Module 4A Value Creation (No product life cycle)

Core benefit

the main reason for

buying a product; what the customer is

really buying

Generic/basic product

basic version of

a product

Expected product

a set of attributes

and conditions that buyers normally

expect and agree to when they purchase

this product.

Augmented product

a product that

includes additional services and benefits that

distinguish the company’s offer from the

competitor’s offer. These normally exceed

expectations.

Potential product

all the augmentation

and transformation which this product might

undergo in the future.

FIVE LEVELS OF PRODUCT

(CUSTOMER VALUE

HIERARCHY)

Core benefit
Generic/basic product
Expected product
Augmented Product
Potential product

Need family

the core need that underlies the product family.

(e.g. health and beauty)

Product family

all the product classes than can satisfy a core

need with reasonable effectiveness. (e.g. health and beauty aids)

Product class

a group of products within a product family

recognized as having certain functional coherence. (e.g. hair care

products)

Product line

a group of products within a product class that

are closely related because they function in a similar manner or

are sold to the same customer or groups or are marketed

through the same types of outlets or fall within given price

ranges. (e.g. shampoo and conditioner)

Product type

those items within the product line that

share one of several possible forms of the product. (e.g

conditioning shampoo)

Brand

the name associated with one or more items in

the product line that is used to identify the source or

character of the item. (e.g. rejoice conditioning shampoo)

Item

a distinct unit within a brand or product line that is

distinguishable by size, price, appearance, or some

attribute. (e.g. rejoice conditioning shampoo in sachet)

Product/Brand Hierarchy

Need Family
Product Family
Product class
Product line
Product type
Brand
Item

Product

Anything that can be offered to a market for attention,

acquisition, use or consumption that might satisfy a

want or need.

According to

tangibility

CONSUMER

PRODUCT

CLASSIFICATIONS

• Durable goods

• Non-durable

• goods

• Services

According to

shopping habits

CONSUMER

PRODUCT

CLASSIFICATIONS

• Convenience goods

• Staples Shopping goods

• Specialty goods

• Unsought goods

Industrial Product

classifications

CONSUMER

PRODUCT

CLASSIFICATIONS

• Materials and parts

• Capital items

• Manufactured materials and parts

PRODUCT MIX

Set of all the product lines and items that a particular

seller offers for sale to buyers. Also called product

assortment.

Width
Length
Depth
Consistency

Product Mix is described in terms of

Width

refers to how many different product lines the

company carries

Length

refers to the number of items in its product mix

Depth

refers to how many variants are offered of each

product in the line.

Consistency

refers to how closely related the product

lines are.

Product line managers

need to know the sales

and profits of each item in the line in order to

determine which items to build, maintain, harvest

or divest.

marketer

To analyze a product line, the _____ must

know the sales and profit figures, product line

market profile (how the product is positioned

against its competitor) and product line length.

Line stretching

occurs when a company lengthens its product lines

beyond its current range.

Downward stretching or down-market stretch

The company is attacked by a competitor at the high end and

decides to counterattack by invading the competitor’s low

end.

Upward stretching or up-market stretch

entering the higher end (due to higher profits,

higher margins or to position as full-line

manufacturers)

Two way stretch

where companies serving

the middle market might decide to stretch the

line in both directions (upward and downwards).

Line Pruning Decision

dropping deadwoods.

Brand

a name, term, sign, or symbol that identifies the maker or seller of the product

Identification

Importance of branding

Brands enable

consumers to easily distinguish one

product from another.

Protection

Importance of branding

It enables the owner of the

brand name to enjoy the goodwill

associated with the name so as not to

be taken advantage by others.

Positioning

Importance of branding

It enables the owner to

communicate the benefits of his

product vis-a-vis competition.

Brand name

part of the brand which can be

vocalized

Brand mark

cannot be vocalized but

associated & recognizable

Trademark

given local protection

BRAND EQUITY

Four Levels of Attitude Towards a Brand

a. Customer has no loyalty. Customer will

change brands, especially for price reasons.

No brand loyalty.

b. Customer is satisfied. Customer is satisfied.

No reason to change the brand.

c. Customer values brand. Customer values the

brand and sees it as a friend.

d. Customer is devoted. Customer is devoted to

the brand.

BRAND IDENTITY

Intended brand meaning the want to convey

Building brand identity: name, logo, color,

tagline, symbol

BRAND POSITIONING

Where a brand stands in benefits in the minds

of the consumers relative to competitive

brands.

Better positioned if name is associated with

benefit.

BRAND PERSONALITY

the brands associated human traits. A brand can

be better positioned by associating its

name with a desirable benefit.

BRAND CHARACTERISTICS

In terms of integrity, honesty & trustworthiness

BRAND IMAGE

the way the brand is perceived by the market

BRAND ASSOCIATION

A brand will trigger many associations related to

attributes, benefits, attitudes, etc.

o The association should be examined with respect to:

1. Favorability of association

2. Strength of association

3. Uniqueness of association

BRAND STRATEGY DECISIONS

• Line extension. Existing product

category, existing name (coke

zero, life, sakto)

• Brand extension. Existing brand

name, new product (ABS CBN

Mobile)

• Multi branding. Existing product,

new brand name (UFC oil)

BRAND NAME GUIDELINES

Good brand names

Distinctive

Suggests quality

Good looking if written down, and

sounds good

Suggests benefits

Easy to pronounce

Evoke an emotion, feeling or idea

(i.e FedEx)

Must represent you

Benefits from packaging

FUNCTIONS OF LABEL

1.Identify the product/brand

• Can it attract consumers? An example

is a comparison of a four-color print

versus a black and white package

2.Grade the product

3.Promote the Product