Products and Branding

core product

the product's benefit to the consumer.

actual product

the item for sale, including the unique branding, design, and packaging that is attached to it.

augmented product

the actual product plus other supporting features such as a warranty, credit, delivery, installation, and repair service after the sale

consumer goods

goods produced for personal or family consumption

convenience goods and services

Products that the consumer wants to purchase frequently and with a minimum of effort.

shopping goods

moderately expensive, infrequently purchased physical goods

Specialty Goods

goods that are not mass-produced but rather assembled individually or in small quantities

unsought products

items that the consumer does not know about or knows about but does not initially want

equipment

the necessary items for a particular purpose

MRO supplies

maintenance, repair, and operating items that facilitate production and operations but do not become part of the finished product

raw materials

Unprocessed natural products used in production

component parts

either finished items ready for assembly or products that need very little processing before becoming part of some other product

specialized services

services that are essential to the operation of an organization but are not part of the production of a product

processed materials

products created when firms transform raw materials from their original state

durable goods

goods that last for a relatively long time, such as refrigerators, cars, and DVD players

non-durable goods

goods that last a short period of time, such as food, light bulbs, and sneakers

product line

A group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations

product mix

all products that an organization sells

continuous innovation

a modification of an existing product that sets one brand apart from its competitors

discontinuous innovation

a totally new product that creates major changes in the way we live

dynamically continuous innovation

a change in an existing product that requires a moderate amount of learning or behavior change

idea generation

the systematic search for new product ideas

business analysis

a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives

technical development

the step in the product development process in which company engineers refine and perfect a new product

test marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation

commercialization

introducing a new product into the market

venture team

a cross-functional group that creates entirely new products that may be aimed at new markets

skunkworks

a group of intrapreneurs who are deliberately separated from the normal operation of an organization to encourage them to devote all their attention to developing new products

product adoption

the process by which a consumer or business customer begins to buy and use a new good, service, or idea

relative advantage

the degree to which a consumer perceives that a new product provides superior benefits

complexity

the degree to which consumers find a new product or its use difficult to understand

compatibility

A state in which two things are able to exist or occur together without problems or conflict.

Trialability

the degree to which a product can be tried on a limited basis

observability

how visible a new product and its benefits are to others who might adopt it

Innovators

those buyers who want to be the first to have the new product or service

early adopters

People who adopt new products early, choose new products carefully, and are viewed as "the people to check with" by later adopters

Early Majority (34%)

more risk averse, deliberate, many informatl social contacts Wait until bugs are worked out.

Few new products can be profitable until this large group buys them.

Late majority (34%)

skeptical, below average social status

Laggards (16%)

consumers who like to avoid change and rely on traditional products until they are no longer available

opinion leaders

individuals who exert direct or indirect social influence over others

full line strategy

large number of variations in a product line

limited line strategy

fewer product variations, can improve the firm's image if consumers perceive it as a specialist with a clear, specific position in the market

upward stretch

When a company lengthens its product line with more prestige products

downward stretch

When a company lengthens its product line with lower end products just to keep away competitors

two-way stretch

companies serving the middle market might stretch their line in both directions

cannibalization

the loss of sales of an existing brand when a new item in a product line or product family is introduced

product mix

all products that an organization sells

Product Life Cycle

The stages through which goods and services move from the time they are introduced on the market until they are taken off the market.

introduction stage

the PLC stage in which a new product is first distributed and made available for purchase

growth stage of product life cycle

Characteristics:

•Rapid increases in sales

•Competition appears

•Profit peaks

•Advertising shifts to selective demand.

•Sales grow at an increasing rate because of new people trying the product and repeat purchasers bought again.

•Changes appear..."New and Improved!"

maturity stage of product life cycle

Total industry sales slow, and marginal competitors begin to leave the market. Sales increase at a decreasing rate, and most consumers who would buy the product are either repeat purchasers of the item or have tried and abandoned it. Fewer new buyers enter the market.

Marketing actions are focused on maintaining market share through product differentiation and finding new buyers.

-Examples: Soft drinks and DVD players.

decline stage

stage of the product life cycle when sales decline and the product eventually exits the market

fad

something that is very popular for a short time, then forgotten

fashion

a currently accepted or popular style in a given field

staple goods

Consumer goods (such as bread, milk, paper, sugar) that are bought often and consumed routinely. Staples offer little differentiation and are usually compete on the basis of price.

brand

a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products

brand name

that part of a brand that can be spoken, including letters, words, and numbers

brand mark

the part of a brand that is not made up of words, such as a symbol or design

trade name

The commercial name given to a drug product by its manufacturer; also called the proprietary name.

trade mark

a symbol, word, or words legally registered or established by use as representing a company or product.

brand anthropomorphism

Giving non-humans both human form and human-like traits

logo

a symbol or design that serves to identify an organization or institution

trade dress

the image and overall appearance of a product

generic usage

Occurs when a trademark becomes synonymous with the product category

counterfeiting

Illegal uses of intellectual property, patents, trademarks, and copyrights.

brand equity

the differential effect that knowing the brand name has on customer response to the product or its marketing

family branding

marketing several different products under the same brand name

individual branding

using different brand names for different products

generic brand

A brand that represents a general product category and does not carry a company or brand name

national brands

brands owned by manufacturers and distributed nationally

private-label brands

Brands developed and marketed by a retailer and available only from that retailer; also called store brands.

co-branding

the practice of using the established brand names of two different companies on the same product

Licensing

the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge

packaging

The technology and the art of enclosing or protecting products for distribution, storage, sale, and use.

labeling

providing identifying, promotional, or other information on package labels

Fair Packaging and Labeling Act

Passed in 1966, this required all consumer products to have true and informative labels. Directs the FTC and the FDA to issue regulations requiring that all "consumer commodities" to be labeled to identify the commodity, the name and place of production, and the net quantity of contents. The purpose is to facilitate value comparisons and prevent unfair or deceptive labeling practices

Nutritional Labeling and Education Act

-Sets legal definitions for terms like fresh, light, low fat, and reduced calorie

-Sets standards for serving sizes

- creates the Nutrition Facts on the label of products

-Requires labels to show food value for one serving alongside the total recommended daily value as established by the National Research Council

Universal Product Code (UPC)

bar code printed on a label that links to information about the item to which it is attached

intangibility

the inability of services to be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed

Perishability of Services

services cannot be stored for later sale or use

variability of services

quality of services depends on who provides them and when, where, and how

Inseparability

services cannot be separated from their providers

Services

intangible products, consumed at the same time they are produced