Marketing Management  Durability and Tangibility

Professor:Alfredo Toledo Jr.

Prepared by: Bolante,Conde,Ojascastro&Gondraneos Three groups according to durability and tangibility:
1.Nondurable Goods
Module 10-Setting Product Strategy Handouts are tangible goods normally consumed in one or a few
uses,such as beer and shampoo.
2.Durable Goods
Products Characteristics and Classifications
Are tangible goods that normally survive many
Product Levels:The Customer-Value Hierarchy
uses:refrigerator,machine tools, and clothing.
Five Product Levels:
3.Services
1.The fundamental level is the core benefit
Are tangible,inseparable,variable and perishable
-the service or benefit the customer is really buying.A products that normally require more quality control,
hotel guest is buying rest and sleep.The purchaser of a supplier credibility, and adaptability.
drill is buying holes.Marketers must see themselves as
Examples:include haircurts,legal advice and appliance
benefit providers.
repairs.
2.At the second level,the marketer must turn the core
benefit into a basic product.
 Consumer-Goods Classification
-Thus a hotel room includes a bed, bathroom, towels,
desk,dresser and closet. Convenience Goods- consumer usually purchases this
3.At the third level,the marketer prepares an expected frequently,immediately and with minimal effort.
product Example: softdrinks,soaps and newspapers
A set of attributes and conditions buyers normally expect -Impulse Goods are purchased without any planning or
when they purchase this product.Hotel guest minimally search effort
expect a clean bed, fresh towels,working lamps,and -Emergency Goods are purchased when a need is
relative degree of quiet. urgent.
4.At the fourth level,the marketer prepares an Shopping Goods-are those the consumer
augmented product that exceeds customer characteristically compares on such bases as
expectations suitability,quality, price and style.
In developed countries brand positioning and Example:furniture,clothing and major appliances.
competition take place at this level.In developing and -Homogeneous shopping goods differ in product
emerging markets such as India and Brazil, however features and services may be more important than price.
competition takes place mostly at the expected product
-Heterogeneous shopping goods carries a wide
level.
assortment to satisfy individual tastes and trains
5.At the fifth level stands the potential product. salespeople to inform and advise customers.
Which encompasses all the possible augmentation and Specialty Goods have a unique characteristics or brand
transformation the product or offering might undergo in identification for which enough buyers are willing to
the future. make a special purchasing effort.
Product Classifications Example:Cars,audio-video components and men’s suits.

Unsought Goods are those the consumer does not

know about our normally think of buying such as smoke
detectors.It requires advertising and personal-selling
support.
Example:Life Insurance,cemetery plots and
gravestones.

 Industrial-Goods Classification
Materials and parts are goods that enter the
manufacturers product completely
They fall into two classes:
1.Raw Materials
Raw materials fall into two major groups:
-Farm products
are supplied by many producers who turn them over
to marketing intermediaries, who provide
assembly,grading,storage, transportation and selling
services.

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 -Natural Products DURABILITY
are limited in supply,they usually have bulk and low -Durability, a measure of the product’s expected
unit value and must be moved from producer to user. operating life under natural or stressful condition, is a
valued attributes for vehicles, kitchen appliances, and
2.Manufactured materials and parts other durable goods.
Manufactured materials and parts falls into two RELIABILITY
-Buyer normally will pay a premium for more reliable
categories:
products. Reliability is a measure of the probability that a
-Component Materials
product will not malfunction or fail within a specified time
Are usually fabricated further—pig iron is made into period.
steel, and yarn is woven into cloth(iron,yarn,cement REPAIRABILITY
and wires) -Repairability measure the case of fixing the product
-Components Parts when it malfunction or fails.
Enter the finished products with no further change in STYLE
form, as when small motors are out into vacuum -Describe the product’s look and feel to the buyer and
cleaners and tires are put on automobiles.(small creates distinctiveness that is hard to copy.
motors,tires,castings) CUSTOMIZATION
-Customize products and marketing allow firms to be
 Capital Items are long lasting goods that facilitate highly relevant and differentiating by finding out exactly
developing or managing the finished products. what a person wants- and doesn’t want and delivering on
They fall into two groups: that.
-Installation SERVICE DIFFERENTIATION
consists of buildings(factories and offices) and heavy -When the physical product cannot easily be
equipment like generators, drill presses, mainframe, differentiated, the key to competitive success may lie in
adding valued services and improving quality.
computers and elevators.Installation are major
purchases.
POWER OF DESIGN
-Equipment - Design is especially important with long- lasting durable
Includes portable factory equipment and tools and goods such as automobile
office equipment. - Design can shift consumer perceptions to make brand
experiences more rewarding.
 Supplies and Business Services are short term goods APPROACHES TO DESIGN
and services that facilitate developing or managing - Design is more than just creativity, or a phase in
the finished products. creating a product, service, or application. It’s a way of
Supplies are of two kinds: thinking that can transform an entire enterprises. Design
-Maintenance and repair items should penetrate all aspects of marketing program so all
Paint,nails and brooms. design aspect worl together
- Design thinking is a very data driven approach with
three phases; which is
PRODUCT DIFFERENTIATION Observation, ideation, and implementation.
FORM LUXURY PRODUCTS
-Many products can be differentiated in form the size, Design is often an important aspect of luxury products,
shape or physical structure of a product though these products also face some unique
FEATURES issues.They are perhaps one of the purest examples of
-Most product can be offered with varying feature that the role of branding because the brands and its image
supplement their basic function. A company can identify are often key competitive advantage that creates value
and select appropriate new features by surveying recent and wealth.
buyers and then calculating customer value vs company CHARACTERIZING LUXURY BRANDS
cost for each potential features. - Significantly higher price than typical items in their
PERFORMANCE QUALITY categories.
-Most product occupy one of four performance level: - A luxury shopper must feel he or she is getting
low, average, high, and superior. Performance quality is something truly special.
the level at which the product primary characteristics -Sub-Zero Refrigerator
operate. -Patrón tequila
CONFORMANCE QUALITY -Montblanc luxury goods
-Buyers expect a high conformance quality, the degree
to which all produced units are identical and meet GROWING LUXURY BRANDS
promised specifications.

