TOPIC:

PRODUCT
2
The Marketers tool kit for value
creation
• Session discussion
• What is a Product?
• Product and Services Decisions
• Branding Strategy: Building Strong Brands
• New Product Development Process (NPD)

3
What Is a Product?

Product is anything that can be offered in a market

for attention, acquisition, use, or consumption
that might satisfy a need or want
Service is a product that consists of activities,
benefits or satisfaction that is essentially
intangible and does not result in the ownership of
anything
Experiences represent what buying the product or
service will do for the customer

http://www.marriott.com.au/default.mi
 What Is a Product?
Levels of Product and Services

the design, brand name, and

packaging that delivers the
core benefit to the customer

what the buyer is really buying.

additional services or benefits of

the actual product
Levels of Product and Services
Potential – All future
features and capabilities of
the product
Potential Product
Augmented Product
Augmented – Differentiated
features and capabilities
Expected Product

Generic Product Expected – Base set of

Expected
Core
buyer’s expectations about
Product
Benefit
product

Generic – very basic form

of product

Core – fundamental service

being acquired
What Is a Product?
Product and Service Classifications

Consumer
products
Industrial
products
Product and Service Classifications

• Consumer products are products and services

for personal consumption
• Classified by how consumers buy them
• Convenience products ( Newspapers, Candy, Fast
food)
• Shopping products (Furniture, Cars, Appliances)
• Specialty products (Medical services, Designer
clothes, High-end electronics)
• Unsought products (Life insurance, Funeral services,
Blood donations)
Product and Service Classifications

Industrial products
products purchased for further processing or for
use in conducting a business
• Classified by the purpose for which the product is
purchased
• Materials and parts
• Capital
• Raw materials
Product and Service Decisions

Individual Product and Service Decisions

Product or service attributes
communicate and deliver the benefits
• Quality
• Features
• Style and design
 Sustainable product….

• Sustainable products are

those products that provide environmental,
social and economic benefits while
protecting public health and environment
over their whole life cycle, from the
extraction of raw materials until the final
disposal
Sustainable product…..
Product and Service Decisions

Brand is the name, term, sign, or

design—or a combination of
these—that identifies the maker
or seller of a product or service

What brands do you tend to

purchase consistently? Why?
The roles of brands for consumers

Set and fulfill expectations

 Reduce risk
 Simplify decision making
 Take on personal meaning
 Become part of identity

• (Kotler and Keller, 2016)

The roles of brands for firm

 Simplify product handling

 Organize inventory & accounting
 Offer legal protection
 Create brand loyalty
 Secure competitive advantage

(Kotler and Keller, 2016)

Branding and Brand equity

• Branding
• The process of endowing products and services
with the power of a brand
• Brand equity
• Added value endowed to products with
consumers
• Customer-based brand equity
• The differential effect brand knowledge has on
consumer response to the marketing of that brand
• Brand promise
• The marketer’s vision of what the brand must be
and do for consumers (Kotler and Keller, 2016)
Brand equity models

• BrandAsset Evaluator
• Energized differentiation, Relevance, Esteem,
Knowledge
• Brandz Model
• Meaningful, different, & salient associations
• Power, premium, & potential outcomes
• Brand Resonance Pyramid
• Stages of brand development
• Brand building blocks
• Branding objectives at each stage
(Kotler and Keller, 2016)
Building brand equity

• Brand equity drivers

• Brand element or identity choices
• Product & accompanying marketing
• Other associations
• Brand element choice criteria
• Memorable, Meaningful, Likable, Transferable,
Adaptable, Protectable

(Kotler and Keller, 2016)

Devising a brand strategy

• Three main choices:

• Can develop new brand elements for
new product
• Can apply some of existing brand
elements
• Can use a combination of new & existing
brand elements
(Kotler and Keller, 2016)
Developing and establishing a brand
positioning

