Product-Marketing

High-technology and intangible products.

- Education — Educating people as to what the product is before you can sell it. - Higher requirements — More complex or difficult to understand products that require a higher-level approach to marketing. - Obsolescence — Marketing has to be better and faster but it's not.

FAB table elements

- Features — These are inherent product characteristics. - Benefits — What the product does for a particular target segment. - Advantages — What the product does better than competitors. - Tangibles — This describes the time and money saving capabilities of the product over status quo (indirect) and direct competitors.

Special Types of Product Strategies

- Lettuce — Make a new product from parts that were discarded.12-2. - Gillette — Give away the razor and sell the blades. - Jukebox — Split revenues with owners for use of their space. 12-4. TV or Google — Give away the product and have advertisers pay.

Product Family Strategies

- Main product — This is the primary product you are selling. - Options — Add-ons that give additional customizable functionality. - Accessories — Give the product additional minor functionality. - Supplies — Consumable items that enable the product to work. - Add-on services —Training, service, support, delivery, installation - Upgrades —Updated capabilities that can be purchased. - Literature —Manuals, instructions, brochures, directions, diagrams.

How can you can use the product building block as a barrier to entry

- Standards — Establish your product as the standard (Wintel standard established by Microsoft and Intel gave both 85 to 95% of the desktop computer market. - Patent protection—Legal protection can help to keep competitors from developing confusingly similar products. - Trademark protection — Trademarks can work with patents to erect barriers that work with your positioning to lock out competitors. - Design— iPod in combination with the iTunes store has give Apple Computer a big jump on competitors based on design and ease of use. - Easier to use advantage — Google dominates search because of their very simple, uncluttered, easy-to-use home page and search window as well as their good-working product. - Product quality — Lexus came to quickly dominate the luxury car market by have a top-quality luxury product with great service.

2 main components of a product

-Core component. This is what it is designed to do. -Peripheral component. Customer service while finding, buying, and using the product. This gives service tangible value.

Product Design Models.

-Standard Product Model. Everyone who buys the product starts with the same basic product. To customize it, they can adds options and accessories that are sold as separate add-ons. -Diversified Product Model. Each product is already diversified to meet the needs of the target market segment. -Hybrid. Start with a diversified product, and add options and accessories to further customize it.

Life Cycle Phases

1. Introduction 2. Growth 3. Maturity 4. Decline

sales attributed Early Adopters or Opinion Leaders

13-14% of sales

sales attributed Laggards

16% of sales

sales attributed Innovators

3-4% of sales

sales attributed Early Majority

33-34% of sales

sales attributed Late Majority

33-34% of sales

Product as P of Marketing

= Device + other direct product elements (name, logo, slogan, packaging, serial number, instructions, warranty, etc.)

Complete Core Component

= Product as P of Marketing + other 6 building blocks or = Device + other direct product elements + other 6 building blocks

Options

Add-ons that give additional customizable functionality.

Supplies

Consumable items that enable the product to work.

Peripheral component

Customer service while finding, buying, and using the product. This gives service tangible value.

Product Design Considerations

Design considerations include... Customer needs, Positioning and name, Features, Aesthetics, Global issues, Human factors, Performance, Quality, Durability, Cost/Price, Service issues, Delivery and installation, Packaging, Legal issues (patent, trademark, and ©), Government regulations, Competition.

Diversified Product Model

Each product is already diversified to meet the needs of the target market segment. This is more expensive, and may be used by companies as they become wealthier and more sophisticated . Think the original GM Product Line. Cadillac, Buick, Pontiac, Oldsmobile, Chevrolet

Standard Product Model

Everyone who buys the product starts with the same basic product. To customize it, they can adds options and accessories that are sold as separate add-ons; modular in structure.

Purpose of a FAB Table

For each product you should develop a FAB table this will not only help you in creating a more competitive product it will have those who execute your promotion strategies (advertising and sales) to do a better job.

Product relationship to positioning strategy

Fulfills the promise of positioning strategy. The positioning strategy creates the image blueprint of the product, and the product has to deliver

Gilette Product Strategy

Give away the razor and sell the blades.

Accessories

Give the product additional minor functionality.

Product

Goods and services developed to meet the needs of market targets and to achieve the goals of the Marketing Plan.

Product Family

Group of related products: 1. Main product 2. Options 3. Accessories 4. Supplies 5. Add-on services 6. Upgrades 7. Literature

Lettuce Product Strategy

Make a new product from parts that were discarded

Literature

Manuals, instructions, brochures, directions, diagrams.

Product relationship to buyer

Meets or exceeds expectations. A successful product cannot disappoint the buyer. It has to meet or exceed the expectations of the positioning strategy.

Product Life Cycle.

Once they are born from your New Product Development System they follow a life cycle. Figure 8-1 on the following page show a typical Product Life Cycle along with the sub-segments that may be likely to buy it at each stage.

Product relationship to marketplace

Satisfies an important need. To be successful, the product has to satisfy a need in the marketplace that is important to our target audience.

Jukebox Product Strategy

Split revenues with owners for use of their space.

Hybrid Product Model

Start with a diversified product, and add options and accessories to further customize it.

Give away the product and have advertisers pay.

TV or Google Product Strategy

Product Line Strategies

The product line is made up of the product families that have been developed to meet the needs of different segments.

Introduction Phase

This is the phase where the product is introduced to the market and innovators, experimenters, risk takers, and those who want to be the first to buy most products will buy.

Main product

This is the primary product you are selling.

Growth Phase

This is where sales growth is the steepest and Early Adopters who want dramatic improvements over their current situation will buy.

Maturity Phase

This where the curve flattens and the majority (early and late) of buyers buy the product.

Decline Phase

This where the curve heads downward, and late majority and laggards are the groups most likely to buy the product.

Add-on services

Training, service, support, delivery, installation

Upgrades

Updated capabilities that can be purchased.

Core component

What a product is designed to do.

Revenue • Product Model

With the Internet, _____________ can grow richer and include the following components: 1. Traditional and E-commerce 2. Digital downloads 3. Advertising 4. Database 5. Commissions 6. Referral fees 7. Virtual store

Virtual store rental

You can create ___________ on your site, and collect rents, % of gross sales, and listing fees.

Database

You can rent or sell your _______ to others who want to reach your prospect/customer list

Accénture Product Revenue Model

_________ company did the software for the air traffic control system at Chicago OʼHare airport. To win the job they charged nothing but opted for a 1¢ royalty on every takeoff and landing.

Long Tail

in cyberspace you are not limited to physical shelf space so you can make as much money from the non-hits as the hits by merely listing them on your website.

Device

physical part of the product. Marketing turns _______ into products.

- Features

— These are inherent product characteristics.

- Tangibles

— This describes the time and money saving capabilities of the product over status quo (indirect) and direct competitors.

- Advantages

— What the product does better than competitors.

- Benefits

— What the product does for a particular target segment.