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- The recent recession challenged many luxury brand as similar function, are sold by the same costume group,
they tried to justify their value proposition and avoid are Market by the same outlet or channel, or fall by the
discounting their products given price ranges.
- Those that are already successful extended their brand Product type – A group of items within a product line
vertically across a range of price points were usually the that share one of several possible forms of the product
most immune to economic downturn. Item (also called stock keeping unit or product
- The Armani brand has extended from high-end Giorgio variant) - A distinct unit within a brand or product line
Armani and Giorgio Armani Privé to mid-range luxury distinguishable by size, price, appearance, or some
with Emporio Armani to affordable luxury with Armani other attribute.
Jeans and Armani Exchange. Product System and Mixed
• product System
MARKETING LUXURY BRANDS • product Mix ( also called a product assortment )
- Luxury marketers have learned that luxury is not *Table 13.2
viewed the same way around the world. Product Line Analysis
- In post-communist Russia for time, as in China, the In Offering a product line, companies normally develop a
bigger the gaudier, the logo , the better. But in the end, basic platform and modules that can be added to meet
luxury brand marketers have to remember they are often different customer requirements and lower production
selling a dream, anchored in product quality, status, and costs.
prestige. Sales and profit
- Just like marketers in less expensive categories, those *Figure 13.3
guiding the fortunes of luxury brands operate in a
constantly evolving marketing environment. Market profile and image
- Globalization, new technology, financial crises, shifting The product line manager must review how the line is
consumer culture, and and other forces required them to positioned against competitors' lines.
be skillful and adopt at their brand stewardship to *figure 13.2
succeed. Product map
TABLE 13.1 GUIDELINES FOR MARKETING LUXURY It helps you to understand the features and components
BRANDS of your product, how they interact with each other, and
whether they work together as a system.
Setting product management *Figure 13.4
Environmental issues Product Line length
-Environmental issues are also playing an increasingly Company objectives influence product line length.
important role in product design and manufacturing. Line stretching
Many firms are considering ways to reduce the negative Every company product line covers a certain part of the
environmental consequences of conducting business, total possible range.
and some are changing the manufacture of their Down Market Stretch a company positioned in the
products or the ingredients that go into them. “ middle market may want to introduce a lower price line
Levis waste for any of three (3) reasons
A fascinating twist, Levi Strauss found a highly creative 1.The company may notice strong growth opportunity
way to address the problem of proliferating plastic 2.The company may wish to tie up lower- end
bottles competitors who might otherwise try to move up market
Market memo: A Sip or a Gulp 3.The company may find the middle market stagnating or
Gulp: Environmental Concerns in the Water Industry” declining
considers some of the environmental issues raised by
the sale of bottled water Markets face a number of naming choices in
Product and brand relationship deciding to move a brand down- market
The association or connection between a brand and its 1.Use the parent brand name on all it’s offering
products or services. 2.Introduce lower priced offering using a sub brand
THE PRODUCT HIERARCHY name
We can identify six (6) levels of the product hierarchy, 3.Introduce the lower priced offering under a different
using life insurance as an example name
Nedd Family – the core need that underlies the Two-way stretch
existence of a product family Extending product line upward and downward to address
Product Family – all the product classes that can different of the market
satisfied a core need with reasonable effectiveness
Product class – a group of product within the product Line filling
family recognize of having a certain functional Companies may wish to enter the high end of the market
coherence, also known as product category, for more growth, higher margins, or simply to position
Product line – A group of product within a product themselves as full-line manufacturers.
class that are closely related because they perform a
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 PRODUCT MIX PRICING confidence.
Marketers must modify their price-setting logic when the
product is part of a product mix. In product mie petcing, 4. A coordinated "poll" and "push" program must help
the firm searches for a set of prices that maximizes consumers understand the advantages of the branded
profits on the total mix. imgredient. Channel members must offer full support
PRODUCT LINE PRICING Companies normally develop such as consumer advertising and promotions and
product lines rather than single products, so they sometimes in collaboration with marnufacturers retail
introduce price steps. A men's clothing store might carry merchandising and promotion programs
men's suits at three price levels $300, $600, and 5900
which customers associate with low, average, and high Packaging, Labeling, Warranties, and Guarantee
