Marketing Management, chapter 12 Setting Product Strategy Prepared by: Volkan ÜLKE Prof. : Teoman DUMAN.

Marketing Management, chapter 12

Setting Product Strategy

Prepared by: Volkan ÜLKEProf. : Teoman DUMAN

What is a Product?

A product is anything that can be offered to a market to satisfy a want or need, including

physical goods, services, experiences, events, persons, places, properties, organizations,

information, and ideas.

Figure 12.1 Components of the Market Offering

Attractiveness of the market

offering

Value-based prices

Product features and quality

Services mix and quality

Figure 12.2 Five Product Levels

Product Classification Schemes

Durability

Use

Tangibility

Durability and Tangibility

Nondurable

goods

ServicesDurable

goods

Consumer Goods Classification

Convenience

Unsought

Shopping

Specialty

Industrial Goods Classification

• Materials and parts• Capital items• Supplies/business services

Product Differentiation

• Product form• Features• Customization• Performance• Conformance• Durability• Reliability• Repairability• Style

Service Differentiation

• Ordering ease• Delivery• Installation• Customer training• Customer consulting• Maintenance and

repair• Returns

Design Differentiation

Maintenance and Repair

The Product Hierarchy

Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall

12-13

Need family

Product family

Product class

Product line

Product type

Item

Product Systems and Mixes

• Product system• Product mix• Product assortment• Depth• Length• Width• Consistency

Product-Mix Width and Product-Line Length for Proctor& Gamble Products

PRODUCT-LINE LENGTH

Product-Mix Width

Detergents ToothpasteDisposable Bar Soap Diapers

Paper Tissue

Ivory Snow (1930)

Dreft (1933)

Tide (1946)

Cheer (1950)

Gleem (1952)

Crest (1955)

Ivory (1879)

Kirk’s (1885)

Lava (1893)

Camay (1926)

Pampers (1961)

Luvs (1976)

Charmin (1928)

Puffs (1960)

Banner (1982)

Summit (1992)

Product Line Analysis

• Core product• Staples• Specialties• Convenience items

Line Stretching

Down-Market StretchDown-Market Stretch

Up-Market StretchUp-Market Stretch

Two-Way StretchTwo-Way Stretch

Two-Way Product-Line Stretch: Marriott Hotels

QualityEconomy SuperiorStandard Good

Pri

ceP

rice

High

Aboveaverage

Average

Low Fairfield Inn(Vacationers)

Courtyard(Salespeople)

Marriott(Middle

managers)

MarriottMarquis

(Topexecutives)

Product Line Pricing

Product-Mix Pricing

• Product-line pricing• Optional-feature pricing• Captive-product pricing• Two-part pricing• By-product pricing• Product-bundling pricing

What is the Fifth P?

Packaging, sometimes called the fifth P, is all the activities of designing and

producing the container for a product.

Factors Contributing to the Emphasis on Packaging

Self-serviceSelf-service

Consumer affluenceConsumer affluence

Company/brand imageCompany/brand image

Innovation opportunityInnovation opportunity

Packaging Objectives

• Identify the brand• Convey descriptive and persuasive information• Facilitate product transportation and

protection• Assist at-home storage• Aid product consumption

Functions of Labels

Identifies

Grades

Describes

Promotes

Warranties and Guarantees