Slide 1

by Suwattana SawatasukProduct Concept

What is a product?Product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need

Service: any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything

Classification of ProductsProductsConsumer productsBusiness (Industrial) productsConvenience productsShopping productsSpecialty productsUnsought productsA product bought by individuals and organizations for further processing or for use in conducting a businessA product bought by final consumer for personal consumptionType of Consumer ProductsConvenience product: a product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort Shopping product: a product that customers, in process of selection and purchase, usually compares on such bases as suitability, quality, price, and styleSpecialty product: a product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort Unsought product: a product unknown to the potential buyer, or a known product that the buyer does not actively seek

Marketing ConsiderationTypes of Consumer ProductConvenienceShoppingSpecialtyUnsoughtCustomer buying behaviorFrequent purchase, little planning, little comparison or shop effort, low customer involvementLess frequent purchase, much planning and shopping effort, comparison of brands on price, quality, styleStrong brand preference and loyalty, special purchase effort, little comparison of brandsLittle product awareness, knowledgePriceLow priceHigher priceHigh priceVariesDistributionWidespread distribution, convenient locationSelective distribution in fewer outletsExclusive distribution in only one or a few outlets per market areaVariesPromotionMass promotion by the producerAdvertising & personal selling by both producer & resellersMore carefully targeted promotion by both producer and resellers Aggressive advertising and personal selling by producer and resellersExamplesToothpaste, magazines, laundry detergentMajor appliances, TVs, furniture, clothingLuxury goods, such as Rolex watches or fine crystalLife insurance, Red Cross blood donationsProduct and Service DecisionsProduct attributesBrandingPackagingLabelingProduct support services12345Product and Service Decisions (cont)Product & Service AttributesProduct quality: the characteristics of a product/service that bear on its ability to satisfy stated or implied customer needsProduct features: a competitive tool for differentiating the companys product from competitors products, being the first producer of new feature is one of the most effective way to competeProduct style and design: Design is a larger concept than style, it goes to the very heart of a product. Good design contributes to a products usefulness as well as its look. Style simply describes the appearance of a product. Good style might grab attention, but it doesnt necessarily make the product perform betterProduct designers should think more on how customer will use and benefit from the product

Product and Service DecisionsProduct attributesBrandingPackagingLabelingProduct support services2Product and Service Decisions (cont)BrandingBrand is a name, term, sign, symbol, design, or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitorsBrand name: that part of a brand can be spoken, including letters, words, and numbersBrand mark: the elements of a brand that cannot be spokenBrand equity: the value (awareness, perceived quality, and brand loyalty) of company and brand namesGlobal brand: a brand where at least one-third of the product is sold outside its home country or region

Benefits of BrandingCustomer view brand as an important part of product and branding can add value to a productBranding help buyers identify products that might benefit themBrand also say something about product quality and consistencyBrand name becomes the basis on which the whole story can be built about a products special qualities Brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitorsBranding helps the seller to segment markets i.e. Toyota Motor Corp. can offer the major Lexus, Toyota, and Scion brands, each with numerous sub-brandssuch as Camry, Prius, Matrix, Yaris, Tundra, Land Cruiser, and othersnot just 1 general product for all consumers

Characteristics of Good Brand NameThe name should readily come of the minds of customers. It should be easy to pronounce. The name should be easy to read and understand. The name should be appropriate for the product. It should be easy to remember. It should, as far as possible, be most descriptive in nature.

http://www.freemba.in/articlesread.php?artcode=2264&substcode=95&stcode=1

Desirable Qualities for a Brand NameIt should suggest something about the products benefits and qualities: Beautyrest (mattresses), DieHard (batteries)It should be easy to pronouce, recognize, and remember: iPod Touch, and easyJetThe brand name should be distinctive: Lexus, VirginIt should be extendable: Amazon.com began as an online bookseller but chose a name that would allow expansion into other categoriesThe name should translate easily into foreign languagesIt should be capable of registration and legal protectionTop Ten Global BrandsCoca-Cola

