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?