MODULE 10

SETTING
PRODUCT
STRATEGY
Bolante,Rygina Mae Conde,Ariane Mae Gondraneos,Daniel Ojascastro,Rica

REPORTERS OF MODULE 10
PRODUCT CHARACTERISTICS
AND CL ASSIFICATIONS

Five product levels;

The Customer-Value
Hierarchy
 FIVE PRODUCT LEVELS
1.The fundamental level is the core benefit
2.At the second level,the marketer must turn the core
benefit into a basic product.
3.At the third level,the marketer prepares an expected
product
4.At the fourth level,the marketer prepares an augmented
product that exceeds customer expectations
5.At the fifth level stands the potential product.
PRODUCT CL ASSIFICATION
Durability and Tangibility
Three groups according to durability and tangibility:
1.Nondurable Goods
-are tangible goods normally consumed in one or a few uses,such as beer and
shampoo.
2.Durable Goods
-are tangible goods that normally survive many uses:refrigerator,machine tools,
and clothing.
3.Services
-are tangible,inseparable,variable and perishable products that normally require
more qualitycontrol, supplier credibility, and adaptability.
Examples:include haircurts,legal advice and appliance repairs.
PRODUCT CL ASSIFICATION
Consumer-Goods Classification
Convenience Goods
-consumer usually purchases this frequently,immediately
and with minimal effort.
Example: softdrinks,soaps and newspapers
-Impulse Goods are purchased without any planning or
search effort
-Emergency Goods are purchased when a need is urgent.
Umbrellas in a rainstorm,boots and shovels during the
first winter snow.
PRODUCT CL ASSIFICATION
Consumer-Goods Classification
Shopping Goods
-are those the consumer characteristically compares on
such bases as suitability,quality, price and style.
Example:furniture,clothing and major appliances.
-Homogeneous shopping goods differ in product features
and services may be more important than price.
-Heterogeneous shopping goods carries a wide
assortment to satisfy individual tastes and trains
salespeople to inform and advise customers.
PRODUCT CL ASSIFICATION
Consumer-Goods Classification

Specialty Goods
- have a unique characteristics or brand
identification for which enough buyers are willing
to make a special purchasing effort.
Example:Cars,audio-video components and men’s
suits.
PRODUCT CL ASSIFICATION
Consumer-Goods Classification

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.
PRODUCT CL ASSIFICATION
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.
-Natural Products
are limited in supply,they usually have bulk and low unit value and must be
moved from producer to user.
PRODUCT CL ASSIFICATION
Industrial-Goods Classification
2.Manufactured materials and parts
Manufactured materials and parts falls into two categories:
-Component Materials
Are usually fabricated further—pig iron is made into steel, and
yarn is woven into cloth(iron,yarn,cement and wires)
-Components Parts
Enter the finished products with no further change in form, as
when small motors are out into vacuum cleaners and tires are put
on automobiles.(small motors,tires,castings)
PRODUCT CL ASSIFICATION
Industrial-Goods Classification
Capital Items
-are long lasting goods that facilitate developing or managing the
finished products.
They fall into two groups:
-Installation
consists of buildings(factories and offices) and heavy equipment
like generators, drill presses, mainframe, computers and
elevators.Installation are major purchases.
-Equipment
Includes portable factory equipment and tools and office
PRODUCT CL ASSIFICATION
Industrial-Goods Classification
Supplies and Business Services are short term goods and services that facilitate
developing or managing the finished products.
Supplies are of two kinds:
-Maintenance and repair items
Paint,nails and brooms.
-Operating Supplies
Lubricants,coal,writing papers,pencils
Business Services
-Maintenance and Repair Services
Window cleaning,copier,repair
-Business advisory services
Legal management consulting,advertising
DIFFERENTATION

Product Differentiation Service

Differentiation
-Form -Power of Design
-Features -Approaches to Design
-Performance Quality
-Conformance Quality
-Durability
-Realiability
-Repairability
-Style
-Customization
 Product Differentiation
FORM
-Many products can be differentiated in form the size, shape or physical structure of
a product
FEATURES
-Most product can be offered with varying feature that supplement their basic
function. A company can identify and select appropriate new features by surveying
recent buyers and then calculating customer value vs company cost for each
potential features.
PERFORMANCE QUALITY
-Most product occupy one of four performance level: low, average, high, and
superior. Performance quality is the level at which the product primary
characteristics operate.
CONFORMANCE QUALITY
• Buyers expect a high conformance quality, the degree to which all produced units
are identical and meet promised specifications.
 Product Differentiation
DURABILITY
-Durability, a measure of the product’s expected operating life under natural or stressful
condition, is a valued attributes for vehicles, kitchen appliances, and other durable
goods.
RELIABILITY
-Buyer normally will pay a premium for more reliable products. Reliability is a measure of
the probability that a product will not malfunction or fail within a specified time period.
REPAIRABILITY
-Repairability measure the case of fixing the product when it malfunction or fails.
STYLE
-Describe the product’s look and feel to the buyer and creates distinctiveness that is hard
to copy.
CUSTOMIZATION
-Customize products and marketing allow firms to be highly relevant and differentiating
by finding out exactly what a person wants- and doesn’t want and delivering on that.
 Service Differentiation
-When the physical product cannot easily be differentiated, the key to
competitive success may lie in adding valued services and improving quality.
POWER OF DESIGN
- Design is especially important with long- lasting durable goods such as
automobile
- Design can shift consumer perceptions to make brand experiences more
rewarding.

