MODULE#10 Product Concept
MODULE#10 Product Concept
PRODUCT CONCEPT
LEARNING OUTCOMES
The number of product lines offered by an organization is referred to as its product mix
width. Exhibit 10.1 shows that Campbell's product mix spans five product lines. The sauces
product line has four product items, as shown in Exhibit 10.1, and the frozen entrée product
line has three product items.
Firms broaden their product mix in order to diversify risk. Firms also diversify their
product offerings in order to capitalize on established reputations. Starbucks, for example,
purchased specialty upscale tea retailer Teavana in order to expand its portfolio of beverage-
related businesses. Teavana sells loose-leaf teas, tea accessories, and food items. Starbucks
intends to position tea in the same way that it does coffee: as a luxury beverage rather than
a commodity.
PRODUCT MODIFICATION. Marketing executives must decide whether and when to modify
existing products. A product modification is a change in one or more of the following
characteristics of a product:
Quality modification: a shift in the dependability or durability of a product Lowering
the quality of a product may allow the manufacturer to lower the price and appeal to
target markets that could not afford the original product. Increasing quality, on the
other hand, can help the firm compete with rival firms. Barnes & Noble, for example,
offers a color version of its Nook that runs Android apps, allowing it to compete with
tablet and netbook manufacturers such as Dell and Asus. Increasing quality can also
lead to increased brand loyalty, a greater ability to raise prices, or new market
segmentation opportunities.
Functional modification: a change in the versatility, effectiveness, convenience, or
safety of a product Cat's Pride introduced a new litter, Fresh & Light Ultimate Care, in
2015, with a unique ultra-lightweight formula that is beneficial to both cats and their
owners. It is half the weight of traditional scoopable clay cat litters, has superior
clumping ability, and a dust-free formula.
Style modification: a cosmetic (how the product looks) product change rather than a
functional or quality change Style changes are frequently used by clothing and
automobile manufacturers to encourage customers to replace products before they
wear out.
The term "planned obsolescence" refers to the practice of modifying products so that
those that have already been sold become obsolete before they need to be replaced.
Products such as printers and cell phones, for example, become obsolete because technology
evolves at such a rapid pace.
Some argue that planned obsolescence is wasteful, while others argue that it is
unethical. Marketers respond that consumers prefer style changes because they enjoy
changes in the appearance of goods such as clothing and automobiles. Marketers also argue
that it is up to consumers, not manufacturers or marketers, to determine when a style is no
longer fashionable.
product mix width the number
REPOSITIONING. As explained in previous module, of product lines an organization
offers
repositioning entails changing consumers' perceptions of a product line depth the number
of product items in a product line
brand. McDonald's has long fought to reposition itself as a
product modification changing
healthy fast food option, despite being known primarily for its fat- one or more of a product’s
characteristics
, sugar-, and salt-laden product offerings. McDonald's also
planned obsolescence the
announced that it would use menu boards and national television practice of modifying products so
those that have already been sold
advertising to help customers understand the nutritional options become obsolete before they actually
available to them. Changing demographics, declining sales, and need replacement
social changes are frequently motivators for a company to product line extension adding
reposition an established brand. According to the company's additional products to an existing product
line in order to compete more broadly in the
research, while only 38% of its shoppers said the store was their industry
favorite, 54% of Hispanic Millennials said Target was their
favorite. Several departments, including the baby department,
will be renovated to cater to Hispanic moms.
PRODUCT LINE EXTENSIONS. When a company's management decides to add products to an
existing product line in order to compete more broadly in the industry, this is referred to as a
product line extension. Krispy Kreme has recently launched a new line of ready-to-drink
iced coffees. Coffees that it intends to sell in Walmart locations that sell Krispy Kreme
products. The drinks are reasonably priced, convenient, and come in the signature Krispy
Kreme donut flavors. The company hopes to increase the number of coffee drinkers and
Walmart customers who purchase their products. Furthermore, Krispy Kreme will try to
capture a larger share of the home-brew consumer market by selling packages of its coffee
blends at select Sam's Club locations in the Southeast.
A company may introduce too many products, or demand for the type of products
introduced may change over time. When this occurs, a product line becomes overextended.
Product lines can be overextended if and only if the following conditions are met:
Some products in the line do not contribute to profits because of low sales or they
cannibalize sales of other items in the line.
Manufacturing or marketing resources are disproportionately allocated to slow-
moving products.
Some items in the line are obsolete because of new product entries in the line or new
products offered by competitors.
PRODUCT LINE CONTRACTION. Marketers can get carried away with product extensions at
times. Product line contraction is a strategic approach to dealing with overextension. Yahoo
announced in March 2013 that it would be discontinuing seven products: The Yahoo
BlackBerry app, Sports IQ, Yahoo Message Boards, Yahoo Avatars,
Yahoo Clues, Yahoo App Search, and Yahoo Updates. “Ultimately, brand a name, term, symbol, design,
or combination thereof that identifies a
we're making these changes to sharpen our focus,” said Jay seller’s products and differentiates
Rossiter, executive vice president of platforms at Yahoo. “By them from competitors’ products
brand name that part of a brand
focusing on our core products and experiences, we'll be able to that can be spoken, including letters,
make our existing products the best they can be”. words, and numbers
brand mark the elements of a brand
When a company contracts an overextended product line, that cannot be spoken
three major benefits are likely. First, resources are directed brand equity the value of a
company or brand name
toward the most important products. Second, managers no global brand a brand that obtains at
longer squander resources attempting to boost the sales and least a one-third of its earnings from
outside its home country, is
profits of underperforming products. Third, because more recognizable outside its home base of
financial and human resources are available to manage new- customers, and has publicly available
marketing and financial data
product items, they have a better chance of success. brand loyalty consistent preference
for one brand over all others
10-4 BRANDING
The ability of the target market to distinguish one product from
another is an important factor in the success of any business or
consumer product. Branding is the primary tool used by
marketers to differentiate their products from those of their
competitors.
