MARKETING

MANAGEMENT
Dr. Mehdi Hussain
Lecture 7
Contents

• What are the characteristics of products?

• How can a company build and manage its
product mix and product lines?
• How can a company make better brand
decisions?
• How can packaging and labeling be used as
marketing tools?
 Product
Product: Anything that can be offered to a market to satisfy a want or need.
Physical goods
Services
Experiences
Events
Persons
Places
Properties
Organizations
Information
Ideas
 Product Levels
Five different levels of a product
• Core benefit
• Basic product
• Expected product
• Augmented product
• Potential product

Example???
Augment: cost, benefit soon expected.
 Product Levels (An Example)
•Core benefit: a car buyer is looking for auto movement from one place to
another.
• Basic product: a car with sitting arrangement, and other basic requirement.
• Expected product: car buyer expects a good fuel efficient engine, nice
spacious sitting, spare tire, and good shape, and at least a radio system.
•Augmented product: marketers’ offer a car beyond customers’ expectation.
In addition to the features of the expected car marketer offers auto
transmission, cruise control, rear-window defrosting, compact disc music
system, open roof, and so on.
• Potential product: free driving lessons, car mortgage arrangement.
 Product Classification
•Two terms
• Product system: a group of diverse but related items that function in a
compatible manner. Camera, Vacuum machine
• Product mix: the set of all products and items that a particular seller
offers for sale to buyers
Product Classification
Classification on the basis of durability and tangibility
• Nondurable goods: (consumed in one or a few use) soft drinks,
soap. Make available in many locations
• Durable goods: normally survive many uses. Refrigerators,
clothing. Personal selling, more warrantees,
• Services: haircuts and repairs. More quality control
 Product Classification
Classification on the basis of use
Consumer-goods classification
• Convenience goods
• Staples: Routinely purchased. Close up toothpaste, Mortin
insect killer etc.
• Impulse goods: Purchased without planning. Ice-cream,
chocolate bar, magazine etc. display widely
• Emergency goods: umbrella. Torch. Attention grabbing display
• Shopping goods: Customers compare on suitability, quality, price,
style. Furniture, clothing, used cars.
• Specialty goods: Have unique characteristics or brand
identifications. Mercedes, cameras, men's suits etc.
• Unsought goods: life insurance, funeral stuffs.
 Product Classification

Classification on the basis of use

Industrial-goods classification
Materials and parts: Goods that enter manufacturer
products completely
• Farm products: Rice, cotton, livestock, fruits, vegetables
• Natural products: lumber, crude petroleum, iron ore
• Manufactured materials and parts
• Component materials: fabricated further. iron, yarn. Price
and suppliers reliability is more important
• Component parts: enter finish products completely with
no further change. small motors, tires.
 Product Classification
Classification on the basis of use
Industrial-goods classification
Capital items: long lasting goods that facilitate developing or managing
finished product
• Installations: consists of buildings and fixed equipment. Factories,
offices, generators, mainframe computers, elevators
• Accessory equipments: portable factory equipment and tools and office
equipment. Desktop computers.
Supplies and business services: short term goods and services that
facilitate developing or managing finished product
• Maintenance and repair items: paint, nails, brooms.
• Operating supplies: lubricants, coal, writing paper, pencils
• Maintenance and repair services: window cleaning, copier repair
• Business advisory services: legal, management consulting, advertising
Product Differentiation
To be branded, products must be differentiated
Ways of services differentiation:
Form
Features: customer value vs company cost; feature fatigue
Customization
Performance quality: low, medium, high, superior
Conformance quality
Durability: expected operating life under normal and stressful
conditions. Consider cost and obsolescence
Reliability: probability that a product will not fail or malfunction
within a specified time period
Repairability: ease of fixing when malfunctions
Style: looks and feel to buyer and creates distinctiveness that is hard
to copy
Services Differentiation
Ways of services differentiation:
• Ordering ease
• Delivery
• Installation
• Customer training
• Customer consulting
• Maintenance and repair: (online technical
support)
• returns
 Product Mix Decisions
Product mix (Product assortment):Set of all products and
items that a particular seller offers for sale. e.g., Partex
group offers a number of product lines.
Product mix has a certain:
Width: how many product lines.
Length: total number of items in the mix.
Depth: how many variants are offered of each product in
the line.
Consistency: how closely the product lines are related.
Product Mix Decisions
Product-Mix Width and Product-Line Length for Proctor&
Gamble Products (assumption)
Product-Mix Width

