product types 1mm

7/30/2019 Product Types 1mm

1/28

PRODUCT MANAGEMENT

Core product - Principal benefit offered

- , , ,

brand name, quality

Augmented product - Delivery, credit, warranty,service, installation


2/28

Types of Consumer Goods

Convenience - frequently purchased, minimumeffort, low priced

Staples - bread, gasoline, milkImpulse - chewing gum, snacks, soft drinks

-

,

Shopping - Purchased after comparison shopping

Clothing, furniture, appliances, shoes

Speciality - Unique characteristics, buyer makesspecial effort

Porsche cars, Carter watches

Unsought goods - Insurance, cemetery plots


3/28

Types of Industrial Goods

Supplies -

Maintenance - brooms, bulbsRepair - nuts, nails, screws

O eratin - oil electricit as

Raw Materials - Steel, chemicals corn (Kelloggs)

Components - Crankshafts, wheels

Accessory Equipment - Typewriters, computers,handtools


4/28

Types of products

Durable goods Nondurables


5/28

PRODUCT LIFE CYCLE (PLC)Theory applies toproducts, not brands.

4 Stages: Introduction, growth, maturity, & declineIntroduction: e.g., Caller ID service

- slow sales rowth

- near zero profits

- heavy expenses in educating the customer

Price High: If volumes are small, production costs

high, R&D costs high, high tech.

Price Low: Low tech product, no patent protection,

high volumes.


6/28

Growth: e.g., mobile phones- Rapid growth in acceptance

New product features - expand market

- Increase in sales and profits

Increase distribution

Improve quality


7/28

Maturity:

- Sales growth slows down

Differentiate your product

- Increase in competition/decrease in profits

Modify market, product, mix- Exit of weak companies

Decline: e.g., oatmeal, video arcade games

- a es a ng o qu c y an pro s ec neSell off business

- Exit from market

Reduce product line. Drop markets, segments,channels. Reposition.

Some studies show PLC applies to brands, fashions,and fads. Similar to BCG analysis in some aspects.


8/28

PRODUCT QUALITY

What is quality?

- Consists of attributes and superiority on these

attributes.

AND

- Also the ability to perform as specified (i.e.,it

depends on perception of the customer).


9/28

How to communicate quality:

- signs and product cues (fine coats - lining)

- price

- packaging, distribution, advertising,promotion.

- association with manufacturer IBM with

countries (Japanese automobiles, Italianclothing).

Does higher quality lead to higher profitability?

Strategic Planning Institute found a significant

positive relationship.


10/28

Product features:

Can be standard or extras

Cars

Cameras

What features to add?

Balance customer value to cost.


11/28


12/28

Product line length, width, and depth

WIDTHDetergent Toothpaste Soaps Diapers

L Bold Gleem Ivory PampersE Cheer Crest Zest Luvs

G Oxydol Camay

T

H


13/28

Branding:

Know what is meant by:

brand

brand name

brand mark

trademark

copyright


14/28

To brand or not?

Generics: 30-50% cheaper- threat to established brands

- sell better where perceived quality difference is

less.

How did companies react?

- increase quality, segment markets (e.g., RalstonPurina)

- introduce cheaper line (e.g., P&G Banner line

of paper products)- cut prices

- open special shops (Ralph Lauren, Benneton)

- demonstrate superiority (Kraft taste tests)


15/28

Advantages of branding:

- Easy to process orders and track problems

- Legal protection

- Attract loyal and profitable set of cusotmers

- Hel s in se mentation

- Distribution leverage

- Signal of quality

- Leads to innovation through generatingcompetition

- Premium price


16/28

Types of brands:

Manufacturers brands:

Campbell, Heinz, Kellogg, Goodyear

Private brands:

Sears, J.C. Penney

Licensed Brands: Christian Dior, Pierre Cardin, Coca Cola clothing

Battle of the Brands: between manufacturer

and middleman


17/28

Categories of branding:

Individual brand names (e.g., Tide, Cheer, Camay, Folgers)Adv: Does not tie companys reputation to one brand.

Disadv: Dilute your companys resources such as

advertising. No brand may be dominate. Blanket family name: (e.g., Heinz, Campbell)

Adv: Costs less to introduce new products, no

name research required.

Separate family brand names for each product.

e.g., Diehard, Craftsman, Kenmore

Combination of 1 and 2.

e.g., Kelloggs Raisin Bran


18/28

Brand Strategy decisions

Line extensions Brand extensions

New brands

Co-brands


19/28

Desirable qualities for brand name:

- could convey product benefits:Coldspot, Coppertone, Craftsman

- could convey product qualities such as action

or colorSunkist, Firebird

- ,7-Up, Puffs

- distinctive

Kodak, Exxon- translate easily

Enco - Standard Oil

- pronunciation problems - EZ


20/28

Tests done before deciding on a name

Association tests: what images come to mind?

Learning tests: how easily is the name

pronounced?

Memory tests: how well remembered?

Preference tests: which one preferred?


21/28

Name lab and interbrand: top consulting firms

(Acura, Compaq)

Good brand becomes associated with the

product category eg:

Problem: can be made common names eg:


22/28

BRAND EQUITY: It is the added value that a

brand endows a product (that something extra).

How do you measure that value?

It depends upon which perspective one is considering.

1. Firm ers ective -

Brand equity is the incremental cash flow from theassociation of the brand with the product.

Sources: Increased market share

Premium pricing

Reduced promotional expenses


23/28

*Brand equity also imparts a differential advantage

over competitors from a loyal customer base.

Sources: Platform for new products and extensions

Momentum to carry through difficult

periods

Resistance from competitive attack

2. Trade perspective -

*Brand equity gives brand leverage over otherproducts in a category.

Sources: Easier acceptance and wider distribution

Ability to negotiate better terms

Protection against private labels


24/28

3. Customer perspective -

*Brand equity is the increase in attitude strength acustomer has for a product using the brand.

How do you get brand equity?

Build: begin with a quality productdevelop accessible attitudes

Borrow: line extensions (different favor, form,

application)

category extension (same core benefit,

usage situation, customer base)


25/28

Brand Extensions:

Adv: Instant recognition

Low ad costs e.g., Honda lawn mower

Disadv: can fail and hurt original name

. ., ,

may be inappropriate and may diluteimage

Buy: License

Acquire


26/28

BRAND LOYALTY: Attitude + repeatpurchase

Three levels of loyalty:

- Brand recognition

- Brand preference- Brand insistence

Wh multibrand:

- Combined sales higher- Get greater shelf space

- Helps brand switchers

- Motivates organization

- Can target different segments

Problems: small shares for each, none may beprofitable


27/28

Packaging:

primary secondary

Earlier function- to contain and protect product.

Other functions -

- as a sales tool (attract, inform, persuade)- instant recognition

- convenience


28/28

Labelling:

Functions - identify, grade, describe, promote

Fair Packaging and Labeling Act 1966

Unit pricing

O en datin

Nutrition labeling

Other social issues:

Excessive cost Scarce resources

Pollution

product types 1mm

Documents