MARKETING MANAGEMENT 14 th edition 12 Setting Product Strategy KotlerKeller.

MARKETING MANAGEMENT14th edition

12 Setting Product

Strategy

Kotler Keller

CHP: 9&12&13&20-2

At the heart of a great brand is a great product

CHP: 9&12&13&20-3

Product

Anything that can be offered to a market to satisfy a want or need.

CHP: 9&12&13&20-4

BrandName

QualityLevel

Packaging

Design

Features

Delivery& Credit

Installation

Warranty

After-Sale

Service

CoreBenefit orService

CoreBenefit orService

Actual ProductActual Product Core ProductCore Product

Augmented ProductAugmented Product

Levels of Product

CHP: 9&12&13&20-5

Product Classification Schemes

Durability

Use

Tangibility

CHP: 9&12&13&20-6

Durability and Tangibility

Nondurable

goods

ServicesDurable

goods

CHP: 9&12&13&20-7

Unsought ProductsUnsought Products

New innovations Products consumers don’t want to think about these products Require much advertising &personal selling i.e Life insurance, blood donation

Product ClassificationsConsumer Products

Specialty ProductsSpecialty Products

Special purchase efforts High price Unique characteristics Brand identification Few purchase locations i.e can be anything

Shopping ProductsShopping Products

Buy less frequently Higher price Fewer purchase locations Comparison shop i.e Clothing, appliances

Convenience ProductsConvenience Products

Buy frequently & immediately Low priced Mass advertising Many purchase locations i.e Candy, newspapers

CHP: 9&12&13&20-8

Industrial Goods Classification

Materials and parts

Supplies/

business servicesCapital items

CHP: 9&12&13&20-9

Product Differentiation

• Product form• Features• Performance• Conformance• Durability• Reliability• Reparability

• Style• Design• Ordering ease• Delivery• Installation• Customer training• Customer consulting• Maintenance

CHP: 9&12&13&20-10

The Product Hierarchy

Need family

Product family

Product class

Product line

Product type

Item

CHP: 9&12&13&20-11

The Product Hierarchy

• Product line – A group of products

that are closely related because they may: • function in a similar

manner• be sold to the same

customer groups, • be marketed through the

same types of outlets • fall within given price

ranges

• Product line length

– Line stretching: adding products that are higher or lower priced than the existing line

– Line filling: adding more items within the present price range

CHP: 9&12&13&20-12

The Product Hierarchy

• Product mix– Also known as

product assortment– Consists of all the

product lines and items that a particular seller offers for sale

• Product mix width:– Number of different

product lines carried by company

• Product line/mix depth:– Number of different

versions of each product in the line

• Product mix consistency

CHP: 9&12&13&20-13

Line Stretching

Down-Market StretchDown-Market Stretch

Up-Market StretchUp-Market Stretch

Two-Way StretchTwo-Way Stretch

CHP: 9&12&13&20-14

Line Filling

CHP: 9&12&13&20-15

Packaging: The 5th P

All the activities of designing and producingthe container for a product.

CHP: 9&12&13&20-16

Packaging has been influenced by…

Self-serviceSelf-service

Consumer affluenceConsumer affluence

Company/brand imageCompany/brand image

Innovation opportunityInnovation opportunity

CHP: 9&12&13&20-17

Innovations in Packaging

CHP: 9&12&13&20-18

Functions of Labels

Identifies

Grades

Describes

Promotes

MARKETING MANAGEMENT14th edition

13 Designing and

ManagingServices

Kotler Keller

CHP: 9&12&13&20-20

Service

Any act of performance that oneparty can offer another that is

essentially intangible and does notresult in the ownership of anything;

its production may or may notbe tied to a physical product.

CHP: 9&12&13&20-21

Service Sectors

GovernmentPrivate

nonprofit

Manufacturing

Business Retail

CHP: 9&12&13&20-22

Categories of Service Mix

Pure tangible goodPure tangible good

Good w/ accompanying servicesGood w/ accompanying services

HybridHybrid

Service w/ accompanying goodsService w/ accompanying goods

Pure servicePure service

CHP: 9&12&13&20-23

Continuum of Evaluation for Different Types of Products

CHP: 9&12&13&20-24

IntangibilityIntangibility

InseparabilityInseparability

VariabilityVariability

PerishabilityPerishability

Can’t be seen, tasted, felt, heard, or smelled before purchase.

Can’t be separated from service providers.

Quality depends on who provides them and when, where and how.

Can’t be stored for later sale or use.

