When we finish this lecture you should CHAPTER NINE ...

[Pages:7]CHAPTER NINE

Elements of Product Planning for Goods and Services

For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. ? 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

fourps

When we finish this lecture you should

1. Understand what "Product" really means. 2. Know the key differences between goods and

services.

3. Understand how product classes can help a

marketing manager plan marketing strategies.

4. Know the differences among the various

consumer and business product classes.

5. Understand what branding is and how to use it in strategy planning.

When we finish this lecture you should

6. Understand the importance of packaging in

strategy planning.

7. Understand the role of warranties in strategy

planning.

Product Decisions for Marketing Strategy Planning

(Exhibit 9-1)

Product Decisions for Marketing Strategy Planning

(Exhibit 9-1)

Product Quality and Customer Needs

CH 9: Elements of Product Planning for Goods & Services

CH 10: Product Management & New-Product Development

Product idea

Product classes

Brand

Package

Warranty

Basic Marketing ? Chapter 9 Handout 9-1

Relative Quality

Goods and/or Services Are the Product (Exhibit 9-2)

Differences in Goods and Services

Devoted to erasing

stereotypes

Whole Product Lines Must Be Developed Too

Product Assortment, Product Line or Individual Product?

Product Classes Help Plan Marketing Strategy

? 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Consumer Products

Business Products

Basic Marketing ? Chapter 9 Handout 9-2

Consumer Product Classes

CCoonnvveenniieennccee PPrroodduuccttss

Shopping Products Specialty Products Unsought Products

Staples

Impulse Products

Emergency Products

Homogeneous Shopping Products

Heterogeneous Shopping Products

New Unsought Products

Regular Unsought Products

One Product May Be Seen Several Ways

Checking your knowledge

Jack White wanted to purchase a new dress shirt. He went to a local department store, toured the men's department, and thought all the brands looked about the same. He decided to buy the store brand shirt, because it was the cheapest. For Jack, the new shirt was a(n):

A. convenience product. B. heterogeneous shopping product. C. specialty product. D. homogeneous shopping product. E. impulse product.

Business Products Are Different

Derived Demand Inelastic Industry Demand

Tax Treatments Differ

Business Product Classes ? How They Are Defined

Installations

Professional Services

Accessories

Business Product Classes

MRO Supplies

Raw Materials

Component Parts & Materials

Interactive Exercise: Business Product Classes

? 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Basic Marketing ? Chapter 9 Handout 9-3

Branding Needs a Strategy Decision, Too (Exhibit 9-5)

Conditions Favorable to Branding

Easy to Label and

Identify

Favorable Shelf or Display Space

Best Value for the Price

Key Issues

Economies of Scale

Dependable, Widespread Availability

MMaarrkkeett PPrriiccee CCaann BBee HHiigghh

EEnnoouugghh

Achieving Brand Familiarity Is Not Easy

Brand Insistence

Brand Preference

Brand Recognition Brand NonRecognition Brand Rejection

Brand Familiarity

More of your customers ask for Fix-A-Flat by name than

all of our competitors combined. You just can't buy that kind

of brand recognition, but you can sell it. Fix-AFlat: Spare

Yourself.

The Right Brand Name Can Help (Exhibit 9-6)

Short & Simple Easy to Spell & Read Easy to Recognize & Remember

Easy to Pronounce Can Pronounce in Only One Way

Can Pronounce in All Languages Suggests Product Benefits Meets Packaging/Labeling Needs No Undesirable Imagery Always Timely Adapts to Any Advertising Medium Legally Available for Use

A Good Brand Name?

? 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Basic Marketing ? Chapter 9 Handout 9-4

Protecting Brand Names & Trademarks

Lanham Act

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Counterfeiting Is Accepted In Some Cultures

What Kind of Brand to Use?

Family Brand

Generic "Brand"

Brand Choices

Licensed Brand

Individual Brand

Who Should Do the Branding?

Manufacturer Brands

? Also called national brands

? Created/owned by producers

? Develop demand across many markets

Battle of the Brands

Dealer Brands

? Also called private brands or store brands

? Created/owned by middlemen

? Create higher margins for dealers

Checking your knowledge

Target's "Cherokee" brand of men's clothing is available only at Target stores. The brand provides a low-cost alternative to other men's fashions available at department stores and via catalogs. The Cherokee brand is a(n):

A. manufacturer brand. B. dealer brand. C. licensed brand. D. national brand. E. generic brand.

The Strategic Importance of Packaging

Packaging Can Enhance the Product

Packaging Sends a Message

UPC Codes Speed Handling

Packaging Can Lower

Distribution Costs

What Is Socially Responsible Packaging?

Fair Packaging & Labeling Act Laws Reduce Clutter & Confusion

Ethical Decisions Remain

Basic Marketing ? Chapter 9 Handout 9-5

Checking your knowledge

Heinz has a new ketchup bottle that has the cap on the bottom, instead of the top. The bottle uses gravity to help the consumer get every last drop of ketchup out of the bottle. The cap is also designed to pour cleanly, so that dried ketchup does not accumulate around the opening. This new bottle demonstrates how packaging can:

A. promote product. B. protect the product. C. lower distribution costs. D. incorporate UPC codes. E. enhance product usage.

Warranty Policies Are a Part of Strategy Planning

Promises in Writing

MagnusonMoss Act

Support May Be Costly

Service Guarantees

MMaayy IImmpprroovvee MMaarrkkeettiinngg MMiixx

Checking your knowledge

McDonald's announced that at select locations, if drivethrough customers do not get exactly what they want within two minutes of placing the order, their next meal will be free. This promise by McDonald's is a good example of a(n):

A. service guarantee. B. warranty. C. unit price. D. limited warranty. E. no-fault insurance policy.

You now

1. Understand what "Product" really means. 2. Know the key differences between goods and

services.

3. Understand how product classes can help a

marketing manager plan marketing strategies.

4. Know the differences among the various

consumer and business product classes.

5. Understand what branding is and how to use it in

strategy planning.

You now

6. Understand the importance of packaging in

strategy planning.

7. Understand the role of warranties in strategy

planning.

Key Terms

? Product

? Emergency products

? Quality

? Shopping products

? Service ? Product assortment ? Product line ? Individual product ? Consumer products ? Business products

? Homogeneous

shopping products

? Heterogeneous

shopping products

? Specialty products ? Unsought products ? New unsought

? Convenience products products

? Staples

? Regularly unsought

? Impulse products

products

? Derived demand

Basic Marketing ? Chapter 9 Handout 9-6

Key Terms

? Expense item

? Brand name

? Capital item

? Trademark

? Installations

? Service mark

? Accessories

? Brand familiarity

? Raw materials

? Brand rejection

? Farm products

? Brand nonrecognition

? Natural products ? Brand recognition

? Components

? Brand preference

? Supplies

? Brand insistence

? Professional services ? Brand equity

? Branding

? Lanham Act

Key Terms

? Family brand

? Federal Fair

? Licensed brand

Packaging and

? Individual brands

Labeling Act

? Generic products ? Warranty

? Manufacturer brands ? Magnuson-Moss Act

? Dealer brands

? Private brands

? Battle of the brands

? Packaging

? Universal Product

Code (UPC)

Basic Marketing ? Chapter 9 Handout 9-7

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