APPROACHES TO DESIGN
- Design is more than just creativity, or a phase in creating a product, service, or
application. It’s a way of thinking that can transform an entire enterprises.
Design should penetrate all aspects of marketing program so all design aspect
world together
- Design thinking is a very data driven approach with three phases; which is
Luxury Products
-Design is often an important aspect of luxury products, though these
products also face some unique issues.They are perhaps one of the
purest examples of the role of branding because the brands and its
image are often key competitive advantage that creates value and
wealth.
Characterizing Luxury Brands
- Significantly higher price than typical items in their categories.
- A luxury shopper must feel he or she is getting something truly
special.
-Sub-Zero Refrigerator
-Patrón tequila
-Montblanc luxury goods
 GROWING LUXURY BRANDS
- The recent recession challenged many luxury brand as
they tried to justify their value proposition and avoid
discounting their products
- Those that are already successful extended their brand
vertically across a range of price points were usually the
most immune to economic downturn.
- The Armani brand has extended from high-end Giorgio
Armani and Giorgio Armani Privé to mid-range luxury with
Emporio Armani to affordable luxury with Armani Jeans and
Armani Exchange.
 MARKETING LUXURY BRANDS
- Luxury marketers have learned that luxury is not viewed the same
way around the world.
- In post-communist Russia for time, as in China, the bigger the gaudier,
the logo , the better. But in the end, luxury brand marketers have to
remember they are often selling a dream, anchored in product quality,
status, and prestige.
- Just like marketers in less expensive categories, those guiding the
fortunes of luxury brands operate in a constantly evolving marketing
environment.
- Globalization, new technology, financial crises, shifting consumer
culture, and and other forces required them to be skillful and adopt at
their brand stewardship to succeed.
SETTING PRODUCT MANAGEMENT
*Video

ENVIRONMENTAL ISSUES
-Environmental issues are also playing an increasingly
important role in product design and manufacturing. Many
firms are considering ways to reduce the negative
environmental consequences of conducting business, and
some are changing the manufacture of their products or the
ingredients that go into them. “
*Video
LEVIS WASTE
-A fascinating twist, Levi Strauss found a highly creative way to
address the problem of proliferating plastic bottles.

Market memo: A Sip or a Gulp

Gulp: Environmental Concerns in the Water Industry” considers
some of the environmental issues raised by the sale of bottled
water

PRODUCT AND BRAND REL ATIONSHIP

-The association or connection between a brand and its
products or services.
THE PRODUCT HIERARCHY
We can identify six (6) levels of the product hierarchy, using life insurance as an
example
Need Family – the core need that underlies the existence of a product family
Product Family – all the product classes that can satisfied a core need with
reasonable effectiveness
Product class – a group of product within the product family recognize of having a
certain functional coherence, also known as product category,
Product line – A group of product within a product class that are closely related
because they perform a similar function, are sold by the same costume group, are
Market by the same outlet or channel, or fall by the given price ranges.
Product type – A group of items within a product line that share one of several
possible forms of the product
Item (also called stock keeping unit or product variant) - A distinct unit within a
brand or product line distinguishable by size, price, appearance, or some other
attribute.
PRODUCT SYSTEM AND MIXED
-product System
-product Mix ( also called a product
assortment )
PRODUCT LINE ANALYSIS
-In Offering a product line, companies normally develop a
basic platform and modules that can be added to meet
different customer requirements and lower production
costs.
SALES AND PROFIT
MARKET PROFILE AND IMAGE
-The product line manager must review how the
line is positioned against competitors' lines.
PRODUCT MAP
-It helps you to understand the features and components of your
product, how they interact with each other, and whether they work
together as a system.
PRODUCT LINE LENGTH
-Company objectives influence product line
length.
LINE STRETCHING
-Every company product line covers a
certain part of the total possible range.
 DOWN MARKET STRETCH
-a company positioned in the middle market
may want to introduce a lower price line for
any of three (3) reasons
• The company may notice strong growth
opportunity
• The company may wish to tie up lower- end
competitors who might otherwise try to move up
market
• The company may find the middle market
MARKETS FACE A NUMBER OF NAMING CHOICES IN
DECIDING TO MOVE A BRAND DOWN- MARKET
• Use the parent brand name on all it’s offering
• Introduce lower priced offering using a sub brand
name
• Introduce the lower priced offering under a
different name

