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Product, Services,

and Branding
Strategies
Chapter 8 & 9

1
What is a Product?
Goods, Services, and Experiences
Market offerings, pure tangible goods, pure services,
experiences

Levels of Product
and Services
Core benefit, actual
product, and
augmented product
Product Classifications
Typical products are of two types:
* Consumer products * Industrial products
And we will concentrate mostly on consumer products here.

Types of Consumer Frequent purchases


Products bought with minimal
buying effort and little
comparison shopping
Convenience
Low price
Shopping Widespread distribution
Specialty Mass promotion by
Unsought producer
Product Classifications (contd.)

Types of Consumer Less frequent purchases


Products requiring more shopping
effort and price, quality, and
style comparisons.
Convenience
Higher than convenience
Shopping good pricing
Specialty Selective distribution in
fewer outlets
Unsought
Advertising and personal
selling by producer and
reseller
Product Classifications (contd.)

Types of Consumer Strong brand preference


Products and loyalty, requires
special purchase effort,
little brand comparisons,
Convenience and low price sensitivity
Shopping High price
Specialty Exclusive distribution
Unsought Carefully targeted
promotion by producers
and resellers
Product Classifications (contd.)

Types of Consumer Little product awareness


Products and knowledge (or if
aware, sometimes
negative interest)
Convenience
Pricing varies
Shopping Distribution varies
Specialty Aggressive advertising
Unsought and personal selling by
producers and resellers
Goods and Service Decisions

Key Decisions Product attributes


Quality,
features, style
Individual Product and design
Branding
Product Line
Packaging
Product Mix
Labeling
Product support
services
Goods and Service Decisions (contd.)

Key Decisions Product line length


Line stretching:
Individual Product adding products that
are higher or lower
Product Line
priced than the
Product Mix existing line
Line filling: adding
more items within the
present price range
Product and Service Decisions (contd.)

Key Decisions Product line width:


number of different product
lines carried by company
Individual Product Product line depth:
Product Line Number of different versions
of each product in the line
Product Mix Product line consistency
Branding
Brand is something emotional, psychological having an added
dimension created over the years often with the help of creative
and imaginative advertising.
brands are not just products, but creating, maintaining,
protecting, and enhancing products.
A brand is a name, term, sign, symbol, or design, or a
combination of these, that identifies the maker or seller of a
good or service.
Marketing is at its peak when powerful brands are created
Brand Equity is the positive differential effect that the brand
name has on customer response to the good or service.
Provides:
More brand awareness and loyalty
Basis for strong, profitable customer relationships
Services?
Any activity or benefit that one party can
offer to another that is essentially intangible
and does not result in ownership of anything.

Services are a form of products.


Services: Features
Intangibility
Consumers look for service quality signals
Inseparability
Services cant be separated from providers

Heterogeneity
Difficult to standardize, harder to control
Design, Production and Delivery
Perishability
Services cant be inventoried for later sale
New-Product
Development & Product
Life-Cycle Strategies

14
Strategic Reason for Product Development
In a competitive market where businesses have easy access
and profits are worth while pursuing, the market will be lively &
active
but at the end of the day the profit will decline and the market
will be less attractive
also consumers have different and ever-changing tastes &
habits that can quickly change the demand for a product
to overcome these businesses need to continuously develop
products, through either of the ways:
adding new products to the range
modifying or extending existing products
recombining and repackaging products
some combination of the above
New Product Development
Development of original products, product
improvements, product modifications, and new
brands through the firms own R&D efforts.

New Product Development Strategy


New products can be obtained via acquisition or
development.
New products suffer from high failure rates.
Several reasons account for the failure.
Usual Process of Product Development
Stage 1: Idea Generation
Internal idea sources:
R&D
External idea sources:
Customers, competitors, distributors, suppliers
Stage 2: Idea Screening
Product development costs increase substantially in later
stages.
Ideas are evaluated against criteria; most are eliminated.

Stage 3: Concept Development and Testing


Product concepts provide detailed versions of new
product ideas.
Concept tests ask target consumers to evaluate product
concepts.
Usual Process of Product Development
Stage 4: Marketing Strategy Development
Strategy statements describe:
The target market, product positioning, and sales, share, and profit
goals for the first few years.
Product price, distribution, and marketing budget for the first year.
Long-run sales and profit goals and the marketing mix strategy.
Stage 5: Business Analysis
Sales, cost, and profit projections

Stage 6: Product Development


Prototype development and testing

Stage 7: Test Marketing

Stage 8: Commercialization
Product Life-Cycle Strategies
The Typical Product Life Cycle (PLC) Has Five Stages
Sales and
Profits (Tk.)

Sales

Profits

Time
Product Introduction Growth Maturity Decline
Develop-
ment

Losses/
Investments (Tk.)

But NOT all products follow this cycle!!


Product Life-Cycle Strategies (contd.)

PLC Stages Begins when the


company develops a
Product development new-product idea
Introduction Sales are zero
Growth
Investment costs are high
Maturity
Decline
Profits are negative
Product Life-Cycle Strategies (contd.)

PLC Stages Low sales


Product development High cost per customer
Introduction acquired
Growth Negative profits
Maturity Innovators are targeted
Decline Little competition
Marketing Strategies:
Introduction Stage

Product Offer a basic product


Price Use cost-plus basis to set
Marketing Objectives Create product awareness and
trial
Distribution Build selective distribution
Advertising Build awareness among early adopters
and dealers/resellers
Sales Promotion Heavy expenditures to create trial
Product Life-Cycle Strategies (contd.)

Rapidly rising sales


PLC Stages Average cost per
customer
Product development
Rising profits
Introduction
Early adopters are
Growth
targeted
Maturity
Growing competition
Decline
Goods/services are
fine-tuned
Marketing Strategies:
Growth Stage

Product Offer product extensions, service, warranty


Price Penetration pricing
Marketing Objectives Maximize market share
Distribution Build intensive distribution
Advertising Build awareness and interest in the mass
market
Sales Promotion Reduce expenditures to take advantage
of consumer demand
Product Life-Cycle Strategies (contd.)

PLC Stages Sales peak


Low cost per customer
Product development
High profits
Introduction
Growth Middle majority are
Maturity targeted
Decline Competition begins to
decline
Marketing Strategies:
Maturity Stage
Product Diversify brand and models
Price Set to match or beat competition
Marketing Objectives Maximize profit while
defending market share
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits
Sales Promotion Increase to encourage brand
switching
Product Life-Cycle Strategies (contd.)

PLC Stages
Declining sales
Product development
Low cost per customer
Introduction
Growth Declining profits
Maturity Laggards are targeted
Decline
Declining competition
Marketing Strategies:
Decline Stage

Product Phase out weak items


Price Cut price
Marketing Objectives Reduce expenditure and
get the most out of the brand
Distribution Use selective distribution: phase out
unprofitable outlets
Advertising Reduce to level needed to retain
hard-core loyalists
Sales Promotion Reduce to minimal level