Colegio de San Juan de Letran

GRADUATE SCHOOL

COURSE GS MARKMAN
MARKETING MANAGEMENT

Product, Banding, and Packaging

Lesson 1. Product Classifications and Product Mixes

2. Branding, Packaging, Labelling
3. Product Life Cycle and Marketing Strategies

Objectives: 1. Explain the product classifications, levels, product lines, and product
mixes.
2. Describe the components strategies of branding, branding strategy,
packaging, and labeling.
3. Discuss the concept of PLC and available strategies to sustain market
strategies

Introduction The product is usually the basic marketing consideration to satisfy and needs
and wants of the consumers. This module begins by helping students to have
a vivid understanding of the concepts of a product and its classifications and
examine the product lines and product mixes. Next, it discusses branding,
packaging, and labeling concerning marketing strategies. Next, we look into
the critically important issue of how marketers build and manage brands.
Finally, the lesson proceeds to describe the product life cycle and its impact on
marketing strategies.

Activating Having learned the steps in selecting the target market by applying
Prior segmenting, targeting, and positioning, you are now ready to advance on
Knowledge developing products appropriate to the chosen market. To gain basic
knowledge of the topics, refresher materials are posted in GC for your
additional understanding. This includes the case of the reasons for the failure
of Kellogg’s in India during the initial year and how it succeeds later.
https://www.youtube.com/watch?v=wYeXCeBZhjE
https://www.youtube.com/watch?v=O3Alib4oyZA

Analysis Based on the materials uploaded in our Google Classroom

The following start-up questions to prepare you for the succeeding topics.

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Please submit your answers thru our GC.

1. Search online for an existing product that has demonstrated incremental
improvements and explain how the product improvement enhanced the
product’s position in the market.

Acquiring WHAT IS A PRODUCT?

New
Knowledge A product is anything that can be offered to a market for attention, acquisition,
use, or consumption that might satisfy a want or need.

Broadly defined, “products” also include services, events, persons, places,

organizations, ideas, or mixes of these.

Services are a form of product that consists of activities, benefits, or

satisfactions offered for sale that are essentially intangible and do not result in
the ownership of anything.

Products, Services, and Experiences

A company’s market offering often includes both tangible goods and services.

At one extreme, the offer may consist of pure tangible goods, such as soap or
toothpaste.

At the other extreme are pure services, for which the offer consists primarily
of service.

To differentiate their offers, marketers are creating and manage customer

experiences with their brands or company.

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Levels of Product and Services

Product planners need to think about products and services on three levels as
shown in Fig 4.1. Each level adds more customer value.

Fig. 4.1 Levels of Product and Services

1. Core customer value, which addresses the question: What is the

buyer buying? When designing products, marketers must first define the core,
problem-solving benefits or services that consumers seek. People who buy an
Apple iPad are buying much more than just a tablet computer. They are
buying entertainment, self-expression, productivity, and connectivity with
friends and family—a mobile and personal window to the world.

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2. Actual product. product planners must turn the core benefit into an
actual product. They need to develop product and service features, a design, a
quality level, a brand name, and packaging. For example, the iPad is an actual
product. Its name, parts, styling, features, packaging, and other attributes have
all been carefully combined to deliver the core customer value of staying
connected.

3. Augmented product, which is created around the core benefit and

actual product by offering additional consumer services and benefits. The
iPad is more than just a digital device. It provides consumers with a complete
connectivity solution. Thus, when consumers buy an iPad, Apple, and its
resellers also might give buyers a warranty on parts and workmanship,
instructions on how to use the device, quick repair services when needed, and
a website to use if they have problems or questions. It also provides access to
a huge assortment of apps and accessories.

When developing products, marketers first must identify the core customer
value that consumers seek from the product. They must then design the actual
product and find ways to augment it to create this customer value and the most
satisfying customer experience.

Checkpoint Question:
1. Select a product and discuss the levels of products and services.
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Product and Service Classifications

There are two main classifications of products: consumer products and

industrial products.