Disposable Paper
Detergents Toothpaste Bar Soap Diapers Tissue
Ivory Snow Gleem (1952) Ivory Pampers Charmin
(1930) (1879) (1961) (1928)
Crest (1955)
PRODUCT- Dreft (1933) Kirk’s (1885) Luvs Puffs
LINE (1976) (1960)
LENGTH Tide Lava
(1946) (1893) Banner
(1982)
Cheer Camay
(1950) (1926) Summit
(1992)
 Product Line Decisions
Product line managers need to know the sales and profits of each item
in their line to determine which items to build, maintain, harvest or
divest. Also understand market profile and image
• Product line analysis through sales and profits
Product Line Decisions
• Product line analysis through market profile and image
Product Line Decisions
Product line length analysis
• Line stretching
Down-market stretch
Up-market stretch
Two-way stretch
• Line filling
 Product Mix Pricing

• Product line pricing

• Optional-feature pricing
• Captive-product pricing
• Two-part pricing
• By-product pricing
• Product-bundling pricing: (pure bundling and
mixed bundling)
 Individual Product Decisions
• Product attribute decisions: quality, features,
design
Which feature to add?
Rear window defrosting
Cruise Control
Power Steering
• Branding decisions: co-branding (same company
co-branding; joint-venture co-branding; multiple
sponsor co-branding; retail co-branding);
Ingredient branding
 Individual Product Decisions
• Packaging: primary, secondary, shipping
• Labeling
• Warranties
Product Life-Cycle Marketing Strategies
• A company’s positioning
and differentiation
strategy must change as
its product, market, and
competitors change
over the PLC

Figure 12.5 Sales and Profit Life Cycles

Figure 12.6 Common Product Life-Cycle Patterns

Copyright © 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Marketing Strategies: Introduction Stage

• Pioneering advantages
• Recall of brand name
• Establishes product class attributes
• Captures more uses in middle of market
• Pioneering drawbacks
• Imitators can surpass innovators
• Once leadership is lost, it’s rarely regained
Marketing Strategies: Growth Stage

• To sustain rapid market share growth now:

• Improve product quality and add new features
• Add new models and flanker products
• Enter new market segments
• Increase distribution coverage and enter new distribution channels
• Shift from awareness and trial communications to preference and loyalty
communications
• Lower prices to attract the next layer of price-sensitive buyers
Marketing Strategies: Maturity Stage

• Market modification
• convert nonusers,
• enter new market segments,
• attract competitors customers,
• have consumers use the product on more occasions,
• have consumers use more of the product on each occasion,
• have consumers use the product in new ways.
• Product modification
• Marketing program modification
Marketing Strategies: Decline Stage
• Eliminating Weak Products
• Harvesting and Divesting
 Managing Services
A service is any act or performance that one party
can offer to another that is essentially intangible &
does not result in the ownership of anything
Categories of Service Mix
1. Pure tangible good: soap, toothpaste, salt
2. Tangible good with accompanying services:
automobile
3. Hybrid: restaurant food
4. Major service with accompanying minor goods and
services: airline transport
5. Pure service: baby-sitting, psychotherapy, massages
Managing Services
 Characteristics of Services
Four Distinctive Characteristics
1. Intangibility
2. Inseparability
3. Variability: standardize service-performance process
throughout organization
4. Perishability
A Service-Performance-Process Map: A
Floral-Delivery Organization
 Managing Service Quality

Customers form service expectations from many sources

5 gaps cause failed delivery between:
1.consumer & management perception
2.management perception & service-quality specification
3.service-quality specifications & service delivery
4.service delivery & external communications
5.perceived & expected service
Figure
Service-Quality Model
 Managing Service Quality

Five Quality of Service Quality in order of importance

1. Reliability
2. Responsiveness
3. Assurance
4. Empathy
5. Tangibles