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1. CHAPTER 10 Product Concepts Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10 2. Learning…
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  • 1. CHAPTER 10 Product Concepts Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10
  • 2. Learning Outcomes LO I LO 2 LO 3 Define the term product Classify consumer products Define the terms product item, product line, and product mix Describe marketing uses of branding LO 4
  • 3. Learning Outcomes Describe marketing uses of packaging and labeling Discuss global issues in branding and packaging Describe how and why product warranties are important marketing tools LO 5 LO 6 LO 7
  • 4. What Is a Product? Define the term product LO I
  • 5. What Is a Product? LO I Product <ul><li>Everything, both favorable and unfavorable, that a person receives in an exchange. </li></ul><ul><li>Tangible Good </li></ul><ul><li>Service </li></ul><ul><li>Idea </li></ul>
  • 6. What Is a Product? LO I Product is the starting point of Marketing Mix Promotion Place (Distribution) Price Product
  • 7. REVIEW LEARNING OUTCOME LO I Define the term product Product Good Service Idea
  • 8. Types of Consumer Products Classify consumer products LO 2
  • 9. Types of Products LO 2 Business Product Consumer Product A product used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other consumers. A product bought to satisfy an individual’s personal needs or wants
  • 10. Types of Consumer Products LO 2 Unsought Products Specialty Products Shopping Products Convenience Products Consumer Products Business Products Products
  • 11. Types of Consumer Products LO 2 Convenience Product Shopping Product Specialty Product Unsought Product A relatively inexpensive item that merits little shopping effort A product that requires comparison shopping, because it is usually more expensive and found in fewer stores A particular item for which consumers search extensively and are reluctant to accept substitutes A product unknown to the potential buyer or a known product that the buyer does not actively seek
  • 12. REVIEW LEARNING OUTCOME LO 2 Consumer Products
  • 13. Product Items, Lines, and Mixes Define the terms product item, product line, and product mix LO 3
  • 14. Product Items, Lines, and Mixes LO 3 Product Item Product Line Product Mix A specific version of a product that can be designated as a distinct offering among an organization’s products. A group of closely-related product items. All products that an organization sells.
  • 15. Campbell’s Product Lines and Mix LO 3
  • 16. Benefits of Product Lines LO 3 Equivalent Quality Efficient Sales and Distribution Standardized Components Package Uniformity Advertising Economies
  • 17. Product Mix Width LO 3 The number of product lines an organization offers. <ul><li>Diversifies risk </li></ul><ul><li>Capitalizes on established reputations </li></ul>Product Mix Width
  • 18. Product Line Depth LO 3 The number of product items in a product line. <ul><li>Attracts buyers with different preferences </li></ul><ul><li>Increases sales/profits by further market segmentation </li></ul><ul><li>Capitalizes on economies of scale </li></ul><ul><li>Evens out seasonal sales patterns </li></ul>Product Line Depth
  • 19. Adjustments LO 3 Product Modification Product Repositioning Product Line Extension or Contraction Adjustments to Product Items, Lines, and Mixes
  • 20. Types of Product Modifications LO 3 Quality Modification Functional Modification Style Modification
  • 21. Planned Obsolescence LO 3 Planned Obsolescence The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.
  • 22. Repositioning LO 3 Changing Demographics Declining Sales Changes in Social Environment Why reposition established brands?
  • 23. Product Line Extension LO 3 Product Line Extension Adding additional products to an existing product line in order to compete more broadly in the industry.
  • 24. Product Line Contraction LO 3 <ul><li>Some products have low sales or cannibalize sales of other items </li></ul><ul><li>Resources are disproportionately allocated to slow-moving products </li></ul><ul><li>Items have become obsolete because of new product entries </li></ul>Symptoms of Product Line Overextension
  • 25. REVIEW LEARNING OUTCOME Product item , product line , and product mix LO 3
  • 26. Branding Describe marketing uses of branding LO 4
  • 27. Brand LO 4 Brand A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.
