Chapter 10: Product Concepts

Product

Everything, both favorable and unfavorable, that a person receives in an exchange. It can be tangible (goods) or intangible (services, ideas).

Convenience Product

A relatively inexpensive item that merits little shopping effort (e.g., candy, soft drinks). They normally require wide distribution to sell sufficient quantities.

Shopping Product

A product that requires comparison shopping because it is usually more expensive than a convenience product and is found in fewer stores (e.g., clothing, appliances).

Specialty Product

A particular item for which consumers search extensively and are very reluctant to accept substitutes (e.g., luxury cars, gourmet foods). Distribution is often limited.

Unsought Product

A product unknown to the potential buyer or a known product that the buyer does not actively seek (e.g., insurance, burial plots). These require aggressive personal selling and advertising.

Product Item

A specific version of a product that can be designated as a distinct offering among an organization's products.

Product Line

A group of closely related product items.

Product Mix

All products that an organization sells.

5 Benefits of Product Lines

1. Advertising economies: Several products advertised under one umbrella. 2. Package uniformity: Common, recognizable look. 3. Standardized components: Reduces manufacturing/inventory costs. 4. Efficient sales and distribution: Retailers prefer stocking full lines. 5. Equivalent quality: Perceived consistency helps all products in the line.

Product Line Extension

Adding additional products to an existing product line in order to compete more broadly in the industry.

3 Signs of an Overextended Product Line

1. Products yield poor sales or cannibalize sales of other items. 2. Resources are disproportionately allocated to slow-moving products. 3. Some products become obsolete.

Product Line Contraction

The strategic removal of items from a product line. It concentrates resources on the most important products and stops waste on poorly performing ones.

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 elements of a brand that cannot be spoken (e.g., the Nike swoosh, the Mercedes logo).

Brand Equity

The value of a company or brand name.

Global Brand

A brand that obtains at least one-third of its earnings from outside its home country, is recognizable globally, and has publicly available financial data.

Brand Loyalty

Consistent preference for one brand over all others.

Manufacturer's Brand

The brand name of a manufacturer (e.g., Coca-Cola, Apple).

Private Brand

A brand name owned by a wholesaler or a retailer (e.g., Costco's Kirkland Signature). These offer higher profit margins to the retailer.

Captive Brand

A brand manufactured by a third party for an exclusive retailer, without evidence of that retailer's affiliation.

Individual Branding

Using different brand names for different products (e.g., P&G using distinct names for Tide, Pampers, and Gillette).

Family Branding

Marketing several different products under the same brand name (e.g., Heinz Ketchup, Heinz Mustard).

Trademark

The exclusive right to use a brand or part of a brand.

Service Mark

A trademark for a service (rather than a tangible good).

3 Functions of Packaging

1. Containing and protecting products. 2. Promoting products. 3. Facilitating storage, use, and convenience.

Persuasive Labeling

A type of package labeling that focuses on a promotional theme or logo; consumer information is secondary.

Informational Labeling

A type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase.

Greenwashing

When a product or company attempts to give the impression of environmental friendliness whether or not it is environmentally friendly.

Universal Product Codes (UPCs)

A series of thick and thin vertical lines (bar codes) readable by computerized optical scanners that represent numbers used to track products.