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Lamb, Hair, McDaniel
CHAPTER 10
Product Concepts
2010-2011
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Define the term product
What Is a Product?What Is a Product?
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What Is a Product?
Everything, both favorableand unfavorable, that a
person receives in anexchange.
Tangible Good
Service
Idea
Product
Product
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What Is a Product?
Product is the starting point of Marketing Mix
PromotionPromotion
Place (Distribution)Place (Distribution)
PricePrice
ProductProduct
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Classify consumer products
Type s of Consum e r ProductsType s of Consum e r Products
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Type s of Products
B usinessProduct
Consumer
Product
A product used to manufacture other goods or services, to facilitate an
organizations operations, or to resellto other consumers.
A product bought to satisfy an
individuals personal needs or wants
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Type s of Consum e r Products
U nsoughtProductsU nsoughtProducts
SpecialtyProductsSpecialtyProducts
ShoppingProductsShoppingProducts
ConvenienceProducts
ConvenienceProducts
Consumer Products
Consumer Products
B usinessProductsB usinessProducts
ProductsProducts
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Type s of Consum e r Products
Market
DevelopmentDiversification
Increase market share amongexisting customers
Attract new customers toexisting products
Introduce new productsinto new markets
Create new products for present markets
ConvenienceProduct
ShoppingProduct
SpecialtyProduct
U nsoughtProduct
A relatively inexpensive item thatmerits little shopping effort
A product that requires comparisonshopping, because it is usually moreexpensive and found in fewer stores
A particular item for whichconsumers search extensively and
are reluctant to accept substitutesA product unknown to the potentialbuyer or a known product that thebuyer does not actively seek
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Define the terms product item , product line ,
and product mix
Product It e ms,Product It e ms,Lin e s, and Mix e sLin e s, and Mix e s
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Product It e ms,Lin e s, and Mix e s
Product Item
Product Line
Product Mix
A specific version of a productthat can be designated as adistinct offering among an
organizations products.
A group of closely-relatedproduct items.
All products that anorganization sells.
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Cam pbell sProduct Lin e s and Mix
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B e n e fits of Product Lin e s
Equivalent QualityEquivalent Quality
Efficient Sales andDistributionEfficient Sales andDistribution
StandardizedComponentsStandardizedComponents
Package U niformityPackage U niformity
Advertising EconomiesAdvertising Economies
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A djustm e nts
Product
Modification
Product
Modification
Product
Repositioning
Product
Repositioning
Product LineExtension or Contraction
Product LineExtension or Contraction
Adjustments toProduct Items,
Lines, and Mixes
Adjustments toProduct Items,
Lines, and Mixes
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Type s of Product Modifications
Quality ModificationQuality Modification
Functional ModificationFunctional Modification
Style ModificationStyle Modification
Planned Obsolescence: T he practice of modifying products so those that havealready been sold become obsolete
before they actually need replacement.LO 3
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R ep ositioning
Changing
Demographics
Changing
DemographicsDeclining SalesDeclining Sales
Changes inSocial
Environment
Changes inSocial
Environment
Why repositionWhy repositionestablis h ed brands? establis h ed brands?
Why repositionWhy repositionestablis h ed brands? establis h ed brands?
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Product Lin e Ext e nsion A
dding additional products to an existing productline in order to compete more broadly in theindustry.
S y m p toms of Ov e r e xt e nsionSome products have low sales or cannibalize sales of other items
Resources are disproportionately allocatedto slow-moving productsItems have become obsolete because of new product entries
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Describe marketinguses of branding
B randingB randing
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B randing
B randName
B randMark
B randEquity
That part of a brand that can be spoken,including letters, words, and numbers
The elements of a brand thatcannot be spoken
The value of company and brand names
GlobalB rand
A brand where at least 20 percent of theproduct is sold outside its home country
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B e n e fits of B randing
ProductIdentification
Repeat Sales
New ProductSales
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T o p Te n G lo b a l B rands
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1. Coca-Cola U .S.
2. IB M U .S.
3. Microsoft U .S.
4 . GE U .S.5 . Nokia Finland6 . McDonalds U .S.7 . Google U .S.8 . Toyota Japan9 . Intel U .S.
10. Disney U .S.
Source: Burt Helm, "Best Global Brands,"BusinessWeek September 2 8 , 200 9
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B randing Strat e gi e s
B rand No B rand
ManufacturersB rand Private
B rand
IndividualB rand
FamilyB rand
Combi-nation
IndividualB rand
FamilyB rand
Combi-nation
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B randing Strat e gi e s
ManufacturersB rand
PrivateB rand
The brand name of amanufacturer.
A brand name owned by awholesaler or a retailer. Alsoknown as a private label or
store brand.
Captive
A brand manufactured by a thirdparty for exclusive retailer,without evidence of a thatretailers affiliation
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A dvantag e s of Manufactur e rs B rands
Heavy consumer ads by manufacturers
A ttract new customers
Enhance dealers prestige
Rapid delivery, carry less inventory
If dealer carries poor quality brand,customer may simply switch brands andremain loyal to dealer
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A dvantag e s of Privat e B rands
Earn higher profits on own brand
Less pressure to mark down price
Manufacturer can become a directcompetitor or drop a brand/reseller
Ties customer to wholesaler or retailer
Wholesalers and retailers have no controlover the intensity of distribution of manufacturers brands
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A dvantag e s
of Ca p tiv e B
randsNo evidence of stores affiliationSold exclusively at the chainCan ask price similar tomanufacturers brands
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Individua l B rands V e rsusFami ly B rands
Individual
B rand
Family
B rand
U sing different brand names
for different products.
Marketing several differentproducts under the samebrand name.
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Co b randing
IngredientB randingIngredientB randing
CooperativeB randing
CooperativeB randing
ComplementaryB randing
ComplementaryB randing
T y pes of T y pes of Cobranding Cobranding
http://www.bose.com
OnlineLO 4
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Marketing U ses of Branding
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Describe marketinguses of packaging
and labeling
PackagingPackaging
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Functions of Packaging
Contain and Protect
Promote
Facilitate Storage, U se,and Convenience
Facilitate Recyclinghttp://www.levesquedesign.com/http://www.design4packaging.com
Online
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La bel ing
Online
http://www.fda.gov
Persuasive
Focuses onpromotionaltheme
Consumer information issecondary
Informational
Helps make proper selections
Lowers cognitivedissonance
Includes use/care
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U niv e rsa l Product Cod e s
U niversalProduct Codes
(U PCs)
A series of thick and thin
vertical lines (bar codes),readable by computerizedoptical scanners, thatrepresent numbers used to
track products.
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Describe howand why product
warranties areimportant
marketing tools
Product Warranti e sProduct Warranti e s
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Product Warranti e s
W arranty
ExpressW arranty
ImpliedW arranty
A confirmation of the quality or performance of a good or service.
A written guarantee.
An unwritten guarantee that the good or
service is fit for the purpose for which itwas sold. ( U CC)
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