Copyright 2009 by Cengage Learning Inc. All rights reserved 1 Designed by Eric Brengle B-books, Ltd. CHAPTER 10 Product Concepts Prepared by Amit Shah.

Copyright 2009 by Cengage Learning Inc. All rights reserved 1 Designed by Eric Brengle B-books, Ltd. CHAPTER 10 Product Concepts Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10 Copyright 2009 by Cengage Learning Inc. All rights reserved What Is a Product? 2 LO I Product Everything, both favorable and unfavorable, that a person receives in an exchange. Tangible Good Service Idea Copyright 2009 by Cengage Learning Inc. All rights reserved What Is a Product? 3 LO I Promotion Place (Distribution) PriceProduct Product is the starting point of Marketing Mix Copyright 2009 by Cengage Learning Inc. All rights reserved Types of Products 4 LO 2 Business Product Business Product Consumer Product Consumer Product A product used to manufacture other goods or services, to facilitate an organizations operations, or to resell to other consumers. A product bought to satisfy an individuals personal needs or wants A product bought to satisfy an individuals personal needs or wants Copyright 2009 by Cengage Learning Inc. All rights reserved Types of Consumer Products 5 LO 2 Unsought Products Unsought Products Specialty Products Specialty Products Shopping Products Shopping Products Convenience Products Convenience Products Consumer Products Consumer Products Business Products Business Products Copyright 2009 by Cengage Learning Inc. All rights reserved Types of Consumer Products 6 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 Copyright 2009 by Cengage Learning Inc. All rights reserved Product Items, Lines, and Mixes 7 LO 3 Product Item Product Line Product Mix A specific version of a product that can be designated as a distinct offering among an organizations products. A group of closely-related product items. All products that an organization sells. Copyright 2009 by Cengage Learning Inc. All rights reserved Campbells Product Lines and Mix 8 LO 3 Copyright 2009 by Cengage Learning Inc. All rights reserved Benefits of Product Lines 9 LO 3 Equivalent Quality Efficient Sales and Distribution Standardized Components Standardized Components Package Uniformity Advertising Economies Copyright 2009 by Cengage Learning Inc. All rights reserved Product Mix Width 10 LO 3 Product Mix Width The number of product lines an organization offers. Diversifies risk Capitalizes on established reputations Copyright 2009 by Cengage Learning Inc. All rights reserved Product Line Depth 11 LO 3 Product Line Depth Product Line Depth The number of product items in a product line. Attracts buyers with different preferences Increases sales/profits by further market segmentation Capitalizes on economies of scale Evens out seasonal sales patterns Copyright 2009 by Cengage Learning Inc. All rights reserved Adjustments 12 LO 3 Product Modification Product Repositioning Product Line Extension or Contraction Product Line Extension or Contraction Adjustments to Product Items, Lines, and Mixes Copyright 2009 by Cengage Learning Inc. All rights reserved Types of Product Modifications 13 LO 3 Quality Modification Functional Modification Style Modification Copyright 2009 by Cengage Learning Inc. All rights reserved Planned Obsolescence 14 LO 3 Planned Obsolescence The practice of modifying products so those that have already been sold become obsolete before they actually need replacement. Copyright 2009 by Cengage Learning Inc. All rights reserved Repositioning 15 LO 3 Changing Demographics Declining Sales Changes in Social Environment Why reposition established brands? Copyright 2009 by Cengage Learning Inc. All rights reserved Product Line Extension 16 LO 3 Product Line Extension Adding additional products to an existing product line in order to compete more broadly in the industry. Copyright 2009 by Cengage Learning Inc. All rights reserved Product Line Contraction 17 LO 3 Some products have low sales or cannibalize sales of other items Resources are disproportionately allocated to slow-moving products Items have become obsolete because of new product entries Symptoms of Product Line Overextension Copyright 2009 by Cengage Learning Inc. All rights reserved Brand 18 LO 4 Brand A name, term, symbol, design, or combination thereof that identifies a sellers products and differentiates them from competitors products. Copyright 2009 by Cengage Learning Inc. All rights reserved Branding 19 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 Copyright 2009 by Cengage Learning Inc. All rights reserved Benefits of Branding 20 LO 4 Product Identification Repeat Sales New Product Sales Copyright 2009 by Cengage Learning Inc. All rights reserved Generic Brand 21 LO 4 Generic Product Generic Product A no-frills, no-brand-name, low-cost product that is simply identified by its product category. Copyright 2009 by Cengage Learning Inc. All rights reserved Manufacturers Brands Versus Private Brands 22 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. Copyright 2009 by Cengage Learning Inc. All rights reserved Advantages of Manufacturers Brands 23 LO 4 Heavy consumer ads by manufacturers Attract new customers Enhance dealers prestige Rapid delivery, carry less inventory If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer Copyright 2009 by Cengage Learning Inc. All rights reserved Advantages of Private Brands 24 LO 4 Earn higher profits on own brand Less pressure to mark down price Manufacturer can become a direct competitor or drop a brand/reseller Ties customer to wholesaler or retailer Wholesalers and retailers have no control over the intensity of distribution of manufacturers brands Copyright 2009 by Cengage Learning Inc. All rights reserved Cobranding 25 LO 4 Ingredient Branding Cooperative Branding Complementary Branding Types of Cobranding Copyright 2009 by Cengage Learning Inc. All rights reserved Trademarks 26 LO 4 Many parts of a brand and associated symbols qualify for trademark protection. Trademark right comes from use rather than registration. The mark has to be continuously protected. Rights continue for as long as the mark is used. Trademark law applies to the online world. A Trademark is the exclusive right to use a brand. Copyright 2009 by Cengage Learning Inc. All rights reserved Functions of Packaging 27 LO 5 Contain and Protect Promote Facilitate Storage, Use, and Convenience Facilitate Recycling Copyright 2009 by Cengage Learning Inc. All rights reserved Labeling 28 LO 5 Persuasive Focuses on promotional theme Consumer information is secondary Informational Helps make proper selections Lowers cognitive dissonance Includes use/care http ://www.fda.gov Online Copyright 2009 by Cengage Learning Inc. All rights reserved Universal Product Codes 29 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.