quality. The seller's task is to establish perceived quality Some product packages-such as the Coke bottle and
differences that justify the price differences Red Bull can-are world famous. Many marketers have
OPTIONAL-FEATURE PRICING Many companies offer called packaging a fifth P, along with price, product,
optional products, features, and services with their main place, and promotion. Most, however, treut packaging
product. and labeling as an element of product strategy.
CAPTIVE-PRODUCT PRICING Some products require Warranties and guarantees can also be an important
the use of ancillary or captive products. part of the product strategy and often appear on the
TWO-PART PRICING Service firms engage in two-part package.
pricing, consisting of a fixed fee plus a variable usage tre PACKAGING
Cell phone users may have to pay a minimum monthly -Packaging refers to the materials and processes used
fee plus charges for calls that exceed their allotted to enclose and protect products for distribution, storage,
minutes. sale, and use.
BY-PRODUCT PRICING The production of certain -Packaging is important because it is the buyer's first
goods-meats, petroleum products, and other chemicals encounter with the product. A good package draws the
often yields by-products that should be priced on their consumer in and encourages product choice. Some
value. packages can even be attractively .
PRODUCT-BUNDLING PRICING -Sellers often bundle Several factors contribute to the growing use of
products and features Pure bundling occurs when a packaging as a marketing tool.
firm offers its products only as a bundle. Providers of Self-service -In an average supermarket, which may
aftermarket products for automobiles increasingly are stock 15,000 items, the typical shopper passes some
bundling their offerings in customizable three-in-one and 300 products per minute. Given that 50 percent to 70
four-in-one programs. percent of all purchases are made in the store, the
In mixed bundling, the seller offers goods both effective package must perform many sales tasks: attract
individually and in bundles, normally charging less for describe the product's features, create consumer
the bundle than if the items were purchased separately. confidence, and make a favorable overall impression.
A theater will price a season subscription lower than the Consumer affluence- Rising affluence means
cost of buying all the performances separately. consumers are willing to pay a little more for the
CO-BRANDING AND INGREDIENT BRANDING convenience, appearance, dependability, and prestige of
CO-BRANDING Marketers often combine their products better packages.
with products from other companies in various ways. In Company and Brand Image -Packages contribute to
co-branding-also called dual branding or brand bundling- instant recognition of the company or brand. In the store,
two or more well-known brands are combined into a joint they can create a billboard effect, as Garnier Fructis
product or marketed together in some fashion. does with its bright green packaging in the hair care
aisle.
WHAT ARE THE REQUIREMENTS FOR Innovation and Opportunity -Unique or innovative
SUCCESSFUL INGREDIENG BRANDING? packaging can bring big benefits to consumers and
profits to producers. Companies are always looking for a
1. Consumers must believe the migredient matters to the way to make their products more convenient and easier
performance and success of the end product. Ideally this to use-often charging a premium when they do so.
intrinsic value is easily seen or experienced. Formally, packaging must achieve of its objectives:
1. Identify the brand.
2. Cosumers must be convinced that not all ingredient 2. Convey descriptive and persuasive information.
brands are the same and that the ingredient is superior 3. Facilitate product transportation and protection.
4. Assist at-home storage.
5. Aid product consumption.
3. A distinctive symbol or logo must clearly signal that
the host product contains the ingredient. Ideally, this
The Color Wheel of Branding and Packaging
symbol or logo functions like a "seal" and is simple and
Red- symbolizes excitement, energy, passion, courage,
versatile, credibly communicating quality and
and being bold

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Orange- connoties friendliness and fun. It combines the
energy of red and the warmth of yellow
Yellow- as the color of the sun, is equated with warmth,
joy, and happiness
Green-as the color of nature, connotes health, growth,
freshness and renewal.
Blue- as the color of the sky and sea, is associated with
dependability, trust, competence, and integrity
Purple- has symbolized nobility, wealth, and wisdom. It
combines the stability of blue and the energy of red
Pink - is considered to have soft, praceful, comforting
qualities
Brown - as the color of the earth, connotes honesty and
dependability,
Black - is seen as classic, strong, and balanced
White - connotes purity, innocence, and cleanliness

LABELING

:The label can be a simple attached tag or an elaborately

designed graphic that is part of the package. It might
carry a great deal of information, or only the brand name.

WARRANTIES AND GUARANTEES

sellers are legally responsible for fulfilling a buyer's
normal or trasonable expectations. Warranties are formal
statements of expected product performance by the
manufacturer. Products under warranty can be returned
to the manufacturer or designated repair center for
repair, replacement, or refund.