Chapter 8:

Labeling

1) Identify 2) Describe 3) Promote, support, connect -can also mislead customers, fail to describe important ingredients, or fail to include needed safety warnings Has been affected recently by: -unit pricing -open dating -nutritional labeling

Product and Service Decisions (3 Levels)

1) Individual Product decisions 2) Product Line decisions 3) Product Mix decisions

Two Dimensions of Quality

1) Level (performance quality) 2) Consistency (conformance quality)

Product and Service Attributes

1) Product Quality -Top quality management -Two dimensions of quality (performance and conformance) 2) Product Features 3) Product Style and Design -Style -Design

Product Features

Features are a competitive tool for differentiating the company's product from competitor's products

Conformance Quality (Consistency)

Freedom from defects and consistency in delivering a targeted level of performance

Core Benefit Proposition

Marketers must define the core, problem solving benefits or services that consumers seek -Ex) People who buy a BlackBerry are really buying freedom and on the go connectivity

Core Customer Value (Core Product)

Most Basic (First) Level -Addresses the question, "What is the buyer really buying?"

Product Line Length

Number of items in the product line •line too short=manager increase profits by adding items •line too long=manager increase profits by dropping items *Can expand in 2 ways: Line filling, Line Stretching

Actual Product

Second Level -Product planners must turn the core benefit into an actual product; need to develop tangible product and service features, design, a quality level, a brand name, and packaging -Ex) Megapixels on a camera, memory on a hard drive

Style

Simply describes the appearance of a product -does not make the product perform better

Open Dating

Stating the expected shelf life of the product

Nutritional Labeling

Stating the nutritional values in the product

Unit Pricing

Stating the price per unit of standard measure

Product Support Services

Survey customers periodically to assess the value of current services and to obtain ideas for new ones

Packaging

The activities of designing and producing the container or wrapper for a product -Packaging helps brands stand out -Bad packaging can lose business -Innovative Packaging can help gain business -Packaging can be an entry barrier

The "Onion" Model

1) Core Customer Value (Core Product) 2) Actual Product 3) Augmented Product

Ways Branding Helps Buyers

-Help consumers identify products that might benefit them -Signal product quality and consistency -Satisfy status needs -Simply shopping

Materials and Parts

-Raw materials -Manufactured materials and parts

Ways Branding Helps Sellers

-Serve as a basis of differentiation -Help foster customer relationships and loyalty -Represent a valuable intangible

Unsought Product

A consumer product that the consumer either does not know about or knows about but does not normally think of buying -little product awareness -price/distribution varies -aggressive advertising -Ex) life insurance, blood donations

Convenience Product

A consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort. -frequent purchase, little planning/effort, low customer involvement -low price -widespread distribution -mass promotion by producer -Ex) toothpaste, magazines

Shopping Product

A consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style. -less frequent purchase, much planning/effort, comparison of brands -higher prices -selective distribution -advertising/personal selling by both producer and resellers -Ex) TV, furniture, clothing

Specialty Product

A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort -i.e) they invest only the time needed to reach dealers carrying the wanted products -strong brand preference/loyalty -high price -exclusive distribution -more carefully targeted promotion -Ex) luxury goods

Product Line

A group of products that are closely related because they may: -function in a similar manner -sold to the same customer groups -marketed through same types of outlets -fall within given prices ranges

Brand

A name, term, sign, symbol, design, or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors

Consumer Product

A product bought by final consumers for personal consumption -Includes: convenience, shopping, speciality, unsought products

Industrial Product

A product bought by individuals and organizations for further processing or for use in conducting a business 3 parts: 1) materials and parts 2) capital items 3) supplies and services

Performance Quality (Level)

Ability to perform its functions

Service

An activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need -includes services, events, persons, places, organizations, ideas or mixes of these

Total Quality Management (TQM)

Approach in which all the company's people are involved in constantly improving the quality of products, services, and business processes

Person Marketing

Consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people

Organization Marketing

Consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization -organization sells itself

Design

Contributes to a product's usefulness as well as to its looks -goes to the very heart of a product; begins with a deep understanding of consumer needs

Supplies and Services

Include operating supplies and repair/maintenance items -Ex) coal, paper, pencils, paint, nails

Capital Items

Industrial products that aid in the buyer's production or operations, including installations and accessory equipment -Ex) portable factory equipment, tools, and office equipment- computers

Place Marketing

Involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places

Line Filling

Involves adding more items within the present range of the line

Augmented Product

Last (Third) Level -Product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits (enhancements) -Ex) An iPhone without a data plan is just an expensive phone

Line Stretching

Occurs when a company lengths its product line beyond its current range -companies located at the upper end of the market can stretch their lines downward (add lower priced products) -companies can also stretch their lines upwards (add higher priced products) in order to add prestige to their current products -companies in the middle range of the market may decide to strength their lines in both directions

Individual Product and Service Decisions

Product and Service Attributes → Branding → Packaging → Labeling → Product Support Services

Product Quality

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs -"freedom from defects"

Consumer vs. Industrial Product

The same product- bought by different people- can be a consumer product or an industrial product.

Social Marketing

The use of commercial marketing concept and tools in programs designed to influence individuals' behavior to improve their well-being and that of society

Societal Marketing

The use of commercial marketing concept sand tools in programs designed to influence individuals' behavior to improve their wellbeing and that of society -Ex) public health campaigns to reduce smoking, drug abuse, obesity