PRODUCT

1. PRODUCT The First of the Four “Ps” of the Marketing Mix

2. What is a product? Physical objects Services People’s expertise Places Membership in an organization Ideas

3. What is a product? “A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.” “A product may be defined as everything, both favorable or unfavorable, that a person or organization receives in an exchange.”

4. Total Product includes: Image of the retail store Service before and after sale Color Attachments Image of the brand warranty Packaging Instructions

5. Module 8 Product The Product

6. Module 8 Product The Core Product Basic benefits Transportation Carrying cargo Pulling capacity Excitement Image enhancement

7. Module 8 Product Actual Product Features Package Brand Quality Appearance Engine size Color Body styling Interior & exterior design Options available

8. Module 8 Product Augmented Extras Warranty Maintenance/service contract Delivery Credit/Financing Dealer parts & labor department Free lubrication & oil change Get-out-of-jail-free card

9. Module 8 Product Marketers should NEVER sell products to consumers!!! People buy holes, not drills! Fashion, status, reference groups approval, and warmth, but not coats!

10. Module 8 Product Types of Consumer Products

11. Module 8 Product TYPES OF BUSINESS PRODUCTS Installation Accessories Raw materials Components Professional services Supplies

12. What is a new product?(Management Perspective) New-to-the-world products Product category extensions Product line extensions Product improvements Cost reductions Repositioning

13. Module 8 Product Unique and unfamiliar to consumers (Discontinuous Innovation) Significantly new, but familiar in form or use to the consumer (Dynamic Continuous Innovation) Improvements on an existing product or service (Continuous Innovation) What is a new product?(Consumer Perspective)

14. Product Assortment strategies Depth Width Consistency/Variety

15. Product lines vs Product mix[ extensions & contradictions] PRODUCT LINE = Products related by use or nature PRODUCT MIX = All products sold by a specific company PRODUCT LINE EXTENSIONS = products added to an existing product line (Mach 3 razor) PRODUCT LINE CONTRADICTIONS = Existence of excessive variations within a product line (6 sizes of Heads & Shoulders Shampoo or 13 flavors of ice tea)

16. Module 8 Product Newness, Technology, Risk Model

17. Module 8 Product CHARACTERISTICS OF A POTENTIALLY SUCCESSFUL PRODUCT INCLUDE... RELATIVE ADVANTAGE is an enhanced bundle of benefits or clear-cut advantages over existing offerings COMPATIBILITY WITH EXISTING CONSUMPTION PATTERNS requires similar usage, consumption behaviors, values, attitudes, beliefs, tastes,etc. as existing offerings

18. Module 8 Product CHARACTERISTICS OF A POTENTIALLY SUCCESSFUL PRODUCT INCLUDE... TRIALABILITY is the opportunity for buyer testing through sampling or divisibility of the product OBSERVABILITY is the opportunity for buyers to see the newness SIMPLE TO UNDERSTAND, USE, OPERATE, or provides a significant benefit that offsets the complexity of the product itself.

19. Module 8 Product REASONS FOR PRODUCT FAILURES INCLUDE...... Failure to satisfy the previous five conditions Inadequate or superior Planning Poor execution Technical problems Poor timing

20. Module 8 Product LET’S TRY APPLYING THESE CONCEPTS

21. Module 8 Product PRODUCT PORTFOLIO CONCEPT The PPC stresses that the cash flows for the complete mix of products should be considered rather than concentration on isolated problems of the individual products. Yes….but

22. Module 8 Product THE GOODS-SERVICES CONTINUUM

23. Module 8 Product Product Obsolescence Technical obsolescence Fashion obsolescence Functional obsolescence Planned vs unplanned obsolescence

24. Module 8 Product PRODUCT’S ENVIRONMENTAL IMPACT AND SAFETY Biodegradability Secondary use Pollution potential Recyclable Use of natural resources Child safety Protection against wrongful use of product

25. Module 8 Product HOW DOES A MARKETER USUALLY GO ABOUT DEVELOPING A NEW PRODUCT CONCEPT: A FIVE STEP PROCESS IDEA GENERATION SCREENING BUSINESS ANALYSIS DEVELOPMENT COMMERCIALIZATION

26. Module 8 Product A planned, ongoing process Primary research Secondary research Marketing intelligence Employees, channel members, competitors, customers Brainstorming Product development department Consultants General public

27. Module 8 Product Clear definition of SWOT What business are we in? Corporate goals and objectives Is there a real need for the product? Stakeholder concept testing Do we have the resources to successfully introduce the product? Potential financial payoff (ROE,ROI, GMROI, BEP, ROS) Compatibility with existing products?

