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Product Concepts: Smitu Malhotra

1. The document discusses key concepts related to products including the product hierarchy, product differentiation, product lines and mixes. It defines products as the core of the marketing mix and discusses how customers purchase expected benefits rather than tangible goods. 2. Product levels including core, basic, expected, augmented and potential benefits are examined. Characteristics differentiating goods and services are outlined, with services noted as intangible, simultaneously produced and consumed, heterogeneous and perishable. 3. The concepts of product lines, width, length and depth are defined in building an effective product mix. Factors influencing consumer decisions are listed along with classifications of consumer products.

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Tanushree Piplani
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42 views36 pages

Product Concepts: Smitu Malhotra

1. The document discusses key concepts related to products including the product hierarchy, product differentiation, product lines and mixes. It defines products as the core of the marketing mix and discusses how customers purchase expected benefits rather than tangible goods. 2. Product levels including core, basic, expected, augmented and potential benefits are examined. Characteristics differentiating goods and services are outlined, with services noted as intangible, simultaneously produced and consumed, heterogeneous and perishable. 3. The concepts of product lines, width, length and depth are defined in building an effective product mix. Factors influencing consumer decisions are listed along with classifications of consumer products.

Uploaded by

Tanushree Piplani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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1

PRODUCT CONCEPTS
SMITU MALHOTRA

What is a Product?
2

Product
is
the heart of
Marketing
Mix
Price

Promotion

Place (Distribution)

CONCEPT OF A PRODUCT
3

PEOPLE DONT BUY PRODUCTS THEY


BUY THE EXPECTATION OF A BENEFIT
Levitt

Cor
e
Basic Product
Expected
Augmented
Potential
Product Hierarchy Levels Theodore Levitt

Product Levels
Customer Value Hierarchy
Core benefit: the benefit the customer buys
Basic product: provides the core benefit
Expected product: attributes that customers

normally expect with the product


Augmented product: features / benefits

beyond what is expected


Potential product: anything possible for the

future to satisfy the customer

Product Augmentation
Each augmentation adds cost
Augmented benefits soon become

expected and necessary point-of-parity


Competition offers stripped down

versions
Competition level and competitive

strategies depend upon PLC stage

PRODUCT VS SERVICES
7

HOW ARE THEY DIFFERENT ?

Goods and Services: Scale of


Elemental Dominance

4 Characteristics of Services
1. Intangibility - u cant touch this
2. Production (or performing the service)
and Consumption (using the service) happens at the same time
3. Heterogeneity - services are not
always delivered the same way

4. Perishability - cannot be put in


inventory or stored for later use
ie. You cant buy 2 haircuts
9

THREE MORE Ps
10

PEOPLE
PROCESSESS
PHYSICAL EVIDENCE

CONCEPT OF PRODUCT MIX


11

PRODUCT LINE
PRODUCT WIDTH
PRODUCT DEPTH

PRODUCT MIX
12

Consistency

Width
Width--number
numberof
of
different
differentproduct
productlines
lines

Length
Length--total
totalnumber
numberof
of
items
items
within
withinthe
thelines
lines
Depth
Depth--number
numberof
of
versions
versionsof
ofeach
each
product
product

Product
ProductMix
Mix-all
allthe
theproduct
product
lines
linesoffered
offered

13

Product Items, Lines, and


Mixes
Product
Product Item
Item

A
A specific
specific version
version of
of aa product
product
that
that can
can be
be designated
designated as
as aa
distinct
distinct offering
offering among
among an
an
organizations
organizations products.
products.

Product
Product Line
Line

A
A group
group of
of closely-related
closely-related
product
product items.
items.

Product
Product Mix
Mix

All
All products
products that
that an
an
organization
organization sells.
sells.

Benefits of Product Lines


14

Advertising
Advertising Economies
Economies
Package
Package Uniformity
Uniformity
Why
WhyForm
Form
Product
ProductLines?
Lines?

Standardized
Standardized
Components
Components
Efficient
Efficient Sales
Sales and
and
Distribution
Distribution
Equivalent
Equivalent Quality
Quality

Product Mix Width

15

The number of product lines an organization


offers.

Diversifies risk
Capitalizes on established reputations

Product Line Depth

16

The number of product items in a product line.

