CHAPTER NINE

Elements of Product
Planning for Goods
and Services

For use only with

Perreault and McCarthy
texts.
© 2005 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin www.mhhe.com/fourps
When we finish this lecture you should

1. Understand what “Product” really means.

2. Know the key differences between goods and
services.
3. Know the differences among the various
consumer and business product classes.
4. Understand how the product classes can help
a marketing manager plan marketing
strategies.
5. Understand what branding is and how to use it
in strategy planning.

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

When we finish this lecture you should

6. Understand the importance of packaging in

strategy planning.
7. Understand the role of warranties in strategy
planning.

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Exhibit 9-1
The Product Area Involves Many Strategy Decisions

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Product Quality and Customer Needs

+
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Relative Quality

+
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Exhibit 9-2
Goods and/or Services Are the Product

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Differences in Goods and Services

+
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Interactive Exercise: Attribute Ratings

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Whole Product Lines Must Be Developed Too

+
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Product Assortment, Product
Line or Individual Product?

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Product Classes Help Plan Marketing Strategy

Consumer Products Business Products

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Consumer Product Classes

Staples
Staples

Convenience
Convenience Products
Products Impulse
ImpulseProducts
Products

Emergency
EmergencyProducts
Products

Homogeneous
Homogeneous
Shopping
ShoppingProducts
Products
Shopping
ShoppingProducts
Products
Heterogeneous
Heterogeneous
Shopping
ShoppingProducts
Products
Specialty
SpecialtyProducts
Products
New
New Unsought
Unsought
Products
Products
Unsought
UnsoughtProducts
Products
Regular
RegularUnsought
Unsought
Products
Products
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One Product May Be Seen Several Ways

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Business Products Are Different

Derived
Derived Demand
Demand

Inelastic
Inelastic Industry
Industry Demand
Demand

Tax
Tax Treatments
Treatments Differ
Differ

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Business Product Classes – How They Are Defined

Accessories
Accessories

Raw
Raw
Installations
Installations Materials
Materials
Business
Business
Product
Product
Classes
Classes Component
Professional
Professional Component
Services Parts
Parts &&
Services
Materials
Materials

MRO
MRO Supplies
Supplies

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Interactive Exercise: Business Product Classes

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Exhibit 9-5
Branding Needs a Strategy Decision, Too

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Conditions Favorable to Branding

Best
Best Value
Value for
for
the
the Price
Price
Easy
Easy to
to Dependable,
Dependable,
Easy
Easyandto
to
Label
Label and Widespread
Widespread
Identify
Identify
Identify
Identify Availability
Availability
Key
Key
Issues
Issues
Favorable
Favorable Market
Market Price
Price
Shelf
Shelf or
or Can
Can Be
Be High
High
Display
Display Space
Space Enough
Enough
Economies
Economies of
of
Scale
Scale
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Achieving Brand Familiarity Is Not Easy

Brand
Insistence

Brand
Preference

Brand
Recognition

Brand Non-
Recognition

Brand Rejection

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Brand Familiarity

+
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The Right Brand Name Can Help

Short & Simple

Easy to Spell & Read
Easy to Recognize & Remember
Easy to Pronounce
Can Pronounce in Only One Way
Can Pronounce in All Languages
Suggests Product Benefits
Meets Packaging/Labeling Needs
No Undesirable Imagery
Always Timely
Adapts to Any Advertising Medium
Legally Available for Use
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A Good Brand Name?

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Protecting Brand Names & Trademarks

Lanham
Lanham Act
Act

You
You Must
Must Protect
Protect
Your
Your Own
Own

Counterfeiting
Counterfeiting Is
Is Accepted
Accepted
In
In Some
Some Cultures
Cultures

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What Kind of Brand to Use?

Licensed
Licensed
Family
Family Brand
Brand Brand
Brand

Brand
Brand
Choices
Choices

Generic
Generic Individual
Individual
“Brand”
“Brand” Brand
Brand

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Who Should Do the Branding?

Manufacturer
Manufacturer Dealer
Dealer Brands
Brands
Brands
Brands
• Also called • Also called
national brands private brands
Battle or store brands
• Created/owned of the
by producers Brands • Created/owned
by middlemen
• Develop demand
across many • Create higher
markets margins for
dealers
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The Strategic Importance of Packaging

Packaging
Packaging Can
Can Packaging
Packaging Sends
Sends
Enhance
Enhance the
the aa Message
Message
Product
Product

Packaging
Packaging Can
Can
UPC
UPC Codes
Codes Lower
Lower
Speed
Speed Handling
Handling Distribution
Distribution Costs
Costs

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What Is Socially Responsible Packaging?

Laws
Laws Reduce
Reduce Confusion
Confusion &
& Clutter
Clutter

Ethical
Ethical Issues
Issues Remain
Remain

Unit
Unit Pricing
Pricing May
May Help
Help

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Warranty Policies Are a Part of Strategy Planning

Promises
Promises in
in Magnuson-
Magnuson-
Writing
Writing Moss
Moss Act
Act

Support
Support May
May May
May Improve
Improve
Be
Be Costly
Costly Marketing
Marketing Mix
Mix

Service
Service
Guarantees
Guarantees
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Key Terms

• Product • Emergency products

• Quality • Shopping products
• Service • Homogeneous shopping
products
• Product assortment
• Product line
• Heterogeneous shopping
products
• Individual product • Specialty products
• Consumer products • Unsought products
• Business products • New unsought products
• Convenience products • Regularly unsought
• Staples products
• Impulse products • Derived demand

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Key Terms

• Expense item • Brand name

• Capital item • Trademark
• Installations • Service mark
• Accessories • Brand familiarity
• Raw materials • Brand rejection
• Farm products • Brand nonrecognition
• Natural products • Brand recognition
• Components • Brand preference
• Supplies • Brand insistence
• Professional services • Brand equity
• Branding • Lanham Act

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Key Terms

• Family brand • Federal Fair Packaging

• Licensed brand and Labeling Act
• Individual brands • Unit-pricing
• Generic products • Warranty
• Manufacturer brands • Magnuson-Moss Act
• Dealer brands
• Private brands
• Battle of the brands
• Packaging
• Universal Product Code
(UPC)

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