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What is a Product?

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.Physical Products: Tide, Ford, ChevyServices: Haircuts, Nails, Travel PlanningPersons: Presidents, Stars, AnnouncersPlaces: Vacation Spots, States, Cities Events: Olympics, Concerts

Organizations: Red Cross, Heart Association.Idea: Healthy Food, Exercise


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A Product in Three Levels:

Actual Product

AugmentedProduct

CoreProduct

Scott Smith


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The Core Product

  • Core Product: What is the buyer really buying? .... Core benefits, Problem Solving services.

  • Examples:Lipstick....... Beauty, Hope, not lip colorDrill Bit ...... A finished project, 1/4” Hole, but not a bit


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The Actual Product

Product Attributes:

Quality Level: Lexus....

Features: Sunroof, Walnut Trim,...

Styling: Sleek, Sporty

Brand Name: Lexus

Packaging: Style and Grace

Scott Smith


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Augmented Product

  • Consists of Additional Consumer Services and Benefits....Augmented benefits may become expected benefits

Camcorder: Complete solution to picture-taking problems. Warranty on parts and workmanship, Instruction on how to use camcorder,

Toll free number for questions and problems

Haircut: Doctor’s Exam: few tangible featuresPark Lane Hotel, Hong Kong: Candy on hotel pillow, basket of fruit,

manager escorts you to room, Pillbox hat white uniforms,

messaging service (printed and voice), toiletries.Perfume: Fantasy, memories, hopes, dreams, romance, passion,

femininity, success, life style, self-expression, exclusivity


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Durable Goods:Products used over an extended period of time: Refrigerators, Autos, Furniture

NonDurable GoodsConsumed in one or a few uses:Soap, Salt, food products

Services:Activities, benefits or satisfactions for sale:Haircuts, repairs

Consumer GoodsGoods and services consumers buy frequently, immediately, with a minimum of comparison or buying effort:Convenience GoodsShopping GoodsSpecialty GoodsUnsought Goods

Product Classifications


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Consumer Goods

  • Convenience GoodsStaple Goods: Heinz Ketchup, Crest Impulse Goods: Twinkies, Candy bars Emergency Goods: Umbrella, boots

  • Shopping goods: Goods that are compared based on suitability, quality, price, style. Furniture, Clothing, Cars, Major Appliances

  • Specialty Goods: Consumer goods with unique characteristics or brand identification for which a significant group of buyers are willing to make a special purchase effort: Jaguar, Lexus, Rolex

  • Unsought goods: Consumer goods the consumer does not know about or does not normally think about buying: Life Insurance, encyclopedias


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How Do You Best Obtain a Sustainable Competitive Advantage?

  • Reputation for Quality

  • Customer Service / Product Support

  • Name Recognition / High Profile


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Achieving a Sustainable Competitive Advantage

  • Achieve differentiation in the product delivery attributes:Price, Quality, Aesthetics, Functionality, Availability, Consumer Awareness, Visibility, Service

  • Achieve differentiation on the key buying attributes:1, 2, or 3 attributes may be critical... Others are marginalLaptop: Battery Life, Physical Profile, Power

  • Achieve breadth of attraction and depth of preference

  • Achieve Capability GapBusiness Systems GapPositioning Gaps: Reputation, Consumer Awareness, CapabilityRegulatory / Legal GapOrganizational / Managerial Gap


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What is Brand Equity?

Perceived

Quality

Name

Brand

Awareness

Associations

Brand

Other

Loyalty

Proprietary

Brand Assets

Brand Equity

Provides Value to Customer

Provides Value to Firm

*

Interpretation of Info.

*

Efficient/Effective Mkt.

*

Confidence in Decision

*

Brand Loyalty

*

Use Satisfaction

*

Brand Extensions

*

Trade Leverage

*

Competitive Advantage


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Branding Definitions

  • A Brand is: name, term, sign, symbol, design, or combination of these intended to identify the good or service, and differentiate them from those of competitors

  • Brand Name: The vocalized part of the brand... Tide, Avon, Chevrolet, Disneyland, AMEX

  • Brand mark: The symbol, design, color, letters: Pillsbury doughboy, MGM Lion, K on Kodak box

  • Trademark: The part of the brand given legal protection to brand name or brand mark

  • Copyright: Legal right to reproduce, publish and sell the matter and form of a literary musical or artistic work.