Attracts buyers with different preferences


Increases sales/profits by further
market segmentation
Capitalizes on economies of scale
Evens out seasonal sales patterns

17

PRODUCT
CLASSIFICATION
SMITU MALHOTRA

PRODUCT: CLASSIFICATION
18

Degree of Tangibility/Durability
Nondurable good -- an item consumed in one or
a few uses.
Durable good -- one that usually lasts for an
extended number of uses.
Type of User
Consumer goods -- products purchased by the
ultimate consumer.
Industrial goods -- products used in the
production of other products for ultimate
consumers.

19

Five Factors influencing


Decisions
1. Level of consumer involvement
2. Length of time to make decision
3. Cost of good or service
4. Degree of information search
5. Number of alternatives considered

Types of Consumer Products


20

Convenience
Convenience
Product
Product

AArelatively
relativelyinexpensive
inexpensiveitem
itemthat
that
merits
meritslittle
littleshopping
shoppingeffort.
effort.

Shopping
Shopping
Product
Product

AAproduct
productthat
thatrequires
requirescomparison
comparison
shopping,
shopping,because
becauseititis
isusually
usuallymore
more
expensive
expensiveand
andfound
foundin
infewer
fewerstores.
stores.

Specialty
Specialty
Product
Product

AAparticular
particularitem
itemthat
thatconsumers
consumers
search
searchextensively
extensivelyfor
forand
andare
are
reluctant
reluctantto
toaccept
acceptsubstitutes.
substitutes.

Unsought
Unsought
Product
Product

AAproduct
productunknown
unknownto
tothe
thepotential
potential
buyer
buyeror
oraaknown
knownproduct
productthat
thatthe
the
buyer
buyerdoes
doesnot
notactively
activelyseek.
seek.

BRANDS
A BRIEF OVERVIEW

History of brands
Means to burn

Mark of trust

22

Brand: name, term, sign, symbol, or design


intended to identify the products or services and
to differentiate them from the products offered by
competitors.
Brand: a psychological concept (or set of
associations)
Brand(ing): The art of taking something
common and improving on it in ways that make it
more valuable and meaningful.

23

WHY BOTHER WITH BRANDING?

24

Customers viewpoint

Authenticates the source of goods and


promises value
Reduces risks
Functional
Physical
Financial
Social
Time

25

Firms viewpoint

Differentiates the product


Creates barriers to entry
Simplifies product handling ,
inventory management
Brand building decreases customer
sensitivity to price
Brand loyalty assures demand for
the product
Speeds up process of decision
making
26

Classification

Functional brands superior economy


and/or superior performance
Example

Gillette razors
Ariel and tide
McDonalds
Dell Computers

27

Image brands offer unique set of


associations
Example

Colas
Cigarettes
Parker pens
Nike shoes
Lux

28

Experiential Brands focus on how


consumers feel when interacting with
the brand
Example

Disney
Barista , CCD
PVR cinemas

29

Branding strategy

No brand
Corporate brand
Family brand
Individual brand
Private brands vs Manufacturers brand

Can anything be branded?


30

31

32

An Overview of
Branding Decisions
Branding
Decision

Brand
No brand

BrandSponsor
Decision

BrandName
Decision

BrandBrandStrategy Repositioning
Decision
Decision

Manufacturer
brand

Individual
brand
names
Blanket
family
name
Separate
family
names
Companyindividual
names

Line
extension
Brand
extension
Multibrands
New
brands
Cobrands

Distributor
(private)
brand
Licensed
brand

Repositioning
No
repositioning

Brand Strategies
Product Category
Brand Name

Existing
Existing

New

New

Line
Extensionlays chips,Zen

Brand
Extension-Dettol

MultibrandsHUL soaps

New
Brands- Sunfeast

Brand Image

The set of beliefs about a brand (Kotler)

The set of associations tangible /


functional + soft attributes, product
category, corporate parentage, user
profile (Alex Biel)

Sum of all impressions + perceptions


features, benefits, packaging, user
profile, advertising, events etc

Brand Personality

Correspond to user personalities (Kotler)

The brand as a person symbols,


endorsers, lifestyles, types of users

Sub-set of brand image emotional,


intangible factors created mainly through
advertising; brands take on human
characteristics

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