Chapter Nine
ELEMENTS OF PRODUCT PLANNING FOR GOODS AND SERVICES
PRODUCT AREA INVOLVES MANY STRATEGY DECISIONS
Customers buy satisfaction, not “products”
Products -- means “need satisfying offerings” of a firm (See exhibit 9-1, page 243)
Quality is important -- that is, products ability to satisfy a customers needs or requirements.
DIFFERENCES IN GOODS AND SERVICES
Good: is physical. Service: is deed performed. (Most goods are “combination of both)
Goods: produced, then sold. Service: sold, then produced
See Exhibit 9-2, page 245
WHOLE PRODUCT LINES MUST BE DEVELOPED
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Product assortment: set of all product lines and individual products |
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Product line: set of products, closely related |
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Individual product: particular product within a product line |
PRODUCT CLASSES HELP PLAN MARKETING STRATEGIES
I. Consumer Products (See exhibit 9-3, page 248)
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Convenience: not much time/little service/little cost/staple, impulse, emergency type goods |
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Shopping: spend time/homogenous, heterogeneous goods |
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Specialty: special effort/insist on brand |
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Unsought: need promotion/new unsought, regularly unsought goods |
II. Business Products
See exhibit 9-4, page 252
BRANDING NEEDS STRATEGY DECISION TOO
Branding: Use of name, term, symbol, or design, or combination to identify product
Brand name: Word, letter, or group
Trademark: Words, symbols, marks, that are legally registered (See exhibit 9-5, page 255)
BRANDING -- WHY IT DEVELOPED
Formed during the middle ages to control quantity/quality of production
Makes customer shopping easier
Can improve a company's image
CONDITIONS FAVORABLE TO BRANDING (6)
1) Product is easy to identify
2) Best value for the price
3) Dependable, widespread availability
4) Demand is strong
5) Economies of scale exist
6) Favorable shelf locations
ACHIEVING BRAND FAMILIARITY IS NOT EASY
Five levels:
1. Rejection
2. Non recognition
3. Recognition
4. Brand preference
5. Brand insistence
Characteristics of a good brand name
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Short/simple |
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Easy to spell/read |
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Easy to pronounce |
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Suggestive of product benefits |
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Adaptive to packaging/labeling |
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Not obscene · Pronounced in only one way |
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Pronounced in all languages |
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Applicable to advertising medium |
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Legally available |
PROTECTING BRAND NAMES AND TRADEMARKS
Lanham Act: Specifies kinds of marks that can be protected and method of protecting them
Must try to protect brand name -- counterfeiting is prevalent in some foreign
countries
WHAT KIND OF BRAND TO USE?
Family brand: Same brand name for several products.
Individual brand: When it is important for each product to have a separate I.D.
Generic brands: Products that have no brand at all
WHO SHOULD DO BRANDING?
Manufacturer brands -- created by manufacturer
Dealer brands -- created by middlemen
Manufacturer brands
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Presold |
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Lower gross margin |
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More control |
Dealer brands
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More responsibility |
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Provides more shelf space |
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In battle of brands, dealer brands may be winning |
THE STRATEGIC IMPORTANCE OF PACKAGING
Good packaging makes product easier to identify and promotes brand at point of purchase
Packaging can:
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Improve product |
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Send message |
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Reduce storage costs |
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Improve handling, etc. |
SOCIALLY RESPONSIBLE PACKAGING
Federal Fair Packaging and Labeling Act:
Products must be clearly labeled/easy to understand/provide nutrition information
Environmental issues are concern.
Next Steps: Please review the PowerPoint Overview slides (1-13) for this chapter. Then proceed to the Lecture Notes for chapter ten.
