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Setting Product Strategy

1) A product is anything that can satisfy a want or need in the market through acquisition, use, or consumption. 2) There are five levels of a product - the core benefit, generic product, expected product, augmented product, and potential product - with each level adding more features and services. 3) Products can be classified based on durability, tangibility, consumer versus industrial goods, and how frequently or effortfully they are purchased. Differentiating products through features, quality, style and other attributes can provide a competitive edge.

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Prakriti Hagar ABSRAI
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231 views32 pages

Setting Product Strategy

1) A product is anything that can satisfy a want or need in the market through acquisition, use, or consumption. 2) There are five levels of a product - the core benefit, generic product, expected product, augmented product, and potential product - with each level adding more features and services. 3) Products can be classified based on durability, tangibility, consumer versus industrial goods, and how frequently or effortfully they are purchased. Differentiating products through features, quality, style and other attributes can provide a competitive edge.

Uploaded by

Prakriti Hagar ABSRAI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Setting Product Strategy

What is Product
A Product is anything that can be offered to
a market for attention, acquisition, use or
consumption that might satisfy a want
or need .
Managing Product Lines and Brands
The best way to hold customers is to
constantly figure out how to give them
more for less
Managing Product lines and Brands
• The product and the Product Mix
Components of the Market Offering :

Value based price

Attractiveness of the
Market Offering

Product features and Service mix and


quality quality
Managing Product lines and Brands

▫ Product Levels
According to Levitt: New competition is
between what companies add to their factory
output in the form of packaging , services,
advertising, customer advice, financing , delivery
arrangements, warehousing and other things that
people value.
Product Level
Potential Product

Augmented Product

Expected Product

Basic Product

Core Benefit
5 Product Levels
1. Core Benefit • Sleep & Rest
2. Generic Product • Building , Rooms
3. Expected Product – • Food, Clean Toilet,
Developing World Linen
4. Augmented Product • TV, Fresh Flowers
Secretarial Service….
5. Potential Product • Points to the Future ..
E.g. All Suite Hotel
Five Product Levels
1. Core Benefit - The fundamental service or
benefit that the customer is really buying

2. Generic Product – Basic version of the


product

3. Expected Product – A set of attributes and


conditions that buyers normally expect and
agree to when they purchase this product .
Five Product Levels
4. Augmented Product – One that includes
additional services and benefits that
distinguish the company’s offer from
competitor’s offer .

Product augmentation leads the marketer to


look at the buyer’s total consumption system.
Five Product Levels
5. Potential Product– Namely all of the
augmentations and transformations that this
product might ultimately undergo in the
future.

Points to its possible evolution .


The Product Hierarchy
• Need family -Security

• Product family – Savings and Income

• Product class- Financial Instruments

• Product line – Life Insurance

• Product type – Term – life

• Brand - LIC

• Item (stock keeping unit or product variant )


Product Classification
• Durability and Tangibility

▫ Nondurable goods

▫ Durable goods

▫ Services
Product Classification
• Consumer – Goods Classification

▫ Convenience goods - goods that the


customer purchases frequently , immediately
and with a minimum of effort. E.g. include
tobacco products, soaps and newspapers
Product Classification
• Consumer – Goods Classification

▫ Specialty goods - goods with unique


characteristics or brand identification for
which a sufficient number of buyers make a
special purchasing effort. E.g. include cars ,
stereo components, photographic equipment,
and men’s suits
Product Classification
• Consumer – Goods Classification

▫ Shopping goods - goods that the customer


in the process of selection and purchase,
characteristically compares on such bases as
suitability, quality, price and style. Example
include furniture, clothing, used cars and
major appliance .
Product Classification
• Consumer – Goods Classification

▫ Unsought goods are goods that the customer


does not know about or does not normally
think of buying - smoke detectors . Classic
examples: cemetery plots, gravestones. It
require advertising and personal selling
support.
Product Classification
• Industrial – Goods Classification
▫ Material and Parts are goods that enter the
manufacturer’s product completely. raw materials,
manufactured materials and parts.

▫ Raw materials e.g.,farm products and natural


products.

Manufactured materials and parts such as


component materials and component parts.
Product Classification
• Industrial – Goods Classification
▫ Capital items -- long-lasting goods that
facilitate developing or managing the finished
product. They include installations and
equipment. Installations consist of buildings
(factories, offices and office equipment.

▫ Equipment comprises portable factory


equipment and tools.
Product Classification
• Industrial – Goods Classification

▫ Supplies and business services


Product Differentiation
• Form • Durability

• Feature • Reliability

• Performance quality • Repairability

• Conformance quality • Style


Design: The Integrative Force
• Product looks & functions

• Give a company its competitive edge

• Important in making & marketing retail services,

apparel , packaged goods and durable equipment


Services Differentiation

• Ordering Ease

• Delivery

• Installation

• Customer training

• Customer consulting

• Maintenance and repair


Product Mix
• A product mix (also called product assortment)
is the set of all products and items that a
particular seller offers for sales
Product Mix
• A company’s product mix has a certain width,
length, depth and consistency.
▫ The width of a product mix refers to how many
different product lines the company carries.

▫ The length of a product mix refers to the total


number of items in the mix.

▫ The depth of a product mix refers to how many


variants are offered of each product in the line
Product Mix
▫ Consistency of the product mix refers to how closely
related the various product lines are in end use,
production requirements, distribution channels or
some other way.

These four product –mix dimensions permit the


company to expand its business in four ways. It can
add new product lines, lengthen each product,
deepen its product mix and a company may pursue
product line consistency
Product Line Analysis
Sales and Profit
• Core product

• Staples

• Specialties

• Convenience items
Product Line Stretching
Line stretching: Line stretching occurs when a
company lengthens its product line beyond its
current range. The company can stretch its line
down market , up market or both ways.
Product Line Stretching
• Down – market stretch

• Up- market stretch

• Two way stretch


Product Line Stretching
• Down – market stretch
1. The company may notice strong growth
opportunities in the down –market as mass
retailers such as Wal-Mart.
2. The company may tie up with lower end
competitors who might otherwise try to move
up -market.
3. the company may find that the middle market
is stagnating or declining.
Product Line Filling

• Product Line Filling is the process of adding a


new product within the current range
of an incomplete line.

Line Modernization, Featuring and


Pruning
Product Mix Pricing
• Product line pricing

• Optional feature pricing

• Captive product pricing

• Two part pricing

• By- product pricing

• Product bundling pricing

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