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Setting Product Strategy Marketing Management, chapter 12 Prepared by: Volkan ÜLKE Prof. : Teoman Setting Product Strategy Marketing Management, chapter 12 Prepared by: Volkan ÜLKE Prof. : Teoman DUMAN

What is a Product? A product is anything that can be offered to a What is a Product? A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

Figure 12. 1 Components of the Market Offering Value-based prices Attractiveness of the market Figure 12. 1 Components of the Market Offering Value-based prices Attractiveness of the market offering Product features and quality Services mix and quality

Figure 12. 2 Five Product Levels Figure 12. 2 Five Product Levels

Product Classification Schemes Durability Tangibility Use Product Classification Schemes Durability Tangibility Use

Durability and Tangibility Nondurable goods Durable goods Services Durability and Tangibility Nondurable goods Durable goods Services

Consumer Goods Classification Convenience Shopping Specialty Unsought Consumer Goods Classification Convenience Shopping Specialty Unsought

Industrial Goods Classification • Materials and parts • Capital items • Supplies/business services Industrial Goods Classification • Materials and parts • Capital items • Supplies/business services

Product Differentiation • • • Product form Features Customization Performance Conformance Durability Reliability Repairability Product Differentiation • • • Product form Features Customization Performance Conformance Durability Reliability Repairability Style

Service Differentiation Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair • Service Differentiation Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair • Returns • • •

Design Differentiation Design Differentiation

Maintenance and Repair Maintenance and Repair

The Product Hierarchy Item Product type Product line Product class Product family Need family The Product Hierarchy Item Product type Product line Product class Product family Need family Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 12 -13

Product Systems and Mixes • • Product system Product mix Product assortment Depth Length Product Systems and Mixes • • Product system Product mix Product assortment Depth Length Width Consistency

Product-Mix Width and Product-Line Length for Proctor& Gamble Products Product-Mix Width Disposable Bar Soap Product-Mix Width and Product-Line Length for Proctor& Gamble Products Product-Mix Width Disposable Bar Soap Diapers Paper Tissue Ivory (1879) Pampers (1961) Charmin (1928) PRODUCT- Dreft LINE (1933) LENGTH Kirk’s (1885) Luvs (1976) Puffs (1960) Tide (1946) Lava (1893) Banner (1982) Cheer (1950) Camay (1926) Summit (1992) Detergents Toothpaste Ivory Snow Gleem (1952) (1930) Crest (1955)

Product Line Analysis • • Core product Staples Specialties Convenience items Product Line Analysis • • Core product Staples Specialties Convenience items

Line Stretching Down-Market Stretch Up-Market Stretch Two-Way Stretch Line Stretching Down-Market Stretch Up-Market Stretch Two-Way Stretch

Two-Way Product-Line Stretch: Marriott Hotels Economy Quality Standard Good Marriott Marquis (Top executives) Price Two-Way Product-Line Stretch: Marriott Hotels Economy Quality Standard Good Marriott Marquis (Top executives) Price High Marriott (Middle managers) Above average Average Fairfield Inn Low (Vacationers) Superior Courtyard (Salespeople)

Product Line Pricing Product Line Pricing

Product-Mix Pricing • • • Product-line pricing Optional-feature pricing Captive-product pricing Two-part pricing By-product Product-Mix Pricing • • • Product-line pricing Optional-feature pricing Captive-product pricing Two-part pricing By-product pricing Product-bundling pricing

What is the Fifth P? Packaging, sometimes called the fifth P, is all the What is the Fifth P? Packaging, sometimes called the fifth P, is all the activities of designing and producing the container for a product.

Factors Contributing to the Emphasis on Packaging Self-service Consumer affluence Company/brand image Innovation opportunity Factors Contributing to the Emphasis on Packaging Self-service Consumer affluence Company/brand image Innovation opportunity

Packaging Objectives • Identify the brand • Convey descriptive and persuasive information • Facilitate Packaging Objectives • Identify the brand • Convey descriptive and persuasive information • Facilitate product transportation and protection • Assist at-home storage • Aid product consumption

Functions of Labels Identifies Grades Describes Promotes Functions of Labels Identifies Grades Describes Promotes

Warranties and Guarantees Warranties and Guarantees