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Branding Decisions:Family Brands

  • Individual Brand Names P&G (Tide, Crest, Folger’s Pampers)General Mills (Bisquick, Gold Medal, Betty Crocker, Nature Valley, Yoplait)

  • Blanket Family Name for all productsHeinz and General Electric

  • Separate family names for all productsSears (Kenmore, Craftsman, Homart)

  • Company trade name combined with individual product namesKellogg’s (Corn Flakes, Rice Krispies, Raisin Bran)


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Brand Decisions

  • Brand Extension: Use successful brand name to launch new or modified products: Ivory: dishwashing detergent, hand soap, shampooFruit of the Loom: Socks, fashion underwear, women's underwearHonda: LawnmowersScott Paper Co.: ScotTowels, ScotTissues, Scotkins, BabyScott diapers... tough competition from Charmin, Bounty, Kleenex, Pampers

  • Multibrand:Multiple brands in the same product category: P&G Cheer vs. TideGM: Capture brand switchers using multiple brands

  • Brand Repositioning:Change both the product and image: Ivory Soap: “Baby Soap” to “All Natural Soap” Marlboro: women’s cigarette to man’s cigaretteVelveeta: “Cooking Cheese to “Good tasting, natural and nutritious”

  • Brand Names:(1) Suggest qualities, benefits: Beautyrest, Craftsman, Sunkist, Spic and Span, Mr.. Clean, (2) Easy to pronounce, recognize and remember: Tide, Aim(3) Distinctive brand name: Taurus, Kodak, Exxon, IBM, Xerox(4) Translate easily into foreign languages: (5) Capable of registration and legal protection (Miller Lite refused)


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Individual Product Decisions

  • Product Attribute Decisions:Product Quality: At Ford, Quality is Job #1Product Features: Strip down vs full featured. What features improve the product?Product Design Black and Decker cordless tools, Steelcase furniture Bose audio equipment Herman Miller furniture


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Product Line Decisions

  • Product Line Length: (Full Vs. Incomplete line) Expanded by Product Line Stretch and FillingStretch: Upward, Downward, Two-way

Examples:

Marriott: Marquis, Courtyard,Fairfield Inn,Residence InnProduct Line Fill:Sony Walkmans:Solar PoweredWaterproofUltralightTape, CD, MD, MP3

New Products

High

Upward

PresentProducts

Price:

New Products

Downward

Low

Low

High

Quality


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Product Line Decisions

  • Product Line Breadth, Length, Depth,ConsistencyBreadth: Number of different product lines: Avon: cosmetics, jewelry, fashions, household itemsLength: total number of items the company carries(many different brands: Tide, Joy, Dash, Gain)Depth: number of versions offered of each product in the line Crest: many formulations and sizesConsistency: Closeness of end use, production requirements, distribution channels


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Product Mix Breadth and Length

Product Mix Breadth

Example: Product Gamble: Length is 42


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Advertising Hierarchy of Effects Model

Awareness - Interest - Desire - Action

Unaware Purchase - Loyalty


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Product - Market Strategies

An Overview

Existing Product New Product

Existing Market Market Product

Development Development

New Market Market Diversification

Segmentation


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Elapsed Time From Idea to Introduction

Product Idea Test Market Launch Time

BirdsEye Froz. 1908 1923 15 Yrs.

Ban Roll-On 1948 1954 6 Yrs.

Crest 1945 1955 1956 10 Yrs.

Gerber B.Food 1927 1928 1 Yr.

Luster Creme 1950 .. 1958 8 Yrs.

Hills Bros.Inst 1934 1956 22 Yrs.

Maxim FreezeDC 1954 1964 10 Yrs.

Stripe T.P. 1952 1957 1958 6 Yrs.

Minute Rice 1931 1949 18 Yrs.


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