PRODUCT

STRATEGY
! Alex Gonzaga Statistics
! Fr. Floriano Roa Ethics
! Willington Onuh Econ
! Zeny Lontoc ITPM/PM
! Epifania Anfone PTM

COMPONENTS OF MARKET
OFFERING
WHAT IS A PRODUCT?
! anything that can be oered to a market to
satisfy a want or need.
! People buy want satisfaction, not objects.
! Physical goods
! Services
! Experiences
! Events
! Persons
! Places
! Properties
! Organizations
! Information
! Ideas
COMPONENTS OF MARKET
OFFERING
service or benet that
customer really buys


Core benet turned to
actual product



Attributes and
conditions that is
expected when product
is purchased
Exceeding expectations
Possible augmentation
and transformation
PRODUCT CHARACTERISTICS
AND CLASSIFICATION?
! Products traditionally classied:
! Durability
! Tangibility &
! Use (consumer or industrial)
! Each product type - own marketing-mix
strategy
PRODUCT CHARACTERISTICS
AND CLASIFICATION?
DURABILITY & TANGIBILITY
1. Non-durable goods - tangible goods -one/few
uses eg: beer & soap
2. Durable goods - tangible goods - many uses
eg: refrigerators
3. Services - intangible, inseparable, variable &
perishable products
PRODUCT CLASIFICATION
! As to who uses the product
Consumer Products
Product destined for use by
ultimate consumers.
Business Products
Product that contri butes
directly or indirectly to the
output of other products for
resale; also called industrial or
organizational product.
Some products fall into both categories.
CONSUMER PRODUCT
CLASIFICATION
! Buyers perception of a need for the product
Unsought Products
! Marketed to consumers who may not yet recognize
any need for them
! Most consumers recognize their own needs for
various types of consumer purchases and actively
seek them
CONSUMER PRODUCT
CLASIFICATION
! Based on buying behavior
Convenience Products
! goods and services that consumers want to purchase frequently,
immediately, and with minimal eort
Impulse
purchased on the
spur of the moment,
Staples
bought constantly to
replenish and
maintain a ready
inventory, with many
competitors oering
these products
Emergency
bought constantly to
replenish and
maintain a ready
inventory, with many
competitors oering
these products
CONSUMER PRODUCT
CLASIFICATION
Shopping Products
! purchased only after the consumer compares
competing oerings on characteristics
! generally more expensive
! purchaser lacks complete information and gathers it
! carry warranties and after-sale service terms
! stores name and reputation
! Personal selling eorts augment promotion
SHOPPING
PRODUCTS
Homogenous
one brand often seems much
like another

dierentiate homogeneous
products from competing
products in terms price and
value, quality, appeal, or
uniqueness
Heterogenous
Basic dierences seem to
stand out

Perceptions of style, color, and
t can all aect consumer
choices
CONSUMER PRODUCT
CLASIFICATION
Specialty Products
! oer unique characteristics that cause buyers to prize those
particular brands
! carry high prices and many represent well-known brands
! They know what they want and they are willing to pay for it
! Buyers begin shopping with complete information and
refuse to accept substitutes
! Some specialty products are sold for less through a rms
company-owned discount outlets or in designated
discount areas of their retail stores
CONSUMER PRODUCT
CLASSIFICATION SYSTEM
BUSINESS PRODUCT
CLASIFICATION
Materials and Parts
! Goods that enter the manufacturers product
completely
! Raw materials - farm & natural products
! Manufactured materials & parts
! Component materials - further fabricated
! Component parts - no change in form
BUSINESS PRODUCT
CLASIFICATION
Capital Items
! Long lasting good that facilitate in developing
and managing nished products
! Installations - Buildings & heavy equipment
! Equi pment por tabl e f actor y, oce
equipment/tools
BUSINESS PRODUCT
CLASIFICATION
Supplies and Business Services
! short-term goods and services that facilitate in developing
and managing nished products
! Supplies
! Maintenance & repair items
! Operating supplies
! Business services
! Maintenance & repair services
! Business advisory services
BUSINESS PRODUCT
CLASSIFICATION SYSTEM
DIFFERENTIATION
! To be branded, products must be
dierentiated
! FORM: size, shape or physical structure
DIFFERENTIATION
! FEATURES: supplement basic function
! CUSTOMIZATION
! PERFORMANCE QUALITY: level at
which the products characteristics operate
! CONFORMANCE QUALITY: Degree
uni t s i dent i cal , meet pr omi sed
specication
DIFFERENTIATION
! DURABILITY: Products expected operating
life
! Customers willing to pay more
! Must not be subject to rapid obsolescence
! RELIABILITY: Probability product will not
malfunction or fail in a stated time period
! REPAIRABILITY: Ease of xing product
malfunctions/fails

DIFFERENTIATION
! STYLE: Products look & feel to a potential
buyer

ABSOLUT VODKA uses aesthetics in its print ads to
appeal to dierent market segments
DIFFERENTIATION - DESIGN
! Totality of features that aects how product
looks & functions in terms of customer
requirements
! Essential to dierentiate & position
product/service
! Gives company a competitive edge

