

Microsoft, Kelloggs, Cadburys mars, Heinz

Brands in industrial sector:

ICI Brands in retail sector sector: Marks & Spencer, Harrods, Sainsburys A brand stands for things like quality, reliability, trust, status, and in the case of the food brand, wholesomeness, purity, nutrition.

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*! >randing $ cont%d&

5.1 The power of the brand

A brand name increases the value of the product in the eyes of the customers. They associate with the name, symbol, device or packaging, some other factor of value which a beyond the core product.
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*! >randing $ cont%d&

Brand Leadership
Definition:

The brand which consistently holds the largest market share when measured by brand sales. You should note that there are some manufacturers who make a number of brands and therefore may be said to hold a larger share of the product market than the brand leader.
The world famous brands have not become so by accident. It takes great dedication on the part of the company, who owns a brand to make it a household name. Famous names which were the brand leaders of 1933: Hovis Bread, Kelloggs Corn Flakes; Cadburys Chocolate; Schweppes mineral waters; brooke Bond Tea; Colgate Toothpaste; Kodak Film; Heinz Beans; mars bars.

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>randing $ cont%d&
5.2 Brand Leadership
Brand leaders continually defend the quality of their output and its relevance to consumers over a long time. It is also the outcome of consistently putting before the customer the right concept and image through effective communication. Advertising, public relations and packaging all play their part in ensuring this continuity. Many customers could be said to buy some of these products instinctively. They are instinctively loyal to the brand name largely because it has never let them down in delivering the values that they cherish. 32

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According to the Biggest brands 2000 report, these are the top ten brands in the UK.
!ales :m 40; 04; ,0; '4; '02 ',2 ',; 1@2 1@2 1@; Advertising spend :m '4.4 =.= ''.= 2.4 ',.1 ?.4 @.; ?.= =.2 @.4

oca ola <al+ers >escafe !tella Artois Persil &uller Andre) Pampers Pepsi Ariel

*! >randing $ cont%d&
5.2 Brand Leadership (Contd)
Brand preference: the degree to which customers express their inclination to select the brand of their choice by reference to their purchasing habits or by their asking for a given brand Brand loyalty: the extent to which consumers of a brand tend to re repurchase in the face of continuing availability of alternatives Brand switching: the disposition to change brands for marginal gains in price or perceived value Brand positioning: the strategy to ensure that the brand, in the eyes of the public, has a distinct position in the market with reference to quality, style, status, price or a combination of these.
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*! >randing $ cont%d&
5.3 Brand Positioning
Brand positioning is one of the techniques which is critical in developing a brand leader. Each brand should have a unique niche (place), independent of the similarity of the substance of the products with which it competes. Discovering a niche in the market can be the first step in developing an effective brand.
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*! >randing $ cont%d&
5.5 Scaling techniques
Scaling techniques are derived from psychology and are used to determine the nature and intensity of an individuals attitudes towards objects or ideas: thus they are frequently called attitude scales. The most commonly used in market research into consumer behaviour are the Likert Scale, where respondents are asked to express their agreement or otherwise with a statement about the characteristics of a brand, and the Semantic Differential Scale, where the technique involves respondents indicating a notional value on a scale between two poles such as expensive/cheap. Examples are given below.
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+! "he Ansoff 1ro th Batri0 The Ansoff matrix is one of the most ell!"no and ell used strategic frameworks for considering ways to achieve growth. #n order to gro , companies ma$ use various combinations of product and mar"et decisions.
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Developing Growth Strategies

Product/ Market Expansion Grid

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Developing Growth Strategies

Product/ Market Expansion Grid