Nature and Characteristic of a Service

CHP: 9&12&13&20-25

Physical Evidence and Presentation

Place

People

Equipment

Communication material

Symbols

Price

CHP: 9&12&13&20-26

How to Increase Quality Control

Invest in good hiring and training procedures

Monitor customer satisfaction

Standardize the service-performance process

CHP: 9&12&13&20-27

Matching Demand and Supply

Demand side• Differential pricing• Nonpeak demand• Complementary

services• Reservation

systems

Supply side• Part-time employees• Peak-time efficiency• Increased consumer

participation• Shared services• Facilities for future

expansion

CHP: 9&12&13&20-28

Service-Quality Model

CHP: 9&12&13&20-29

Determinants of Service Quality

Reliability

Responsiveness

Assurance

Empathy

Tangibles

MARKETING MANAGEMENT14th edition

9 Creating

Brand Equity

Kotler Keller

CHP: 9&12&13&20-31

Brand

A name, term, sign, symbolor design, or a combination of them,

intended to identify the goodsor services of one seller or group

of sellers and to differentiatethem from those of competitors.

CHP: 9&12&13&20-32

The Role of Brands

Identify the makerIdentify the maker

Simplify product handlingSimplify product handling

Organize accountingOrganize accounting

Offer legal protectionOffer legal protection

CHP: 9&12&13&20-33

The Role of Brands

Signify qualitySignify quality

Create barriers to entryCreate barriers to entry

Serve as a competitive advantage

Serve as a competitive advantage

Secure price premiumSecure price premium

CHP: 9&12&13&20-34

Marketing Advantages of Strong Brands

• Improved perceptions of product performance

• Greater loyalty• Less vulnerable to

competition• Less vulnerable to crises• Larger margins• Inelastic consumer

response to price increases

• Elastic consumer response to price decreases

• Greater trade cooperation

• Increase in effectiveness of IMC

• Licensing opportunities

• Brand extension opportunities

CHP: 9&12&13&20-35

Brand Promise

The marketer’s vision of whatthe brand must be and do for

Consumers.

CHP: 9&12&13&20-36

Brand Elements

ElementsSlogans

Brand

names URLs

Logos

SymbolsCharacters

CHP: 9&12&13&20-37

Brand Elements

CHP: 9&12&13&20-38

Brand Elements

Companies often create product icons to develop an identity for their products. Many made-up creatures and personalities, such as Çelik (and now Çeliknaz), Sütaş İnek and Yumoş Ayı, are widely recognized figures in popular culture.

CHP: 9&12&13&20-39

Brand Element Choice Criteria

• Memorable

• Meaningful

• Likeability

• Transferable

• Adaptable

• Protectible

CHP: 9&12&13&20-40

Slogans

• Like a good neighbor, State Farm is there

• Just do it• Nothing runs like a

Deere• Help is just around the

corner• Save 15% or more in

15 minutes or less

• We try harder• We’ll pick you up• Nextel – Done• Zoom Zoom• I’m lovin’ it• Innovation at work• This Bud’s for you• Always low prices

CHP: 9&12&13&20-41

Slogans

• Adını unutabilirsiniz, tadını asla!

• “Hayaaaatın tadıııı!”• Farkı, fiyatı!• Yok aslında birbirimizden

farkımız, ama biz Osmanlı Bankası’yız.

• Ne biçim lastik buuu?• Honda, hayat onda.• Çakar çakmaz çakan

çakmak.• Bira bu kapağın altındadır.

• Citroen gelir, hayat değişir.

• Türkiye’nin motosikleti.• Erkek sünnet olur, askerlik

yapar, Permatik kullanır!• Philips hayatımızı

kolaylaştıracak.• Kirlenmek güzeldir.• Tefal, ne varsa sende var.• Arçelik demek yenilik

demek.• Kalebodur, seramik budur.

CHP: 9&12&13&20-42

Brand Equity

The differential effect that brandknowledge has on consumer

response to the marketing of that brand.

The 10 Most Valuable Brands(Source: Millward Brown)

Brand 2011 Brand Value (Billions)

Apple $153

Google $115

IBM $101

McDonalds $78

CocaCola

AT&T

Marlboro

$74

$70

$68

China Mobile $57

GE $50

ICBC $44

CHP: 9&12&13&20-44

Line ExtensionArçelik New Refrigerators

MultibrandsArçelik - Beko

Brand ExtensionArçelik TV-A/C

New BrandsOYAK - TukaşB

rand

Nam

e

Existing New

Product Category

Existing

New

Four Brand Strategies

MARKETING MANAGEMENT14th edition

20 Introducing New Market Offerings

Kotler Keller

CHP: 9&12&13&20-46

Categories of New Products

New-to-the-world

Cost reductions

New product lines

Additions

Improvements

Repositionings

CHP: 9&12&13&20-47

The New Product-Development Decision Process

CHP: 9&12&13&20-48

Consumer-Adoption Process

Adoption is an individual’s decision

to become a regular user

of a product.

CHP: 9&12&13&20-49

Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption

CHP: 9&12&13&20-50

Adopter Categorization

CHP: 9&12&13&20-51

Characteristics of an Innovation

• Relative advantage

• Compatibility

• Complexity

• Divisibility

• Communicability