Setting Product

Strategy
CREATED BY
ANDY REYHAN SUHENDRA
MUHAMAD ARNALDO

8215153192
8215152787

Product Characteristics
and Classifications
The product is anything that can be offered to the
market to satisfy the desires or needs.
Product Levels: The Customer Value Hierarchy
in planning its market offering, the marketer needs
to address five product levels adds more customer
value, and together the five constitute a customervalue hierarchy

Five Product Levels

1. Benefits core (core benefit)

Service or underlying real benefits for customers. A hotel guest bought the "rest
and sleep". Buyer drill buy "hole". Marketers should see himself as a benefits provider.
2. The basic products (basic product)
Marketers must change the core benefits into basic products. Example: a hotel
room
includes a bed, bathroom, towels, desk, dressing table and wardrobe.
3. Items are expected (expected product)
Marketers are expected to prepare the product, ie some attributes and conditions
that are usually expected to shoppers when they buy this product. Example : Hotel
guests expect a clean bed, a clean towel, reading light, and the levels of certain
calmness.
4. Items will be increased (augmented product)
Marketers preparing an improved product that exceeds customer expectations.
5. Candidates product (potential product)
by

Covers everything possible improvements and changes that may be experienced

the products or offer them in the future.

Product Classifications

Durability and Tangibility

1) Nondurable goods : tangible goods normally consumed in one
or a few uses ex : beer and shampoo
2) Durable goods : tangible goods that normally survive many
uses ex: machine tools and clothing
3) Services ex : haircuts, legal advice

Consumer Goods Classification

1) convenience goods : frequently, immediately, and with minimal
effort
2) shopping goods : those the consumer characteristically
compares on such bases as suitability, quality, price, and style
3) specialty goods : the have unique characteristics or brand
identification for which enough buyers are willing to make a special
purchasing effort.
4) unsought goods : those consumer does not know about or
normally think of buying, such as smoke detectors.

Industrial-Goods Classification
1) Materials and parts : goods that enter the
manufacturer product completely
2) Capital items : long lasting goods that
facilitate developing or managing the finished
products
3) Supplies and business services : short-term
goods and service that facilitate developing or
managing the finished products.

Differentiation

Product Differentiation

Form

Features

Performance Quality

Conformance Quality

Durability

Reliability

Repairability

Style

Service Differentiation

Ordering Ease

Delivery

Installation

Customer Training

Customer Consulting

Maintance and Repair

Design
is totally of features that affect the way a product looks, feels, and
functions to a consumer.

Design Leaders
As holistic marketers recognize the emotional power of design and the
importance to consumer of look and feel as well as function, design is
exerting a stronger influence in categories where it once played a small
role.

Power of Design
In a visually oriented culture, transmitting, brand meaning and
positioning through design is critical. in a crowded marketplace.
aesthetics is often the only way to make a product stand out.

Approaches to Design
Design is more than just creativity, or a phase in creating a product,
service or application. Its a way of thinking that can tranform an entire
enterprise. Design should penetrate all aspects of the marketing
program so all design aspect work together.

Luxury Product
Design is often an important aspect of luxury products, though these
product also face some unique issues

Characterizing Luxury Brands

significantly higher priced than typical items in their categories.

Growing Luxury Brands

The recent recession challanged many luxury brand as they tried to justify
their value proposition and avoid discounting their product.

Marketing Luxury Brands

Luxury marketers have learned is not viewed the same way around the
world. luxury brand marketers have to remember they are selling a
product quality, status, and prestige.

Product and Brand

Relationship

The Product Hierarchy

Product Systems and Mixed

Product Line Analysis

Product Line Length

Line Stretching

Line Filling

Line Modernization Featuring and Pruning

Product Mix Pricing

CO-Branding and Ingredients Branding

The Product Hierarchy

Need family
The core need that underlies the existence of a product family.

Product family
All the product classes that can satisfy a core need with reasonable effectiveness.
(Example: savings and income).