  • 28. Branding LO 4 Brand Name Brand Mark Brand Equity That part of a brand that can be spoken, including letters, words, and numbers The elements of a brand that cannot be spoken The value of company and brand names Global Brand A brand where at least one-third of the product is sold outside its home country
  • 29. Benefits of Branding LO 4 Product Identification Repeat Sales New Product Sales
  • 30. Top Ten Global Brands LO 4 SOURCE: Reprinted from the August 6, 2007 issue of ‘BusinessWeek’ by special permission, Copyright 2007 by The McGraw-Hill Companies, Inc.
  • 31. Branding Strategies LO 4 Brand No Brand Manufacturer’s Brand Private Brand Individual Brand Family Brand Combi- nation Individual Brand Family Brand Combi- nation
  • 32. Generic Brand LO 4 A no-frills, no-brand-name, low-cost product that is simply identified by its product category. Generic Product
  • 33. Manufacturers’ Brands Versus Private Brands LO 4 Manufacturers’ Brand Private Brand The brand name of a manufacturer. A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand.
  • 34. Advantages of Manufacturers’ Brands LO 4 <ul><li>Heavy consumer ads by manufacturers </li></ul><ul><li>Attract new customers </li></ul><ul><li>Enhance dealer’s prestige </li></ul><ul><li>Rapid delivery, carry less inventory </li></ul><ul><li>If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer </li></ul>
  • 35. Advantages of Private Brands LO 4 <ul><li>Earn higher profits on own brand </li></ul><ul><li>Less pressure to mark down price </li></ul><ul><li>Manufacturer can become a direct competitor or drop a brand/reseller </li></ul><ul><li>Ties customer to wholesaler or retailer </li></ul><ul><li>Wholesalers and retailers have no control over the intensity of distribution of manufacturers’ brands </li></ul>
  • 36. Individual Brands Versus Family Brands LO 4 Individual Brand Family Brand Using different brand names for different products. Marketing several different products under the same brand name.
  • 37. Cobranding LO 4 Ingredient Branding Cooperative Branding Complementary Branding Types of Cobranding
  • 38. Trademarks LO 4 TM <ul><ul><li>Many parts of a brand and associated symbols qualify for trademark protection. </li></ul></ul><ul><ul><li>Trademark right comes from use rather than registration. </li></ul></ul><ul><ul><li>The mark has to be continuously protected. </li></ul></ul><ul><ul><li>Rights continue for as long as the mark is used. </li></ul></ul><ul><ul><li>Trademark law applies to the online world. </li></ul></ul>A Trademark is the exclusive right to use a brand.
  • 39. REVIEW LEARNING OUTCOME Marketing Uses of Branding LO 4
  • 40. Packaging Describe marketing uses of packaging and labeling LO 5
  • 41. Functions of Packaging LO 5 Contain and Protect Promote Facilitate Storage, Use, and Convenience Facilitate Recycling
  • 42. Labeling LO 5 Persuasive <ul><li>Focuses on promotional theme </li></ul><ul><li>Consumer information is secondary </li></ul>Informational <ul><li>Helps make proper selections </li></ul><ul><li>Lowers cognitive dissonance </li></ul><ul><li>Includes use/care </li></ul>http :// www.fda.gov Online
  • 43. Universal Product Codes LO 5 Universal Product Codes (UPCs) A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products.
  • 44. REVIEW LEARNING OUTCOME Packaging and Labeling LO 5
  • 45. Global Issues in Branding and Packaging Discuss global issues in branding and packaging LO 6
  • 46. Global Issues in Branding LO 6 Adaptations & Modifications Global Options for Branding One Brand Name Everywhere Different Brand Names in Different Markets
  • 47. Global Issues in Packaging LO 6 Aesthetics Global Considerations for Packaging Climate Considerations Labeling
  • 48. REVIEW LEARNING OUTCOME Global Issues in Branding and Packaging LO 6 Branding Choices: 1 name Modify or adapt 1 name Different names in different markets Packaging Considerations: Labeling Aesthetics Climate
  • 49. Product Warranties Describe how and why product warranties are important marketing tools LO 7
  • 50. Product Warranties LO 7 Warranty Express Warranty Implied Warranty A confirmation of the quality or performance of a good or service. A written guarantee. An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)
  • 51. REVIEW LEARNING OUTCOME Product Warranties LO 7 Express warranty = written guarantee Implied warranty = unwritten guarantee
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