Consumer Products

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Consumer products are products and services bought by final consumers for
personal consumption. Consumer products include:

1. Convenience products are consumer products and services that

customers usually buy frequently, immediately, and with a minimum
of comparison and buying effort.

2. Shopping products are less frequently purchased consumer products

and services that customers compare carefully on suitability, quality,
price, and style.
3. Specialty products are consumer products and services with unique
characteristics or brand identification for which a significant group of
buyers is willing to make a special purchase effort.
4. Unsought products are consumer products that the consumer either
does not know about or knows about but do not normally think of
buying.

Industrial Products

Industrial products are those purchased for further processing or for use in
conducting business.

The three groups of industrial products and services are:

1. Materials and parts include raw materials and manufactured materials

and parts.
2. Capital items are industrial products that aid in the buyer’s production
or operations, including installations and accessory equipment.
3. Supplies and services include operating supplies and maintenance and
repair services.

Organizations, Persons, Places, and Ideas

Organization marketing consists of activities undertaken to create, maintain,

or change the attitudes and behavior of target consumers toward an
organization.

Person marketing consists of activities undertaken to create, maintain, or

change attitudes or behavior toward particular people.

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Place marketing involves activities undertaken to create, maintain, or change

attitudes or behavior toward particular places.

Social marketing is the use of commercial marketing concepts and tools in

programs designed to bring about social change.

Individual Product and Service Decisions

Product and Service Attributes

Developing a product or service involves defining the benefits that it will

offer. These benefits are communicated and delivered by product attributes
such as quality, features, style, and design.

Product Quality is creating customer value and satisfaction.

Total quality management (TQM) is an approach in which all the company’s

people are involved in constantly improving the quality of products, services,
and business processes.

Product quality has two dimensions: level and consistency.

The quality level means performance quality or the ability of a product to

perform its functions. Quality conformance means quality consistency,
freedom from defects, and consistency in delivering a targeted level of
performance.

Product Features are a competitive tool for differentiating the company’s

product from competitors’ products.

The company should periodically survey buyers who have used the product
and ask these questions: How do you like the product? Which specific features
of the product do you like most? Which features could we add to improve the
product?

Product Style and Design are another way to add customer value.

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Style describes the appearance of a product. Design contributes to a product’s

usefulness as well as to its looks.

Branding

A brand is a name, term, sign, symbol, design, or a combination of these, that

identifies the maker or seller of a product or service.

Branding helps buyers in many ways.

• Brand names help consumers identify products that might benefit

them.
• Brands say something about product quality and consistency.

Branding gives the seller several advantages.

• The brand name becomes the basis on which a whole story can be built
about a product.
• The brand name and trademark provide legal protection for unique
product features.
• The brand name helps the seller segment markets.

Packaging

A. Packaging involves the development of a container and a graphic design

for a product.
B. A package can be a vital part of a product, making it more versatile,
safer, and easier to use.
C. Like a brand name, a package can influence customers’ attitudes toward
a product and so affect their purchase decisions.0
D. Packaging Functions0
1. Packaging materials serve the basic purpose of protecting the
product and maintaining its functional form.
a. The packaging should prevent damage that could affect the
product’s usefulness and value and thus lead to higher costs.
2. Packaging offers convenience to consumers.
a. The size or shape of a package may relate to the product’s

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storage, convenience of use, or replacement rate.