• Determining a Competitive Frame of Reference

• Identifying Optimal Points-of-Difference and
Points-of-Parity
• Choosing POPs and PODs
• Brand Mantras
• Establishing Brand Positioning
• Communicating category membership
• Communicating POPs and PODs
(Kotler and Keller, 2016)
Product and Service Decisions

Packaging involves designing and

producing the container or wrapper
for a product
Labels identify the product or brand,
describe attributes, and provide
promotion
Specific factors for sustainable
design of packaging may include:
• Use of minimal materials
• Logistics efficiency
• Energy efficiency
• Recycled content
• Recyclability : Reusable packaging
• Use of renewable resources in packaging
• Use of biodegradable materials
• Avoid the use of materials toxic to humans or the
environment
• Worker impact: occupational health, safety, clean
technology, etc.
• https://www.lush.com.au/shop/info/76/
Labelling
Product Portfolio/
Product Mix/
Product Range

is the variety of products offered for

sale
Why have a range of products?

The benefits of
having a wide
• Target different markets product portfolio
• Meet customers’ differing needs
• Spread the risk
• To help maximise sales and profits

Those companies that have a large range of

products are referred to as having an extensive
product portfolio
 Product and Service Decisions
Product Mix Decisions
Product mix consists of all the products and items
that a particular seller offers for sale
• Product mix width is the number of different product
lines the company carries.
• Product mix length is the total number of items the
company carries within its product lines.
• Product mix depth is the number of versions offered of
each product in the line.

https://www.youtube.com/watch?v=3m_x_zqqtQ0
http://www.pg.com/en_ANZ/
Product and Service Decisions
Product Line Decisions

Product line is a group of products that are

closely related because they function in a
similar manner, are sold to the same
customer groups, are marketed through
the same types of outlets, or fall within
given price ranges

http://www.adidas.com.au/
New-Product Development Strategy
Two ways to obtain new products

Acquisition refers to the buying of a whole

company, a patent, or a license to produce
someone else’s product

New product development refers to original

products, product improvements, product
modifications, and new brands developed
from the firm’s own research and
development
New-Product Development Process
Major Stages in New-Product Development
New-Product Development Process
Idea Generation
Idea generation is the systematic search for new-
product ideas
Sources of new-product ideas
• Internal
• External
 New-Product Development Process
Idea Generation

Internal sources refer to the company’s own formal

research and development, management and staff, and
intrapreneurial programs
External sources refer to sources outside the company
such as customers, competitors, distributors, suppliers,
and outside design firms
New-Product Development Process
Idea Screening

• Identify good ideas and drop poor ideas

• R-W-W Screening Framework:
• Is it real?

• Can we win?

• Is it worth doing?
New-Product Development Process
Concept Development and Testing
Product idea is an idea for a possible product
that the company can see itself offering to
the market
Product concept is a detailed version of the idea
stated in meaningful consumer terms
Product image is the way consumers perceive an
actual or potential product
New-Product Development Process
Marketing Strategy Development
Marketing strategy development refers to
the initial marketing strategy for
introducing the product to the market
Marketing strategy statement includes:
Description of the target market
Value proposition
Sales and profit goals
New-Product Development Process
Marketing Strategy Development

Test marketing is the stage at

which the product and marketing
program are introduced into
more realistic marketing settings

Provides the marketer with

experience in testing the product
and entire marketing program
before full introduction
New-Product Development Process

Commercialization is the introduction

of the new product
• When to launch
• Where to launch
• Planned market
rollout
Product Life-Cycle Strategies
Product Life-Cycle Strategies
• Product development
• Sales are zero and investment costs mount
• Introduction
• Slow sales growth and profits are nonexistent
• Growth
• Rapid market acceptance and increasing profits.
• Maturity
• Slowdown in sales growth and profits level off or decline
• Decline
• Sales fall off and profits drop 41
Product Decisions and Social
Responsibility

Public policy and regulations regarding

developing and dropping products,
patents, quality, and safety