Microsoft

IBM

GE

Nokia

Toyota

Intel

McDonalds

Disney

Mercedes-Benz

Source: the August 6, 2007 issue of Business WeekBuilding Strong BrandsBrand PositioningAttributesBenefitsBeliefs and ValuesBrand Name SelectionSelectionProtectionBrand SponsorshipManufacturers brandPrivate brandLicensingCo-brandingBrand DevelopmentLine extensionsBrand extensionsMultibrandsNew brandsMarketers need to position their brands clearly in target customers mind and should establish a mission for the brand and vision of what the brand must be and doBuilding Strong Brands (cont)Brand PositioningAttributesBenefitsBeliefs and ValuesBrand Name SelectionSelectionProtectionBrand SponsorshipManufacturers brandPrivate brandLicensingCo-brandingBrand DevelopmentLine extensionsBrand extensionsMultibrandsNew brandsTo select brand name, marketers need to review carefully on the product & benefits, target market, and proposed marketing strategies. Then also need to protect the brand by present it with the registered trademark symbolBuilding Strong Brands (cont)Brand PositioningAttributesBenefitsBeliefs and ValuesBrand Name SelectionSelectionProtectionBrand SponsorshipManufacturers brandPrivate brandLicensingCo-brandingBrand DevelopmentLine extensionsBrand extensionsMultibrandsNew brandsManufacturers brand (National): Sony, KellogsPrivate brand (Store or distributor): resellers create the brand themselvesLicensing: some firm license name or symbols previously created by other manufacturers i.e. cartoon charactersCo-branding: 2 firms join forces and co-brand a product i.e. financial services firms often partner with other companies to create co-branded credit cardsBuilding Strong Brands (cont)Brand PositioningAttributesBenefitsBeliefs and ValuesBrand Name SelectionSelectionProtectionBrand SponsorshipManufacturers brandPrivate brandLicensingCo-brandingBrand DevelopmentLine extensionsBrand extensionsMultibrandsNew brandsExistingNewExistingLine extensionBrand extensionNewMultibrandsNew brandProduct CategoryBrand NameBrand Development StrategiesLine extension: extending and existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product categoryBrand extension: extending brand name to new product categoriesMultibrand: introducing additional brands in the same category of companyNew brand: creating new brand nameExistingNewExistingLine extensionBrand extensionNewMultibrandsNew brandProduct CategoryBrand NameProduct and Service DecisionsProduct attributesBrandingPackagingLabelingProduct support services3

Product and Service Decisions (cont)PackagingPackaging: the activities of designing and producing the container or wrapper for a product

Levels of PackagingPrimary package: the package that wrap or contain the actual product

Secondary package: the package that wrap the primary package to attract the customers eyes or for convenience in the display location i.e. shelf

Shipping package: the package that create for convenience in product distribution or shipping

Product and Service DecisionsProduct attributesBrandingPackagingLabelingProduct support services4Product and Service Decisions (cont)LabelingLabel identifies the product or brand.Label might also describe several things about the product e.g. who made it, where it was made, when it was made, its contents, how it is to be used, and how to use it safelyLabel might help to promote the brand, support its positioning, and connect with customersSamples of Labels

Nutritional labelPrice unit

Shelf life2 forms of labelingPersuasive labelingA type of package labeling that focuses on a promotional theme or logo with consumer information being secondary

Information labelingA type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after purchase. The product information might include durability, color, features, cleanability, care instructions, construction standard, nutrition, features, and etc. Universal Product Codes (UPC)A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products on customer purchases records, inventories control, or sales.

Product and Service DecisionsProduct attributesBrandingPackagingLabelingProduct support services5Product and Service Decisions (cont)Product Support ServicesCustomer service is another element of product strategy.For example, Hewlett-Packard (HP) offers a complete set of sales and after-sale services. It promises HP Total Care, the expert help for every stage of your computers life from choosing it all the way to recycling it

Product warrantiesA warranty protects the buyer and gives essential information about the product. It confirms the quality or performance of a good or service.Product Line DecisionsProduct line: a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

Major product line decision:Product line length: the number of items in the product lineProduct line expansion:Line filling: adding more item within the present range of line to reach extra profits, satisfy dealers, being the leading full-line companyLine stretching: firm extends the product line beyond its current range downward or upward to plug a market hole or to acquire the faster growth

Line StretchingHonda stretched downward by adding Honda Fit to its line to serve consumer demand in new-generation minicar segment

Many Japanese auto companies stretched upward in order to add prestige to their current products by introducing an upmarket automobile many years ago

Product Mix DecisionsProduct mix (or product portfolio): the set of all product lines and items that a particular seller offers for saleExample: Sonys diverse portfolio consists of 4 primary product businesses worldwide Sony Electronics (cameras, camcorders, computers, TV, home entertainment products, mobile electronics)Sony Computer Entertainment (games)Sony Picture Entertainment (movies, TV shows, music, DVDs)Sony Financial Services (life insurance, banking, and other offerings) For each business consists of several product lines

Dimensions of Product MixWidth: the number of different product lines the company carriesLength: the total number of items(brands) the company carries within its product linesDepth: the number of versions offered of each product in the line (or product items SKU: Stock Keeping Unit)Consistency: how closely related the various product lines are in end use, production requirements, distribution channels, or some other ways.Thai Ha Public Company LimitedRiceBeanVermicelliVinegarOil1.Kaset-Jasmine AAA 5 kg.-Jasmine AA 5 kg.-Jasmine A5 kg.-Soa-Hai 5 kg.-Toong Kula Jasmine 5 kg.-Brown 5 kg.-Brown 1 kg.-Oryza Sativa 5 kg.

2.Smart Chef-Surin 5 kg.1.Kaset-Green bean400g.- Half green bean 400g.-Red bean 400g.-Royal red bean 400g.-Black bean 400 g.-Soy bean 400g.-Black sesame 250g.-Black sesame 450g.-White sesame 250g.-White sesame 450g.1.Kaset-Green 40 g.-Blue 40 g.-Green 80 g.-Blue 80 g.-Green 200 g.-Blue 200 g.-Green 500 g.-Blue 500 g.

2. Smart Chef-40 g.-80 g.1.Kaset-300 cc.-700 cc.1.Ar-Ngoon-13.75 liters-18.26 liters

2. Cheer-13.75 liters-18 liters

Length = 2Depth = 9Length = 1Depth = 10Length = 2Depth = 10Length = 1Depth = 2Length = 2Depth = 4Product Mix Width (breadth) = 5Product Length = 8