3. Packaging promotes a product by communicating its features,
uses, benefits, and image.
a. Sometimes a reusable package is developed to make the
product more desirable.
4. As they develop packages, marketers must take many factors into
account.0
a. One major consideration is cost; in recent years, buyers have
shown a willingness to pay more for improved packaging,
but there are limits.
b. Marketers should consider how much consistency is
desirable among an organization’s package designs.0
c. To promote an overall company image, a firm may decide
that all packages should be similar or include one major
element of the design; this approach is called family
packaging.
(1) Sometimes it is used only for lines of products.
d. A package’s promotional role is an important
consideration.0
(1) To develop a package that has definite promotional
value, a designer must consider size, shape, texture,
color, and graphics.0
e. Beyond the obvious minimal limitation that the package
must be large enough to hold the product, a package can be
designed to appear taller or shorter.
Packaging must also meet the needs of resellers; wholesalers and retailers
consider whether a package

Packaging and Marketing Strategy

1. Packaging can be a major component of a marketing strategy.0
a. A new cap or closure, a better box or wrapper, or a more
convenient container size may give a product a competitive
advantage.
2. Marketers should view packaging as a major strategic tool,
especially for convenience products.
3. At times, a marketer changes a package or labeling because the

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existing design is no longer in style, especially when compared

with the packaging of competitive products.
a. A package may be redesigned because new product features
need to be highlighted or because new packaging materials
have become available.
b. An organization may also decide to change a product’s
packaging to make the product safer or more convenient to
use.
c. A product’s packaging can also be changed to make it easier
to handle in the distribution channel.
4. Marketers also use innovative or unique packages that are
inconsistent with traditional packaging practices to make the brand
stand out from its competitors.
a. Unusual packaging sometimes requires expending
considerable resources, not only on package design but also
on making customers aware of the unique package and its
benefit.
5. Multiple packaging can also be implemented in a firm’s packaging
strategy.
a. Rather than packaging a single unit of a product, marketers
sometimes use twin-packs, tri-packs, six-packs, or other
forms of multiple packaging.

Labeling

Labels perform several functions.

• The label identifies the product or brand.

• The label describes several things about the product.
• The label promotes the brand.

Labeling also raises concerns. As a result, several federal and state laws
regulate labeling.

Labeling has been affected in recent times by:

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• Unit pricing (stating the price per unit of standard measure)

• Open dating (stating the expected shelf life of the product)
• Nutritional labeling (stating the nutritional values of the product)

Product Support Services

The first step is to survey customers periodically to assess the value of current
services and to obtain ideas for new ones.

Next, the company can take steps to fix problems and add new services that
will both delight customers and yield profits for the company.

Product Line Decisions

A product line is a group of products that are closely related because they
function similarly, are sold to the same customer groups, are marketed through
the same types of outlets, or fall within given price ranges.

Product line length is the number of items in the product line.

Product line filling involves adding more items within the present range of the
line.

Product line stretching occurs when a company lengthens its product line
beyond its current range.

Companies located at the upper end of the market can stretch their lines
downward.

Companies located at the lower end of the market can stretch their product
lines upward.

Companies located in the middle range of the market can stretch their lines in
both directions.

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Product Mix Decisions

Product mix (or product portfolio) consists of all the product lines and items
that a particular seller offers for sale.

A company’s product mix has four dimensions: width, length, depth, and
consistency.

1. Product mix width refers to the number of different product lines the
company carries.
2. Product mix length refers to the total number of items the company
carries within its product lines.
3. Product mix depth refers to the number of versions offered of each
product in the line.
4. Product mix consistency refers to how closely related the various
product lines are in end use, production requirements, distribution channels, or
some other way.

The company can increase its business in four ways.

1. It can add new product lines, widening its product mix.
2. It can lengthen its existing product lines.
3. It can add more versions of each product, deepening its product
mix.
4. It can pursue more product line consistency.

Checkpoint #1.1: Self-Assessment Questions

1. How does an organization’s product mix relate to its development of a
product line?
2. When should an enterprise add depth to its product lines rather than width
to its product mix?
Fp
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_______________________________________________________________
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BRANDING STRATEGY: BUILDING STRONG BRANDS

Some analysts see brands as the major enduring asset of a company.

Brand Equity is the differential effect that knowing the brand name has on
customer response to the product and its marketing.