TWO -WAY STRETCH

-Extending product line upward and downward to
address different of the market
LINE FILLING
-Companies may wish to enter the high end
of the market for more growth, higher
margins, or simply to position themselves as
full-line manufacturers.

*Video
LINE MODERNIZATION,FEATURING AND PRUNING
PRODUCT MIX PRICING
-Marketers must modify their price-setting logic
when the product is part of a product mix. In product
mie petcing, the firm searches for a set of prices
that maximizes profits on the total mix.

PRODUCT LINE PRICING

Companies normally develop product lines rather than single
products, so they introduce price steps. A men's clothing store
might carry men's suits at three price levels $300, $600, and
5900 which customers associate with low, average, and high
quality.
OPTIONAL-FEATURE PRICING
Many companies offer optional products,
features, and services with their main product.

CAPTIVE-PRODUCT PRICING
Some products require the use of ancillary or
captive products.
TWO -PART PRICING
Service firms engage in two-part pricing,
consisting of a fixed fee plus a variable usage
tre Cell phone users may have to pay a
minimum monthly fee plus charges for calls that
exceed their allotted minutes.
BY-PRODUCT PRICING
The production of certain goods-meats, petroleum
products, and other chemicals often yields by-
products that should be priced on their value.
PRODUCT-BUNDLING PRICING
Sellers often bundle products and features
-Pure bundling occurs when a firm offers its
products only as a bundle. Providers of aftermarket
products for automobiles increasingly are bundling
their offerings in customizable three-in-one and
-mixed bundling,
four-in-one the seller offers goods both
programs.
individually and in bundles, normally charging less
for the bundle than if the items were purchased
separately.
CO -BRANDING AND INGREDIENT BRANDING

CO-BRANDING Marketers often combine their

products with products from other companies
in various ways. In co-branding also called
dual branding or brand bundling two or more
well-known brands are combined into a joint
product or marketed together in some
fashion.
PACKAGING, L ABELING, WARRANTIES,
AND GUARANTEES
Some product packages-such as the Coke bottle
and Red Bull can-are world famous. Many
marketers have called packaging a fifth P, along
with price, product, place, and promotion. Most,
however, treut packaging and labeling as an
element of product strategy. Warranties and
guarantees can also be an important part of the
product strategy and often appear on the package.
PACKAGING
-Packaging refers to the materials and processes
used to enclose and protect products for
distribution, storage, sale, and use.
-Packaging is important because it is the buyer's
first encounter with the product. A good package
draws the consumer in and encourages product
choice. Some packages can even be attractively .
SEVERAL FACTORS CONTRIBUTE TO THE GROWING
USE OF PACKAGING AS A MARKETING TOOL.
Self-service -In an average supermarket, which may stock 15,000
items, the typical shopper passes some 300 products per minute.
Given that 50 percent to 70 percent of all purchases are made in
the store, the effective package must perform many sales tasks:
attract describe the product's features, create consumer
confidence, and make a favorable overall impression.

Consumer affluence- Rising affluence means consumers are willing

to pay a little more for the convenience, appearance,
dependability, and prestige of better packages.
SEVERAL FACTORS CONTRIBUTE TO THE GROWING
USE OF PACKAGING AS A MARKETING TOOL.
Company and Brand Image-Packages contribute to instant
recognition of the company or brand. In the store, they can
create a billboard effect, as Garnier Fructis does with its bright
green packaging in the hair care aisle.

Innovation and Opportunity-Unique or innovative packaging

can bring big benefits to consumers and profits to producers.
Companies are always looking for a way to make their
products more convenient and easier to use-often charging a
premium when they do so.
FORMALLY, PACKAGING MUST ACHIEVE
OF ITS OBJECTIVES:

1. Identify the brand.

2. Convey descriptive and persuasive
information.
3. Facilitate product transportation and
protection.
4. Assist at-home storage.
5. Aid product consumption.
THE COLOR WHEEL OF BRANDING AND PACKAGING
Red- symbolizes excitement, energy, passion, courage, and being bold
Orange- connotes 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
L ABELING
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.
PREPARED BY:MS.BOLANTE

THANK YO
MARCH 2024