ADM 2315 - CHAP 8

PRODUCT DIFFERENTIATION / WAYS TO DIFFERENTIATE

1. CORE FUNCTIONALITY

2. FEATURES

3. PERFORMANCE QUALITY

4. CONFORMANCE QUALITY

5. DURABILITY

6. RELIABILITY

7. FORM

8. STYLE CUSTOMIZATION

PRODUCT DESIGN / THE ROLE OF DESIGN IN DIFFERENTIATING

1. DESIGN

– The totality of features that affect the way a product

looks, feels, and functions to a consumer

– As competition intensifies, design offers a potent way

to differentiate and position a company’s products and

services.

2. POWER OF DESIGN

   • Is emotionally powerful

   • Transmits brand meaning/positioning

   • Is important with durable goods

   • Makes brand experiences rewarding

   • Can transform an entire enterprise

   • Facilitates manufacturing/distribution

   • Can take on various approaches

3. APPROACHES TO DESIGN

• Design is not just a phase in creating a

product, service, or application. It’s a way

of thinking that penetrates all aspects of

the marketing program so all design

aspects work together

• Design thinking: very

  data driven approach and requires

  extensive market research and

  ethnographic analysis

  • observation

  • ideation

  • implementation

PRODUCT PORTFOLIO DESIGN

1. PRODUCT PORFOLIO

– Encompasses all products offered by a company,

including various product categories and product lines

– Most products exist as a part of a company’s product

portfolio and/or product line. Each product must be

related to other products to ensure that a firm is

offering the optimal set of products to fulfill the needs

of its different customer segments.

– Eg. Apple iphone portfolio includes headphones,

cables, docks, cases, etc.

• WIDTH R: number of different product line the company carries

• LENGTH D: total number of products

• DEPTH: number of variants offered for each product in the line

• CONSISTENCY: the relationship between the different product lines

PRODUCT LINE ANALYSIS

1. PRODUCT LINE: a group of related products sold by the same company

2. PRODUCT LINE LENGTH

   • LINE STRETCHING

     • DOWN-MARKET STRETCH

     • UP-MARKET —

     • TWO-WAY —

   • LINE FILLING: adding more items within the present range. Purpose are to reach for incremental profits, satisfy dealers, utilize excess capacity, try to become the leading full-line company, plug holes to keep out compertitors

MANAGING PACKAGING

• All the activities of designing and producing the container for a product

• Packaging is important because it is the buyer’s first encounter with the product. A good package draws the consumer in and encourages product choice. In effect, it can act as a “five-second commercial” for the product.

• It also affects consumers’ later product experiences when they open it and use what’s inside. Some packages can even be attractively displayed at home. Distinctive packaging like that for Kiwi shoe polish, Altoids mints, and Absolut vodka is an important part of a brand’s equity.

• Used as a marketing tool

– Self-service-package must perform many sales tasks: attract attention, describe the product’s features, create consumer confidence, and make a favorable overall impression.

– Consumer affluence-consumers are willing to pay a little more for the convenience, appearance, dependability, and prestige of better packages.

– Company and brand image-consumers are willing to pay a little more for the convenience, appearance, dependability, and prestige of better packages.

– Innovation opportunity-Unique or innovative packaging can bring big benefits to consumers and profits to producers. Companies are always looking for a way to make their products more convenient and easier to use—often charging a premium when they do so.

• Packaging objectives

– Identify the brand

– Convey descriptive and persuasive information

– Facilitate product transportation, protection, and storage

– Aid consumption

– Avoid wrap rage, eco friendly concerns

– Lol dolls, sun chips, Keurig

• Color

– Carries different meanings in different cultures and market segments

– Can define a brand

– Red used most often, warm, attention grabbile SALE in red. Also denotes danger

– Yellow-optimism, energy, most visible color

– Blue-trustworthy, cool

– Green-calm, eco friendly darker greens denote money

MANAGING WARRANTIES AND GUARANTEES

• Guarantee

– If a product fails to function as promised by the

company or as customers expect, the company will

provide some type of compensation to the purchaser

• Warranties

– Cover the repair or replacement of the purchased

item and usually do not allow the customer to return

the product for a refund

CAVEAT EMPTOR

= let the buyer beware

= the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.