DIFFERENTIATION - DESIGN
DIFFERENTIATION - SERVICE
! I f physi cal product not easi l y
dierentiated, Then, the key to
competitive success may lie in adding
valued services & improving their
quality

DIFFERENTIATION - SERVICE
! ORDERING EASE
! DELIVERY
! INSTALLATION: work done before a
product is considered operational in a
planned location
! CUSTOMER TRAINING
! CUSTOMER CONSULTING
! MAINTENANCE AND REPAIRS

DIFFERENTIATION - SERVICE
! RETURNS
! Controllable Returns - problems diculties
or errors of the seller or customer and can
be eliminated (proper packaging, storage,
transportation
! Uncontrollable returns

PRODUCT SYSTEM AND MIX
! PRODUCT SYSTEM - Diverse but related
items - function - compatible manner


PRODUCT SYSTEM AND MIX
! PRODUCT MIX - All products seller oers
for sale
! width, length, depth & consistency
! WIDTH - number of product lines
! LENGTH - number of items in mix
! DEPTH - how many variants in each line
! CONSISTENCY - how close lines are in end
use, distribution etc
PRODUCT LINE
! Series of related products oered by one
company. wi dt h, l engt h, dept h &
consistency
! RL clothing line, Home furnishing line
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LINE STRETCHING/
EXTENSION
! lengthens product line beyond current
range
! Down-Market Stretch - introduce lower-
priced line > WHY?
! Growth opportunities as mass-retailers
! Tie up lower-end competitors
! Its market - stagnating or declining
LINE STRETCHING/
EXTENSION
! Up-market Stretch - enter high end of
market for:
! More growth
! Higher margins, or
! Position as full-line manufacturers
! Two-Way Stretch if currently in middle
market - stretches line in both directions
LINE STRETCHING/
EXTENSION
! LINE FILLING - Product line lengthened
- add more items in present range
! Reach for prots
! Satisfy dealers-lost sales -missing line items
! Utilize excess capacity
! Be full-line company
! Plug holes - keep out competitors
When less is more.
Murketers ure leurnlng through, sometlmes, ulnful exerlences thut roduct
llnes cun get too long, or roducts cun become just too comllcuted.
LINE STRETCHING/
EXTENSION
! LINE MODERNIZATION, FEATURING &
PRUNING
! Product lines - constantly modernized in a
rapidly changing market
! Encourage customer migration to higher-
valued, higher-priced items
! Feature 1 or few items in line
! Periodic line review for deadwood that lowers
prots
PRODUCT MIX PRICING
! LINE MODERNIZATION, FEATURING &
PRUNING
! Product lines - constantly modernized in a
rapidly changing market
! Encourage customer migration to higher-
valued, higher-priced items
! Feature 1 or few items in line
! Periodic line review for deadwood that lowers
prots
PRODUCT MIX PRICING
! PRODUCT-LINE PRICING Develop product
lines, not single products & introduce price
steps

! OPTIONAL-FEATURE PRICING Oer
optional products, features & services along
with main product
PRODUCT MIX PRICING
! CAPTIVE-PRODUCT PRICING - use of ancillary or
captive products
! TWO-PART PRICING xed +variable fee Often
used by service rms

! BY-PRODUCT PRICING Producing certain
goods result in by-products
PRODUCT MIX PRICING
! PRODUCT-BUNDLING PRICING -bundle
products & feature.
! Pure bundling - Only oers products as
a bundle
! Mixed bundling - Oers goods,
individually & in bundles
COBRANDING
! 2 current brands combine - joint product,
marketed as 1
Advantages
! Product convincing - multiple brands
! Reduce costs to introduce product
! Learn more about consumers
Disadvantages
! Risks & lack of control due to pair-up
! Lack of focus on existing brands
COBRANDING
! For co-branding to be a success:
! The 2 brands each have brand equity
! Logical t of the 2 brands:
! Combined activity maximizes
advantages
! Minimizes disadvantages for both
COBRANDING
INGREDIENT BRANDING
! Create brand equity for materials or parts used in
other branded products
! Enough awareness so buyers do not buy the
host product without ingredients
! Self-branding- advertise their own branded
ingredients

PACKAGING
! Activities to design & produce the container
for a product
! May be up to 3 levels primary, secondary
and shipping package
! Well-designed packages Create
convenience & promotional value

PACKAGING
! Self Service
! Consumer Auence
! Company and brand image
! Innovation Opportunity
! Protecting IP rights
PACKAGING
! Packaging must achieve these objectives:
! Identify the brand
! Convey descriptive & persuasive
information
! Facilitate product transportation &
protection
! Assist at-home storage
! Aid product consumption

LABELING
! carries brand name or a great deal of
information
! Performs several functions:
! A label identies the product or brand
! A label might also grade the product
! A label might describe the product
! A label might promote the product

WARRANTIES & GUARANTEES
! All sellers are legally responsible to fulll a
buyers normal expectations
! Warranties - Formal statements of expected
product performance by manufacturer
! Whether expressed or implied - legally
enforceable

WARRANTIES & GUARANTEES
! Sellers oer general/specic guarantee
! Reduce buyers perceived risk
! Guarantees eective in 2 situations
! Company/product - well-known
! Product quality superior to competition

THANK YOU
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