Product class
A group of products within the product family recognized as having a certain functional
coherence, also known as a product category. (Example: financial instrument).

Product line
A group of product within a product class that are closely related because they perform
a similiar function, are sold to the same customer groups are marketed through the
same outlets or channels, or fall within given price ranges. A product line may consist
of different individul brand that has been line extended. (Example: life insurance).

Product type
A group of items within a product line that share one of several possible forms of the
product. (Example: term life insurance).

Item (also called stock-keeping unit or product variant)

A distinct unit within a brand or product line distinguishable by size, price, appearance,
or some other attribute. (Example: Prudential renewable term life insurance).

Product Line Analysis

Analysis of the product line is needed tertama by a product
line manager in order to know the sales and profit of the
company so that it can take decisions in determining which
items should be developed, which should be maintained,
which captured the results or about the goods which will be
released.

Product Line Length

A company certainly wants to develop its business

both in terms of increased market share, or about
profitability. Companies that want to gain market
share and high growth market will generally choose
and have a longer product lines. While companies that
emphasize high profitability will have a shorter
product line that consists of items selected carefully.

However, the choice to extend the product line is more

often done by the company today. Regarding extend
product line, there are two ways you can do, the
stretching line (Line stretching) and filling line (filling
line).

Line Stretching

1) Stretcing to a Down Market:

A company may stretch down market when it sees strong growth

opportunities in value priced goods or if there is a risk of an attack
by a low end competitor but it also involves a lot of risk. For
example: Kodak launched Kodak Funtime Film to compete with lower
end brands.

2)Stretcing to a Up Market:

A company may stretch up market for higher margins or more

growth. However, they may not want to carry the same name when
they expand upwards. For example: Toyota a low end car producer
introduced a new and higher brand Lexus

3) Stretcing Two way stretch:

When the company stretches in both the directions. For example:

Texas Instruments launched calculators in both upper and lower
range

Line Filling

In extending the company's product line can also do

what is called the charging line. There are several
motives of companies charging lines, including:
Obtaining the additional earnings
Satisfy dealer complained of lost sales because they
do not have the kinds of products in these lines
Utilize the excess capacity
To be the leader in full-line
Trying to cover the hole that is not filled competitors

Line Modernization Featuring and

Prunning

The product line needs to be modernized. In a

fast-changing market, the modernization
carried out continuously. The product line
managers usually choose one or several types
of products in the lines to find. Periodically
must learn to see the product line who did not
produce again putting pressure on profits.
Pruning is also done when the company
suffered a shortage of capacity.

Product Mix Pricing

marketers must modify their price-setting logic
when the product is part of a product mix. In a
product mix pricing, the firm searche for a set
prices that maximize profits on the total mix.

Product Line Pricing

Optional-Feature Pricing

Captive-Product Pricing

Two-Part Pricing

By-Product Pricing

Product-Bundling Pricing

CO-Branding and Ingredients

Branding

Co Branding : marketers often combined their

products with products from other companies in
various ways. In co-branding also called dual
branding or brand bunding two or more wellknown brands are combined into join products
marked together in some fashion. Ex : Food
court

Ingredient Branding : special case of cobranding. Its creates brand equity for materials,
components, or parts that are necessarily
contained within other branded products.

Packaging, Labeling, Warranties and

Guarantees

Packaging

Is designing and producing containers for products. Bottles

as primary packaging put into cardboard boxes (secondary
packaging) contained in the shipping box .

Labeling

The label can be a simple attached tag or elaborated

designed graphic that is part of the package

Information or only the brand name.

A label performs several function :

Identifies the product or brand

Grade the product ex : peaches grade labeled A, B and C

Describe the product : who made it, where and when, how it
is to be used, how to use it safely.

Warranties and
Guarantees

Security is a formal statement of the expected

performance of the product by the
manufacturer. Product warranty can be returned
to the factory or service center designated to
carry out the repair, replacement, or refund