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Chapter 5 Product Strategy

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Marketing (Product Strategy) - Discuss about levels of product, product classification, brand strategies, packaging and labeling of the consumer products.

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Chapter 5 Product Strategy

  1. 1. Chapter 5 Product Strategy Prepared by: Nor Izzuddin Bin Norrahman Lecturer of Management, Banking & Islamic Finance Astin College
  2. 2. • A product can be defined as – Anything that can be offered to a market attention, acquisition, use, or consumption that might satisfy a want or need. • It includes: – Physical Objects – Services – Persons – Places – Organizations – Ideas
  4. 4. Core Product • The most basic level • Address the question: what is the buyer really buying? • Problem-solving benefits • The benefit that the consumers will receive • Example?
  5. 5. Actual Product • Build around the core products • Basically have 5 Characteristics: – Quality level – Features – Design – Brand name – Packaging
  6. 6. Augmented Product • Built around both core and actual product • By offering additional consumer services and benefits • Examples?
  7. 7. Example
  8. 8. PRODUCT CLASSIFICATION • Products and services fall into two broad classes based on the types of consumers that use them: – Consumer Products – Industrial Products
  9. 9. Consumers Product • Are those brought by final consumers for personal consumption. • Marketers usually classify these goods – Convenience Goods – Shopping Goods – Specialty Goods – Unsought Goods
  10. 10. Marketing Consideration for Consumer Products
  11. 11. Convenience Products • Consumer products and services that the consumer usually buys: • FREQUENTLY, • Immediately, • And with a minimum of comparison and buying effort. • Examples?
  12. 12. Shopping Products • Less frequently purchased. • Customer will COMPARE carefully on: – Suitability – Quality – Price – Style • Much time and effort needed to: – Gather info – Compare
  13. 13. Specialty Products • Consumer products & services that have UNIQUE characteristics. • Which significant group is WILLING to buy • Example?
  14. 14. Unsought Products • Either: – Consumer does not know about the products – Consumer does not think to buy the products • Example?
  15. 15. INDIVIDUAL PRODUCTS DECISIONS Product attributes Branding Packaging Labeling Product support services
  16. 16. Product Attributes • Developing a product or services involves defining the BENEFITS that it will offer. • These benefits measured by: – Quality – Features – Design
  17. 17. Product Attributes • Product Quality – Two dimensions: • Level – In developing product, the marketer must choose quality level – To support the product position in market – Examples? • Consistencies – Conformance quality – Freedom from defects and consistency in delivering a targeted level of performance – Examples?
  18. 18. Product Attributes • Product Features – A product can be offered by varying features. – Should ask question: • How do you like the product? • Which specific features do you like the most? • Which features that you want us to add in the products?
  19. 19. Product Attributes • Product Designs – Design is a larger concept than style – Style – simply describe appearance of a product, but it doesn’t necessarily make the product perform better. – Good design contributes to a product’s USEFULNESS as well as it’s looks. – Good design can attract attention, improve product performance, cut production costs and give strong competitive advantage.
  20. 20. Branding • A brand is a name, symbol, term, sign, or design, or combination of these, that identifies the maker or seller of a product or services. • It help consumers identify the products. • It also tell the buyer something about the product
  21. 21. Branding • Brand Equity – Brands vary in the amount of power and value – A powerful brand has high brand equity. – High brand equity provides competitive advantages. – It also will affected the consumer brand awareness and loyalty.
  22. 22. Branding • Brand Name Selection – A good name can add greatly to a product’s success. – Desirable qualities for a brand name includes: • Suggest benefits and qualities (examples?) • Easy to pronounce, recognize and remember (examples?) • Distinctive (Examples?) • Translate easily to foreign language • Should be capable of registration and legal protection
  23. 23. Branding • Brand Sponsor – Four sponsorship options: • Manufacturer’s brand • Private brand – Hard to establish / costly – Yield high profit – cannot be bought at other competitors • Licensing – Use well-known celebrity • Co-Branding – Mix the company resources with another company to create a product
  24. 24. Brand Strategies
  25. 25. Brand Strategies • Line Extension – When company introduces ADDITIONAL items in a given product category under the same brand name. – Examples: Flavors, colors, ingredients – It is a low cost & low risk method in introducing the new products. – Risk: overextended – might lose its specific meaning (Coke vs Diet Coke, Coke Zero, Vanilla Coke)
  26. 26. Brand Strategies • Brand Extensions – Involves the use of a successful brand name to launch a NEW or MODIFIED PRODUCTS in a NEW CATEGORY] – Example: Honda (Motorcycles, Cars, etc.) – Pro: Instant recognition & faster acceptance – Cons: if the brand extension fails, it may harm the consumer attitude towards the brand name.
  27. 27. Brand Strategies • Multi-brands – Company often introduce additional brands in the same category – Example: Watches (CASIO) • G-Shock (Durability) • Edifice (Low-Price) • Others? – Why they do that? Isn’t the buyer will become more confuse on which watch that they want to buy? – Pro: To protect the flanks of its CASIO brand in the watches industry – Cons: May not profitable when it only meet small market share. (sources which they have separated is wasted)
  28. 28. Brand Strategies • New brands – A company may create a new brand name when it enter a new category. – Or because a company might believe that the power of its existing brand name is waning and need a new one. – Example: Nestle -> MILO, HONEY STAR, NESCAFE – Pros? – Cons?
  29. 29. Brand Strategies • Mega-brands – Weeding out weaker brands – Focusing the resources only on brands that can achieve number one or two in the market – Share positions in their categories. – Examples? – Pros? – Cons?
  30. 30. Packaging • Packaging involve designing and producing the container or wrapper for a product. • The package may include: – The Brands name – The instruction manual – Ingredients – Others? • Why we need it?
  31. 31. Labeling • Labels may range from simple tags to complex graphic attached with the package. • It perform several function: – Identifies brand or product • Sunkist -> print on an orange picture – Describe several thing about the product • Who made it? Where are they from? Expired Date – Promote the product • NEW PRODUCT! NEW FORMULA!
  32. 32. The End….any question? 