IBM

Marketing management

Good marketing initially begins with defining the 4 P’s

Product

Place

Price

Promotion

Chapter 4: product

Powerpoint: chapter 4.1

Powerpoint: chapter 4.2

Powerpoint: chapter 4.3

Powerpoint: chapter 4.4

Chapter 5: place

Powerpoint: chapter 5.1

Powerpoint: chapter 5.2

Chapter 6: price

Chapter 7: promotion

A.What is a product

B. Product categories

C. Product mix

D. Brand decisions

E. Product features

F. Product development

G. Product life cycle

4 classes:

4.1, 4.2, 4.3 and 4.4

4.1

A.

A pack of features

That meet a need

Of a consumer

3 levels:

Core product = basic level Physical features

Cola = water + sugar + ?

Actual product Added features, extras

Augmented product Perception

Product is the sum of:

= your product needs a good concept

One that:

Matches the positioning (USP = a promise!)

Meets the needs of the consumers

Is clearly different ( competition)

If not?

Bloopers!

Matching the positioning and the USP

Meeting the needs of the consumers:

Being different from the competition:

Consequences for marketing

Successful product/concept: Nouky

°1996

Core product: soft toy for babies as of 3 months old

Consumer needs: convenience, safety and health

Different from all competitors (at that time)

Result:

Brand extension (retail, clothing, 3D animation series, comic books, …)

Consequences for marketing

Blooper/unsuccessful: Essensis (Danone)

“Essensis feeds the skin from within”

The bernagie oil fights off skin ageing. Because the oil has a bad taste, a considerableamount of sugar is added.

Which 2 mistakes can you find here?

Productconcepts: fail or succeed

Match the positioning

Meet the needs of the consumers

Be different (or better: be first!)

How to be different from the competition

= avoid a me-too strategy

Often there is little difference in the core product

3 suggestions

Add physical features (core)

Add extras (actual product)

Create an experience (augmented product)

Physical features

Add extras

Create an experience

Describe how you could create added value for Actimel on the 3 levels:

Core product

Actual product

Augmented: eg. Experience, service, delivery, …

Result 2013:

Examples experience (= augmented product):

B.

Convenience goods

Low involvement

Routine, habit

Emergency purchases

Impulsive purchases

Eg. Razor blade

Preference goods

Like convenience goods

But there is a brand preference

Eg. Gillette razor blade

Shopping goods

High involvement

There are risks (financial/social)

Lower purchasing frequency

Specialty goods

Unique products/features

Consumer has a very specificpreference for this product

Shopping with a clearly defined goal

Consumer is willing to travel far toget this

C.

All the products a company has for sale

Assortment / range/portfolio

Often there is a link between the different product groups:

Production

Distribution

Price

Promotion

Consumption pattern

3 ways of looking at assortment:

WIDTH: number of different product lines/product groups

DEPTH: number of all different product types in one productline

LENGTH: number of all different products (total)

Why do we call this ‘deep’? (see picture)

Product mix or assortment => necessary to make important decisions !

Nestlé:

1905: milk and dairy products

Chocolate, candy and coffee

The nineties: water, icecream and animal food

Now: 3 big product lines

Nutrition

Health

Wellness

Other example: Ter Beke

° family business

Nineties: price fluctuations pork meat

Noticed DINKS and families were after convenience: fully prepared meals

Also noticed packaged meat sold better

Actions: product development and takeovers

Results:

2005: turnover of 236 million

2007: turnover increase of 12 %

2008: 393 million, in the middle of the economic crisis

Expanding the assortment:

Develop new products/product groups

Product line extension

Product line stretching

Develop new products/new product groups:

Create new products

With a different brandname

Brand extensions

Benefits:

New opportunities: new target group

Opportunities in the market

Make more profit

Product line extension:

Linefilling

Variety seeking

Fill the ‘gaps’ in the market

Make the assorment more ‘complete’

Increase turnover

Danger: cannibalisation !

Product line stretching:

Trading down:

Reach segment with less purchasing power

Increase turnover

Trading up:

Grow faster

Bigger margins

Make assortment more complete

Transfer of positive image

Change the features of one or more of the products

Not a new product

But adaptations to

Better meet the needs of the consumers

Changes in the market

Be up to date

React proactive or reactive to decrease or stagnation in sales

Create desire

Product adaptations:

Change quality

Change functionality

Change style/design

Which kind of adaptation is this?

Quality

Functionality

style

Erase products

Bad launch

Decline phase of product life cycle

New technology

Criteria

Profit opportunities

20/80 rule

Eg. Oxo Soup, Unilever

Chapter 4.2

As of part D. Brand decisions

Prepare (next class):

Look up articles about the Turner-Duckworth company and their work for the Coca Cola Company and Metallica (logo + the Death Magnetic album)

Find an answer to the following questions

Which elements do you need to ‘brand’ a product or organisation? Look on the D&T and other websites.

What are the basic packaging rules according to Duckworth & Turner?

Have they used these rules when redesigning the Coca Cola bottle and the Metallica logo + the Death Magnetic album? Discuss the changes, the motivationand whether they have followed their own rules.

They have not drastically changed the Metallica & Coca Cola logo/packaging. Why not?

What are the differences in packaging between the USA and Europe according toD&T?