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PRODUCT STRATEGY

Professor Chip Besio Cox School of Business Southern Methodist University. PRODUCT STRATEGY. Augmented Product. What Is the Product?. Installation. Packaging. Features. Brand Name. Delivery & Credit. After- Sale Service. Core Benefit or Service. Quality Level. Design.

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PRODUCT STRATEGY

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  1. Professor Chip Besio Cox School of Business Southern Methodist University PRODUCT STRATEGY

  2. Augmented Product What Is the Product? Installation Packaging Features Brand Name Delivery & Credit After- Sale Service Core Benefit or Service Quality Level Design Actual Product Core Product Warranty

  3. Types of Products • Consumer • Industrial • Other Entities • Organizations • Persons • Places • Ideas

  4. Types of ProductsCONSUMER PRODUCTS • Convenience Products • Buy frequently & immediately • Low priced • Many purchase locations • Includes: • Staple goods • Impulse goods • Emergency goods • Shopping Products • Buy less frequently • Gather product information • Fewer purchase locations • Compare for: • Suitability & Quality • Price & Style • Specialty Products • Special purchase efforts • Unique characteristics • Brand identification • Few purchase locations • Unsought Products • New innovations • Products consumers don’t • want to think about • Require much advertising & • personal selling

  5. Types of ProductsINDUSTRIAL PRODUCTS Materials and Parts Capital Items Supplies and Services

  6. Characteristics of Services Can’t be seen, tasted, felt, heard, or smelled before purchase Can’t be separated from service providers Quality depends on who provides them and when, where and how Can’t be stored for later sale or use Intangibility Inseparability Variability Perishability

  7. Individual Product Strategy Decisions • Attributes • Packaging • Labeling • Product Support

  8. Product Attributes - Where Do They Come From? Quality Features Design

  9. Packaging Competitive Advantages Product Safety Sales Tasks Packaging Labeling Identifies Promotes Describes

  10. Multi-Product Strategy Decisions • Branding • Product Lines • Product Mix • Variety • Assortment

  11. Brand Name Selection Protection Major Brand Decisions Brand Sponsor Manufacturer’s Brand**Co-branding Private Brand**Licensed Brand Brand Strategy Line Extensions***Brand Extensions Multi-brands***New Brands

  12. Line Extension Brand Extension Product Category Currently Served New Multi-brand New Brand Existing BrandName New Brand Strategy

  13. Brand Strategy • Line Extension • Existing brand names extended to new forms, sizes, and flavors of an existing product category • Brand Extension • Existing brand names extended to new product categories • Multi-brands • New brand names introduced in the same product category • New Brands • New brand names in new product categories

  14. Close-Up Cheerios Crest Froot Loops B C 8 8 Original Market 6 6 4 4 2 2 0 0 Higher income REALITY Breath Mint Toothbrush Waffles Lollipops Coors Camay Apple Budweiser Irish Spring IBM Segment 2 8 8 8 Higher price, & benefits 6 6 6       D E C 4 4 4 2 2 2 D E New Market 0 0 0 Bottled Moisturizer Deodorant Video Games Cellular Phone Scotch Water Brand StrategyBRAND EXTENSION • Brand associations determine which brand extensions will be successful Source: Wes Hutchinson

  15. Close-Up Cheerios Crest Froot Loops B C 8 8 Original Market 6 6 4 4 2 2 0 0 Higher income REALITY Breath Mint Toothbrush Waffles Lollipops Coors Camay Apple Budweiser Irish Spring IBM Segment 2 8 8 8 Higher price, & benefits 6 6 6       D E C 4 4 4 2 2 2 D E New Market 0 0 0 Bottled Moisturizer Deodorant Video Games CellularPhone Scotch Water Brand StrategyBRAND EXTENSION Close-Up's singles-oriented, "romantic" image extended best to breath mints; Crest's family-oriented "dental health" image extended best to toothbrushes. Apple's "user-friendly" image extended best to video games; IBM's "serious business" image extended best to cellular phones. Source: Wes Hutchinson

  16. Variety - number of different product lines Product Mix Product Mix - all the product lines offered Assortment - number of items within product lines

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