A brand is a name, term, symbol, design, or
combination of these that identifies and differentiates a seller's
products from those of competitors. A brand name is any part
of a brand that can be spoken, such as letters (GM, YMCA),
words (Chevrolet), or numbers (WD-40, 7-Eleven). The brand
mark refers to the elements of a brand that cannot be spoken,
such as the well-known Mercedes-Benz and Delta Air Lines
symbols.
10-4c Trademarks
The exclusive right to use a brand or a portion of a brand is defined as a trademark. Others
are not permitted to use the brand without permission. A service mark serves the same
purpose for services like H&R Block and Weight Watchers. Parts of a brand or other product
identification may be protected as trademarks. Some examples are:
Sounds, such as the MGM lion’s roar.
Shapes, such as the Jeep front grille and the Coca-Cola bottle.
Ornamental colors or designs, such as the decoration on Nike tennis shoes, the black-
and-copper color combination of a Duracell battery, Levi’s small tag on the left side of
the rear pocket of its jeans, or the cutoff black cone on the top of Cross pens.
Catchy phrases, such as Prudential’s “Own a Piece of the Rock,” Mountain Dew’s “This
Is How We Dew,” and Nike’s “Just Do It!”
Abbreviations, such as Bud, Coke, or the Met.
The U.S. Patent and Trademark
Office receives an intent-to-use
application. Typically, trademark
protection lasts ten years. To renew the
trademark, the company must
demonstrate that it is still using the
mark. A trademark's rights are valid
for as long as the mark is used.
Normally, if a company does not use a
trademark for two years, it is
considered abandoned, and a new user
can claim exclusive ownership of the
mark.
This law imposes financial penalties on those who violate trademarks or register a
domain name that is otherwise trademarked. A generic product name, which identifies a
product by class or type and cannot be trademarked, identifies it by class or type. Former
brand names that were not adequately protected by their owners
and were later declared generic product names by the U. In order
trademark the exclusive right to use
to reduce the number of trademark infringements, violations are a brand or part of a brand
subject to harsh penalties. Nonetheless, infringement lawsuits are service mark a trademark for a
service
still common, despite the risk of a penalty. generic product name identifies
A French court ruled in Guess' favor in 2015, finding that a product by class or type and cannot
be trademarked
there was no trademark infringement, counterfeiting, or unfair
competition between the two brands. The court determined that Guess diluted, rather than
copied, Gucci's logos. However, an American court ruled that Guess had copied four of Gucci's
five trademarked logos. This example also demonstrates that a global trademark does not
exist.
Companies must also deal with counterfeit or unauthorized brands. Knockoffs of
trademarked clothing lines are common in discount stores around the world, and loose
imitations can also be found in some reputable department stores. Only if your brand, logo,
or trademark is formally registered in Europe can you sue counterfeiters. Previously, formal
registration was required in each country where a company sought protection.
A company, on the other hand, can now register its trademark in all European Union
member countries with a single application.
10-5 PACKAGING
Packages have always served a practical purpose, holding contents together and protecting
goods as they move through the distribution channel. However, packaging is now also used
to promote a product and make it easier and safer to use.
FACILITATING STORAGE, USE, AND CONVENIENCE. Packages that are easy to ship, store, and
stock on shelves are preferred by wholesalers and retailers. They also prefer packages that
protect products, prevent spoilage or breakage, and extend the shelf life of the product.
According to research, difficult-to-open packages are among the most common
complaints among consumers, particularly when it comes to clamshell electronics packaging.
Indeed, Quora users voted clamshell packaging "the worst piece of design ever done," and
there is even a Wikipedia page devoted to "wrap rage," the rage associated with attempting
to open clamshells and other poorly designed packages. As the cost of plastics used in
packaging rises due to rising oil prices, companies such as Amazon, Target, and Walmart are
pressuring suppliers to eliminate unnecessary and
infuriating packaging. Packaging is used by some
businesses to segment markets.
A C&H sugar carton, for example, with an
easy-to-pour, re-closable top is aimed at consumers
who do not bake frequently and are willing to pay at
least 20 cents more for the package.
10-5b Labeling
The label is an essential component of any package.
Labeling can take one of two forms: persuasive or
informational. Consumer information is secondary
in persuasive labeling, which focuses on a promotional theme or logo. It's worth noting
that standard promotional claims like "new," "improved," and "super" are no longer very
persuasive. Informational labeling, by contrast, is designed to help consumers make
proper product selections and lower their cognitive dissonance after the purchase. Most
major furniture manufacturers attach labels to their products that explain the product's
construction features, such as frame type, number of coils, and fabric characteristics. The
Nutritional Labeling and Education Act of 1990 required detailed nutritional information on
most food packages as well as health claim standards on food packaging. Researchers at
Eindhoven University of Technology, Universitá di Catania, CEA-Liten, and STMicroelectronics,
for example, have developed a low-cost plastic converter that tests the safety of packaged
foods.
persuasive labeling a type
GREENWASHING. Greenwashing is used by numerous products of package labeling that focuses on
in every product category to try to sell products. Green a promotional theme or logo, and
consumer information is secondary
certifications proliferated as consumer demand for green
products appeared to rise. The Federal Trade Commission issued new rules in response to
consumer distrust and confusion. Beginning in late 2011, new regulations govern the use of
green-certification logos on products.
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REFERENCES
BOOKS
Principles of Marketing
Charles W. Lamb, Joseph F. Hair, Jr., Carl McDaniel
Marketing: An Introduction
Gary Armstrong, Philip Kotler, Valerie Trifts, & Lilly Anne Buchwitz