What is a Product?

1. What is a Product? • Anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need. • Includes: physical objects, services, events, persons, places, organizations, ideas, or some combination thereof. Lähde: Kotler-Armstrong, Principals of Marketing

2. Levels of a Product Lähde: Kotler-Armstrong, Principals of Marketing

3. What is a Product? BMW • Augmented • Social status • Brand name • Actual • Luxuriant car • Stereo, trim, engine size • Showroom • Core • Transport for one or more people Augmented Actual Core Lähde: Kotler-Armstrong, Principals of Marketing

4. Individual Product Decisions Lähde: Kotler-Armstrong, Principals of Marketing

5. Product and Service Attributes • Quality LAATU • Performance and satisfaction includes level and consistency • Features OMINAISUUDET • Differentiates a product from the competition; assessed based on value and cost • Style and Design TYYLI JA DESIGN • Style = Appeareance • Design = heart of the product Lähde: Kotler-Armstrong, Principals of Marketing

6. Branding • Creating, maintaining, protecting, and enhancing products and services. • A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service. Lähde: Kotler-Armstrong, Principals of Marketing

7. Branding • Advantages to buyers: • Product identification • Product quality • Advantages to sellers: • Basis for product’s quality story • Provides legal protection • Helps to segment markets Lähde: Kotler-Armstrong, Principals of Marketing

8. Packaging • Designing and producing the container or wrapper for a product. • Developing a good package: • Packaging concept • Package elements • Product safety • Environmental concerns Lähde: Kotler-Armstrong, Principals of Marketing

9. Labeling • Printed information appearing on or with the package. • Performs several functions: • Identifies product or brand • Describes several things about the product • Promotes the product through attractive graphics Lähde: Kotler-Armstrong, Principals of Marketing

10. Product Support Services • Assess the value of current services and obtain ideas for new services. • Assess the cost of providing the services. • Put together a package of services that delights the customers and yields profits for the company. Lähde: Kotler-Armstrong, Principals of Marketing

11. Product Lines • What is a Product Line? • A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlet, or fall within given price ranges • Example Product Lines • Toyota cars • iPods • Coke – cans, multi-packs, bottles (glass/plastic) Lähde: Kotler-Armstrong, Principals of Marketing

12. Product Line Decisions Product Line Length - Number of items in the product line • Stretching • Lengthen beyond current range. • Downward • Upward • Both directions Filling Lengthen within current range. Lähde: Kotler-Armstrong, Principals of Marketing

13. Product Mix Decisions • Product Mix: all of the product lines and items that a particular seller offers for sale. • Width: the number of different product lines the company carries. • Depth: the number of versions offered of each product in the line. • Consistency: how closely related the various lines are. Lähde: Kotler-Armstrong, Principals of Marketing

14. Brand Equity • The positive differential effect that knowing the brand name has on customer response to the product or service. • Provides: • More brand awareness and loyalty • Basis for strong, profitable customer relationships Lähde: Kotler-Armstrong, Principals of Marketing

15. Major Brand Strategy Decisions Lähde: Kotler-Armstrong, Principals of Marketing

16. Brand Name Selection • Desirable qualities for a brand name include: • It should suggest product’s benefits and qualities • It should be easy to pronounce, recognize, and remember • It should be distinctive • It should be extendable • It should translate easily into foreign languages • It should be capable of registration and legal protection Lähde: Kotler-Armstrong, Principals of Marketing

17. Brand Sponsorship • Four options / NELJÄ VAIHTOEHTOA • Manufacturer’s brands • Co-branding • Private brands • Licensed brands Lähde: Kotler-Armstrong, Principals of Marketing

18. Branding Strategies Product Category Existing New Line Extension Brand Extension Existing Brand Name Multibrands New Brands New Lähde: Kotler-Armstrong, Principals of Marketing

19. Line Extension • Same Brand Name – Additional Items • New flavours • New sizes – Family/fun size • Ingredients – fat-free, vitamins • This is by Far the Most Common Branding Activity • Safety – an understood market • Meets customer demands for variety • Problems • Can dilute focus of the brand • Coke – regular, can, bottle, diet, diet with lemon, diet with vanilla or cherry? Lähde: Kotler-Armstrong, Principals of Marketing

20. Brand Extension • Using a Successful Brand Name to Launch a New Product • Fairy Liquid – Fairy Detergent • Sony TV – Sony Playstation • Can Fail • Heinz Soup – Heinz pet food • Porsche Cars – Porsche Toasters • Some Brands Stretch Further than Others • Virgin – rail, mobile phones, air, music, cola • The Extension MUST be Compatible with the Original Product/Associations Lähde: Kotler-Armstrong, Principals of Marketing

21. Multibrands • Where the Focus is on the Brand, Not the Manufacturer • Lever – Persil, Surf, Radion • Tends to happen where the firm has more than one brand in the same market • Product Families • Some firms have brands for ranges of their products • Families grouped together by price/quality etc • Matsushita - Technics, National, Panasonic • Drawbacks • Cannibalisation • Can be very costly Lähde: Kotler-Armstrong, Principals of Marketing

22. New Brands • Toyota and Lexus • To create differentiation between the brands • To increase the gap in perception • Toyota=Mass market - Lexus=Luxury • Brand Proliferation • Can cause weakness across the portfolio • Megabrand strategies – only the strongest receive investment • Fighter Brands Lähde: Kotler-Armstrong, Principals of Marketing

23. Major Stages in New-Product Development Lähde: Kotler-Armstrong, Principals of Marketing

24. Concept Development and Testing • Product Idea: idea for a possible product that the company can see itself offering. • Product Concept: detailed version of the idea stated in meaningful consumer terms. • Product Image: the way consumers perceive an actual or potential product. Lähde: Kotler-Armstrong, Principals of Marketing

25. Product Life Cycle Sales and Profits ($) Sales Profits Time Product Develop- ment Introduction Growth Maturity Decline Losses/ Investments ($) Sales and Profits Over the Product’s Lifetime Lähde: Kotler-Armstrong, Principals of Marketing

26. Practical Problems of PLC • Hard to identify which stage of the PLC the product is in • Hard to pinpoint when the product moves to next stage • Hard to identify factors that affect product’s movement through stages • Hard to forcast sales level. Length of each stafe and shape of PLC • Strategy is both a cause and result of the PLC Lähde: Kotler-Armstrong, Principals of Marketing

27. Maturity Stage of the PLC • Modifying the Market: Increase the consumption of the current product. • How? • Look for new users and market segments • Reposition the brand to appeal to larger or faster-growing segment • Look for ways to increase usage among present customers Lähde: Kotler-Armstrong, Principals of Marketing

28. Maturity Stage of the PLC • Modifying the Product: Changing characteristics such as quality, features, or style to attract new users and to inspire more usage. • How? • Improve durability, reliability, speed, taste • Improve styling and attractiveness • Add new features • Expand usefulness, safety, convenience Lähde: Kotler-Armstrong, Principals of Marketing

29. Maturity Stage of the PLC • Modifying the Marketing Mix: Improving sales by changing one or more marketing mix elements. • How? • Cut prices • Launch a better ad campaign • Move into larger market channels • Offer new or improved services to buyers Lähde: Kotler-Armstrong, Principals of Marketing