28. Module 8 Product Tactical Plans Product features Market and production research Sales and profit forecasts Resource requirements What is the likely demand for the product? What impact would the new product have on TOTAL sales, profits, market share, and ROI (cannibalization)? Would current stakeholders benefit from the product?

29. Module 8 Product Impact on image and overall image? How might competitor’s respond? What is the risk of failure? Is the company willing to take the risk? New facilities needed? Etc……...

30. Module 8 Product Creation of prototype Production engineering Continued R & D Concept testing with prototypes Decisions concerning pricing, promotion, and distribution Supply chain development Final government approvals if required - - - - - - - - - - - - Test marketing (field or in-house)

31. Module 8 Product Field Testing Similarity to planned distribution outlets Relative isolation from other cities Availability of appropriate media Representation demographics No atypical purchasing habits Not easily “jammed” by competitors Availability of research and audit services Freedom from unusual influences Stability of year round sales

32. Module 8 Product Full scale production and distribution Local, regional, national or international rollout Measurement and feedback of results against forecasts and benchmarks

33. Module 8 Product Your new idea ???

34. Module 8 Product

35. Module 8 Product

36. Module 8 Product TYPES OF BRANDS MAUFACTURER’S BRANDS = Name is owned and advertised by the manufacturer or under their guidelines DISTRIBUTOR’S OR PRIVATE BRANDS = Name is owned and controlled by a wholesaler or retailer Private Labels Private Stock “Generic”

37. Module 8 Product BRANDING DEFINITIONS Brand: Any name, term, symbol, sign, design, sound, or unifying combination of these that identifies one product from another competitive product Brand Name: the verbal part of the brand Logo: a brand name or company name written in a distinctive way Trademark: A legally protected brand name or brand mark. A registered trademark gives a marketer proprietary rights to a symbol or name.

38. Module 8 Product BRANDING DEFINITIONS Service mark: provides the same identifying function for services that a trademark provides for goods. It can also be legally protected by registration Generic Name: describes a product or an item that is, or has become part of our standard vocabulary (scotch tape, kerosene, linoleum)

39. Module 8 Product SELECTING A BRAND NAME Easy to remember and pronounce Short and distinctive Invokes a positive connotation Suggests product function Suggests an image Communicates attributes and benefits Communicates something about the users Avoids linguistic traps Translates globally well

40. Module 8 Product BREADTH OF BRAND NAMES FAMILY: a single brand name for a product line (Campbell’s Soups) INDIVIDUAL: separate brand names for items within a line (Snickers, Milky Way, Three Musketeers) COMBINATION OF ABOVE: (Kellogg’s Rice Krispies) WORLD: ( Levi’s, Marlboro, Coca-Cola ) Concept of Co-branding Brand Equity = Market share or profit margin increases due to goodwill that may be licensed to other firms

41. Module 8 Product PACKAGING AND LABELING Packaging Requirements: See Handout Labeling Persuasive labeling Informational Labeling Optional Required by law Universal Product Codes (UPS) Warranties (written guarantee) Express (limited or unlimited) Implied

42. Module 8 Product Packaging and Labeling In groups of five, take the product, package, and label you have been given in class and redesign the name, packaging and labeling. Be sure to refer to your notes. You will then be asked to report to the class on your ideas.

43. Module 8 Product PRODUCT LIFE CYCLE The concept of the PRODUCT LIFE CYCLE is an extremely important topic. However, due to a need to illustrate many of the dynamics of the model, we will use the chalkboard and overheads. Key topics will include… The Adoption Process The Diffusion Process Profit and Sales Curves Fads, fashions and styles The marketing mix at each stage Strategic marketing implications Three “Trickle” theories