Young & Rubicam’s Brand Asset Evaluator measures brand strength along
four consumer perception dimensions:

1. Differentiation (what makes the brand stand out)

2. Relevance (how consumers feel it meets their needs)
3. Knowledge (how much consumers know about the brand)
4. Esteem (how highly consumers regard and respect the brand)

Brand valuation is the process of estimating the total financial value of a

brand.

High brand equity provides a company with many competitive advantages.

• High level of consumer brand awareness and loyalty

• More leverage in bargaining with resellers
• More easily launch line and brand extensions
• Defense against fierce price competition
• Forms the basis for building strong and profitable customer
relationships

The fundamental asset underlying brand equity is customer equity—the value

of the customer relationships that the brand creates.

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Building Strong Brands

Major Brand Strategy Decisions

Branding poses challenging decisions to the marketer. Figure 4.3 shows that
the major brand strategy decisions involve brand positioning, brand name
selection, brand sponsorship, and brand development.

Figure 4.3 Major Brand Strategy Decisions

Brand Positioning

Marketers can position brands at any of three levels.

1. They can position the brand on product attributes.

2. They can position the brand with a desirable benefit.
3. They can position the brand on beliefs and values.

Brand Name Selection

Desirable qualities for a brand name include the following:

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1. It should suggest something about the product’s benefits and qualities.

2. It should be easy to pronounce, recognize, and remember.
3. The brand name should be distinctive.
4. It should be extendable.
5. The name should translate easily into foreign languages.
6. It should be capable of registration and legal protection.

Brand Sponsorship

A manufacturer has four sponsorship options.

1. The product may be launched as a manufacturer’s brand (or national

brand).
2. The manufacturer may sell to resellers who give it a private brand (also
called a store brand or distributor brand).
3. The manufacturer can market licensed brands.
4. Two companies can join forces and co-brand a product.

National Brands Versus Store Brands

National brands (or manufacturers’ brands) have long dominated the retail
scene. In recent times, an increasing number of retailers and wholesalers have
created their store brands (or private brands).

Recent tougher economic times have created a store-brand boom. Private label
brands now capture more than 29 percent of all supermarket sales.

In the battle of the brands between national and private brands, retailers have
many advantages.

1. Retailers often price their store brands lower than comparable national
brands.
2. Store brands yield higher profit margins for the reseller.
3. Store brands give resellers exclusive products that cannot be bought
from competitors.

Licensing

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Name and character licensing has grown rapidly in recent years. some
companies license names or symbols previously created by other
manufacturers, names of well-known celebrities, or characters from popular
movies and books. For a fee, any of these can provide an instant and proven
brand name. Apparel and accessories sellers pay large royalties to adorn their
products —from blouses to ties and linens to luggage—with the names or
initials of well-known fashion innovators such as Calvin Klein, Tommy
Hilfiger, Gucci, or Armani.

Co-branding

Co-branding occurs when two established brand names of different companies

are used on the same product.

Co-branding offers many advantages.

• The combined brands create broader consumer appeal and greater

brand equity.
• Co-branding also allows a company to expand its existing brand into a
category it might otherwise have difficulty entering alone.

Co-branding also has limitations.

• Such relationships involve complex legal contracts and licenses.

• Co-branding partners must carefully coordinate their advertising, sales
promotion, and other marketing efforts.
• Each partner must trust the other will take good care of its brand.

Brand Development

A company has four choices when it comes to developing brands (see Figure
4.4).

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Fig, 4.4 Brand Development Strategies

1. Line extensions occur when a company extends existing brand names

to new forms, colors, sizes, ingredients, or flavors of an existing product
category.
2. Brand extensions extend a current brand name to new or modified
products in a new category.
3. Multibranding introduces additional brands in the same product
category.
4. New brands
A company might believe that the power of its existing brand name is waning,
so a new brand name is needed. Or it may create a new brand name when it
enters a new product category for which none of its current brand names are
appropriate.

