Customers buy satisfaction, not “products”

Products -- means “need satisfying offerings” of a firm

Quality is important -- that is, products ability to satisfy a customers needs or requirements.
 

Good: is physical. Service: is deed performed. (Most goods are “combination of both)

Goods: produced, then sold. Service: sold, then produced
 

• Product assortment: set of all product lines and individual products
• Product line: set of products, closely related
• Individual product: particular product within a product line

I. Consumer Products (See exhibit 9-3)

• Convenience: not much time/little service/little cost/staple, impulse, emergency type goods
• Shopping: spend time/homogenous, heterogeneous goods
• Specialty: special effort/insist on brand
• Unsought: need promotion/new unsought, regularly unsought goods

See exhibit 9-4
 

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)
 

Formed during the middle ages to control quantity/quality of production

Makes customer shopping easier

Can improve a company's image
 

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
 
 

Five levels:

1. Rejection

2. Non recognition

3. Recognition

4. Brand preference

5. Brand insistence

• Short/simple
• Easy to spell/read
• Easy to pronounce
• Suggestive of product benefits
• Adaptive to packaging/labeling
• Not obscene · Pronounced in only one way
• Pronounced in all languages
• Applicable to advertising medium
• Legally available

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
 

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
 

Manufacturer brands -- created by manufacturer

Dealer brands -- created by middlemen

Manufacturer brands

· Presold

· Lower gross margin

· More control

· More responsibility

· Provides more shelf space

· In battle of brands, dealer brands may be winning
 
 

Good packaging makes product easier to identify and promotes brand at point of purchase

Packaging can:

· Improve product

· Send message

· Reduce storage costs

· Improve handling, etc.
 

Federal Fair Packaging and Labeling Act:

Products must be clearly labeled/easy to understand/provide nutrition information

Environmental issues are concern.

Product Life Cycle (Exhibit 10-1):

1) Introduction: Low sales

2) Growth: Sales grow/profits peak

3) Maturity: Sales level off/competition tough

4) Decline: New products replace old products

Individual brands may not follow patterns

Depends on how market is defined. e.g., microwaves in foreign markets
 

Some products move quickly: when they have competitive advantage, easy to use, etc.

Product life cycles are getting shorter -- because of rapidly changing technology

Early birds get profits -- must develop new products constantly

Fashions have extremely short life-cycles.
 

See exhibit 10-2

Managing maturing products: Improve products or develop new products, or new strategy

Develop new strategies for different markets

Phasing out dying products: Might be possible to milk product if competitors move out quickly.
 

New product: One that is new in any way!!

FTC says product can be sold only as “new” for six months.

Some firms hold back new products until existing patents run out, planned obsolesces of products, etc.
 

See exhibit 10-4

New Product Development Process (Important!!)

• Idea generation
• Screening
• Idea evaluation
• Development
• Commercialization

Need new product development department/committee

Need process and new product managers!!