Philip Kotler, Kevin Lane Keller-Marketing Management, 14th Edition-Prentice Hall (2012)

1. 12
Setting Product Strategy
1

2. Chapter Questions

What are the characteristics of products and
how do marketers classify products?

How can companies differentiate products?

Why is product design important and what
factors affect a good design?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-2

3. Chapter Questions

How can a company build and manage its
product mix and product lines?

How can companies combine products to
create strong co-brands or ingredient brands?

How can companies use packaging, labeling,
warranties, and guarantees as marketing
tools?
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4. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-4
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.

5. Figure 12.1 Components of the
Market Offering
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6. Figure 12.2 Five Product Levels
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7. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-7
Product Classification Schemes
Durability
Tangibility
Use

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Durability and Tangibility
Nondurable goods
Durable goods
Services

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Consumer Goods Classification
Convenience
Shopping
Specialty
Unsought

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

11. Product Differentiation

Product form

Features

Customization

Performance

Conformance

Durability

Reliability

Repairability

Style
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12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-12
Service Differentiation

Ordering ease

Delivery

Installation

Customer training

Customer consulting

Maintenance and repair

Returns

13. Design
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14. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-14
The Product Hierarchy

15. Product Systems and Mixes
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16. Figure 12.3 Product-Item
Contributions to a Product Line’s
Total Sales and Profits
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17. Figure 12.4 Product Map for a
Paper-Product Line
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18. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-18
Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch

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

20. Ingredient Branding
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21. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-21
What is the Fifth P?
Packaging, sometimes called the 5th
P, is
all the activities of designing and
producing the container for a product.

22. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-22
Factors Contributing to the
Emphasis on Packaging

Self-service

Consumer affluence

Company/brand image

Innovation opportunity

23. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-23
Packaging Objectives

Identify the brand

Convey descriptive and persuasive
information

Facilitate product transportation and
protection

Assist at-home storage

Aid product consumption

24. Functions of Labels
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25. For Review

What are the characteristics of products and
how do marketers classify products?

How can companies differentiate products?

Why is product design important and what
factors affect a good design?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2-25

26. Also For Review

How can a company build and manage its
product mix and product lines?

How can companies combine products to
create strong co-brands or ingredient brands?

How can companies use packaging, labeling,
warranties, and guarantees as marketing
tools?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12-26