Managing Brands

The brand experience is customers coming to know a brand through a wide

range of contacts and touchpoints. Companies need to periodically audit their
brands’ strengths and weaknesses.

Product Life Cycles and Marketing Strategies

A. A product life cycle has four major stages—introduction, growth, maturity, and
decline
B. As a product moves through its cycle, the strategies relating to competition,

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pricing, distribution, promotion, and market information must be evaluated

periodically and possibly changed.0
C. Introduction
1. The introduction stage of the product life cycle begins at a product’s first
appearance in the marketplace when sales start at zero and profits are
negative.0
2. Profits are below zero because initial revenues are low, and the company
generally must cover large expenses for product development,
promotion, and distribution.
3. Potential buyers must be made aware of new-product features, uses, and
advantages.
a. Two difficulties may arise at this point:
(1) Sellers may lack the resources, technological knowledge, and
marketing know-how to launch the product successfully.
(2) The initial product price may have to be high to recoup
expensive marketing research or development costs.
4. Most new products start slowly and seldom generate enough sales to bring
immediate profits.0
a. As buyers learn about the new product, marketers should be alert
to product weaknesses and make corrections quickly to prevent
the product’s early demise.
b. The marketing strategy should be designed to attract the segment
that is most interested in, most able, and most willing to buy the
product.
D. Growth0
1. During the growth stage, sales rise rapidly; profits reach a peak and then
start to decline.
2. This stage is critical to a product’s survival because competitive reactions
to the product’s success during this period will affect the product’s life
expectancy.
3. Profits begin to decline late in the growth stage as more competitors enter
the market, driving prices down and creating the need for heavy
promotional expenses.
4. As sales increase, management must support the momentum by adjusting
the marketing strategy.0
a. The goal is to establish and fortify the product’s market position
by encouraging adoption and brand loyalty.
5. Gaps in geographic market coverage should be filled during the growth
period.

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a. As a product gains market acceptance, new distribution outlets

usually become easier to obtain.
6. Promotion expenditures may be slightly lower than during the introductory
stage but are still substantial.
a. As sales increase, promotion costs should drop as a percentage of
total sales.
E. Maturity0
1. During the maturity stage, the sales curve peaks and starts to decline, and
profits continue to fall.
2. This stage is characterized by intense competition as many brands are now
in the market.0
a. Competitors emphasize improvements and differences in their
versions of the product.
b. Weaker competitors are squeezed out of the market.
3. During the maturity phase, the producers who remain in the market are
likely to change their promotional and distribution efforts.
a. Advertising and dealer-oriented promotions are typical during this
stage of the product life cycle.
4. Because many products are in the maturity stage of their life cycles,
marketers must know how to deal with these products and be prepared to
adjust their marketing strategies.
a. To increase the sales of mature products, marketers may suggest
new uses for them.
5. As customers become more experienced and knowledgeable about
products during the maturity stage (particularly about business
products), the benefits they seek may change as well, necessitating
product modifications.
6. During the maturity stage, marketers actively encourage resellers to
support the product.
a. Resellers may be offered promotional assistance in lowering their
inventory costs.
7. Maintaining market share during maturity can require moderate, and
sometimes large, promotional expenditures.
8. Advertising messages focus on differentiating a brand from the field of
competitors, and sales promotion efforts may be aimed at both
consumers and resellers.
F. Decline0
1. During the decline stage, sales fall rapidly.0
a. When this happens, the marketer considers pruning items from the

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product line to eliminate those not earning a profit.

b. The marketer also may cut promotion efforts, eliminate marginal
distributors, and finally, plan to phase out the product.
2. In this stage, marketers must determine whether to eliminate the product or
try to reposition it to extend its life.
a. Usually, a declining product has lost its distinctiveness because
similar competing or superior products have been introduced.0
3. During a product’s decline, outlets with strong sales volumes are
maintained and unprofitable outlets are eliminated.
a. Spending on promotion efforts is usually reduced considerably.

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Fig. 4.5 Product Life Cycle

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