MANAGING PRODUCTS

1. MANAGINGPRODUCTS Dr. Vesselin Blagoev

2. What is aproduct ? • Anything that can be offered to a market for attention, acquisition or consumption including physical objects, services, personalities, organizations and desires • Anything that the consumer receives that is of value in terms of perceived need, want or satisfaction

3. Product Israel. In Café Ke’ilu (Café Make Believe) you get no food. What you are served is an empty plate and an empty mug against $3 during the week and $6 on weekends. Manager Nir Caspi said: “…people come to cafes to be seen and to meet people, not for the food.” An expert says: “What consumers really want is [offers] that dazzle their senses, touch their hearts, and stimulate their minds.” Source: Kotler and Armstrong (2004)

4. Continuum of product offerings All products/ product offerings include an element of ‘service’ Physical items Services

5. Types of product • According to Ph.Kotler there are 4 categories of products: • Pure services (consulting) • A major service wit accompanying minor goods and services (education) • A tangible good with accompanying services (PC in a network) • Pure tangible products (lipsticks)

6. Possible Blends of Physical Goods and Services 100% Canned soup, nails, steel pipes Restaurant meals, car service Physical good emphasis Financial and postal services 100 % Service emphasis

7. Services • Intangibility: it can not be experiences in advance of purchase • Lack of ownership • Inseparability: it takes place at the same time as its delivery • Perishability: Services can not be stored or kept • Variability: each delivery is unique, no standardization of output

8. Products Consumer products Business products Installations Convenience products Staples Accessories Shopping products Homogeneous Heterogeneous Farm products Natural … Raw materials Components Parts Materials Specialty products Professional services Unsought products Operating & Repair supplies New unsought Regularly … Supplies (life insurance) Shares, bonds

9. Product Product idea Package Brand • Physical good • Features • Quality level • Accessories • Installation • Instructions • Warranty • Product line • Protection • Promotion • Stile • Second function • Type of brand: • Individual • Family • Manufacturer • Dealer

10. Product differentiation Augmented product Delivery, credit, installation, consulting, guarantee, after sale service Expectedproduct Physical characteristics, quality, design, style, price, brand, packing Core product Potentialproduct Image, recognition, recommendation

11. Product differentiation • The core product: the essential elements of the product/service • The expected product: what customers have come to expect as normal addition to the product • The augmented product: the features that go beyond the normal customers expectation • The potential product: something else which customers could see as beneficial

12. Product mix Value Non-price Price Perceived quality

13. Hospitality product • The hospitality product can be defined as the set of satisfactions and dissatisfactions which a customer receives from a hospitality experience. The satisfactions may be physiological, economic, social, and psychological.

14. Hospitality product

15. Hospitality product

16. Hospitality product

17. Product lifecycle (PLC) Introduction Growth Maturity ( Saturation ) Decline

18. Market conditions during the PLC Condition Introduction stage • Market growth Slow • Market penetrationLow • Market segmentationAimed at risk takers • Differentiation(for aUnique product, (for a radical new prod)favorable differentiation) • Number of brandsFew • Number of competitorsNone, or few (if a ‘metoo’ product) • Industry capacityLow

19. Market conditions during the PLC Condition Growth stage • Market growth Fast acceleration • Market penetrationFast acceleration • Market segmentationHigh • Differentiation(forDecreased a radical new prod)differentiation • Number of brandsIncreasing • Number of competitorsGrowing • Industry capacityHigh and rapidly increasing as profit opportunities noted

20. Market conditions during the PLC Condition Maturity stage • Market growth Leveling • Market penetrationHigher • Market segmentationHighest • DifferentiationImproved products are marketed; often unfavorable differentiation • Number of brandsHighest • Number of competitorsMany • Industry capacityOptimal

21. Market conditions during the PLC Condition Decline stage • Market growth Decline • Market penetration Highest • Market segmentation High • Differentiation Often unfavorable differentiation • Number of brands High dropout rate • Number of competitors High dropout rate • Industry capacity Overcapacity

22. Branding • Branding is the process by which companies distinguish their product offerings from the competitors The brand is created by developing a distinctive name, design and packaging. Some brands are supported by logos.

23. Brand • A name, term, design, symbol, packaging, logo or any other feature that identifies one seller’s good or service as distinct from those of other sellers

24. Brand name That part of a brand that can be spoken, including letters, words or numbers

25. Brand mark The element of a brand that cannot be spoken, often a symbol or design

26. Trademark Legal designation indicating that the owner has exclusive rights to use the brand name

27. Brand types • Manufacturers’ brands • Own-label (private) brands

28. Brand typesCategories, brands and variants e.g. soup Category Brand A Brand B Brand C e.g. Heinz Variants A1 A2 A3 Variants B1 B2 B3 Variants C1 C2 C3 e.g. tomato

29. Types of brands • Generic brands – no brand at all • Manufacturer brands • Own label, also called Private brands or Dealer brands • Individual brands • Family brands

30. Types of brands • Individual branding: A policy of naming each product differently (P&G – Tide, Bold, Daz, Dreft) • Overall family branding: Microsoft, Heinz • Line family branding: GM, Colgate-Palmolive • Brand extension branding: An existing brand name is used as a part of a new one

31. Brand recognition A customer’s awareness that a brand exists and is an alternative to purchase

32. Brand loyalty A strongly motivated and long standing decision to purchase a particular product or service

33. Brand preference The degree of brand loyalty in which a customer prefers one brand over competitive offerings

34. Major elements of brand equity Brand name awareness Brand loyalty Brand equity Perceived Brand loyalty Brand associations

35. Creating a brand Brand name, image Quality and design Brand potential Brand potential Core product Delivery Packaging Service Guarantees Brand potential

36. Branding successful brands Quality Positioning Well-blended communications Repositioning Brand building Being first Long-term perspective Internal marketing

37. Global branding decisions • Brand form • Quality • Formulation • Design • Variants • Brand additionals • Delivery • Service • Guarantees Global branding • Brand communications • Name • Execution • Packaging

38. Brand name strategies Family brand names Used for all products, e.g. Philips, Heinz, Del Monte

39. Brand name strategies Combination brand names A combination of family and individual brand namesis developed on the reputation of the company + allowing the individual brands to be distinguished and identified, e.g. Mercedes C300, Microsoft Word

40. Brand name strategies • Brand extension, e.g. United Distillers uses Johnnie Walker for different liqueurs • Brand stretching, e.g. Bic (disposable pens) brand name is used on lighters, razors, perfumes and women’s tights

41. Brand name considerations A good brand name should: • Evoke positive associations • Be easy to pronounce and remember • Suggest product benefits • Be distinctive • Use numerals when emphasizing technology • Not infringe an existing registered brand name