Elements of Product Planning for Goods and Services
Elements of Product Planning for Goods and Services
Learning Objectives
At the end of this presentation, you should be able to:
Understand what “Product” really means.
Cite the key differences between goods and services.
Describe how technology augments a product to add value for customers.
Understand what branding is and how to use it in strategy planning.
Understand the importance of packaging in strategy planning.
Know the differences among various consumer and business product classes and how product classes can help a marketing manager plan marketing strategy.
Understand important new terms.
What Is a Product?
Definition of Product: A product is defined as the need-satisfying offering of a firm. It encompasses the entire customer experience.
This definition highlights that products are not merely items on a shelf but a comprehensive solution to consumer needs, incorporating quality, branding, and customer interactions.
Product Quality and Customer Needs
Product Quality: Refers to the ability of a product to satisfy a customer’s needs or requirements. It is crucial in establishing the value of the product in the eyes of consumers.
Product Assortment, Line, and Individual Product
Product Assortment: The collection of different products offered by a company, such as Coca-Cola’s wide range of beverages.
Product Line: A group of related products under a single brand sold by the same company.
Individual Product: The specific item within a product line, distinguished by characteristics like quality, size, and price.
Goods vs. Services
Major Differences Between Goods and Services:
Tangible vs. Intangible: Goods are tangible and can be touched, while services are intangible and cannot be physically touched. Customers often rely on recommendations or tangible features when evaluating services.
Production Location: Goods are typically produced in factories distant from consumers, whereas services are produced locally and often in the presence of the customer, emphasizing the need for well-trained personnel.
Perishability: Goods are non-perishable, while services are perishable, emphasizing the need for effective management of supply and demand for services, as well as managing customer wait experiences.
Technology's Role in Product Enhancement
Value Addition through Technology: Technology and intelligent agents are crucial in augmenting products, adding features that enhance the overall customer experience and perceived value.
Branding
Definition of Branding: Branding entails using a name, term, symbol, or design to identify a product. It can include a combination of these elements to create a memorable identity.
Examples: Recognized trademarks and symbols play an essential role in promoting products in the marketplace.
Conditions Favorable to Branding
Product Quality: High-quality products enhance brand value.
Dependable Labeling: Easy to label and identify products contributes to brand awareness.
Widespread Availability: Products that are readily available on store shelves or online tend to perform better in branding efforts.
Economies of Scale: Larger production can lead to lower costs, allowing brands to maintain higher prices or invest more in branding.
Brand Familiarity and Its Importance
Brand Familiarity: Levels of brand awareness range from brand non-recognition to brand evangelism.
Brand Evangelism: A state where customers actively promote a brand due to strong loyalty.
Apple as an Example: High brand recognition and insistence demonstrated by customers queuing for new products.
Characteristics of a Good Brand Name
A good brand name should be easily memorable, pronounceable, and capable of conveying the product’s benefits or qualities effectively.
Protecting Brand Names and Trademarks
Lanham Act: Legal protection of trademarks to prevent counterfeiting.
Cultural Considerations: Acceptance of counterfeiting may vary by culture, raising ethical considerations in branding practices.
Types of Branding Strategies
Family Brand: A brand applied to multiple products.
Licensed Brand: A brand licensed to another manufacturer.
Individual Brand: Specific products under distinct names.
Generic Brand: No brand name and often less expensive.
Manufacturer Branded vs. Dealer Brands: Differentiates between products branded by manufacturers and those offered by retailers as their own brands.
Packaging
Functions of Packaging: Packaging serves three primary purposes: promoting the product, protecting it during distribution, and enhancing usage.
Innovative Packaging Examples: Heinz’s cap-on-the-bottom ketchup bottle is designed for better usability and cleanliness.
Socially Responsible Packaging
Fair Packaging and Labeling Act: Ensures that packaging is transparent and fair, while also considering the environmental impact.
Ethics in Packaging: Companies must navigate ethical decisions regarding packaging to address environmental concerns.
Product Classes and Marketing Management
Consumer Products and Business Products: All products are classified into two broad categories based on the intended customer.
Consumer Product Classes:
Convenience Products: Everyday items easy to access.
Shopping Products: Require comparison before purchase.
Specialty Products: Unique offerings with brand loyalty.
Unsought Products: Items consumers do not actively seek but may purchase in certain situations.
Classifications of Consumer Products
Staples: Everyday items used regularly.
Impulse Products: Spontaneous buys, often placed in high-traffic areas.
Emergency Products: Needed immediately, often at a premium price.
Homogeneous Shopping Products: Similar in nature, where price is a key differentiator.
Heterogeneous Shopping Products: Different based on attributes, presentation, or brand, leading to careful comparison by consumers.
Key Terms
Product: The offering satisfying customer needs.
Quality: Ability to fulfill customer requirements.
Warranty: Assurance of the product's longevity and reliability.
Product Line: A collection of related products offered by a company.
Brand Name: The name given to a product by the company.
Trademark: Registered symbol identifying a product or service.
Brand Familiarity: The extent to which consumers recognize and remember a brand.
Consumer and Business Products: Distinct categories based on target markets.
Further Concepts
Augmented Reality (AR): Technology enhancing user interaction with products.
Non-fungible Tokens (NFTs): Unique digital identifiers for ownership of digital goods.
Brand Equity: The value added to a product through brand recognition and customer loyalty.
Battle of the Brands: Competitive rivalry between brands for market dominance.