Lecture 05 - Products

Overview of Lesson 5: Product

• Introduction to product concepts in marketing

• Recap of Lesson 4 on STP: Segmenting, Targeting, Positioning

Recap of Lesson 4

• Market Segmentation: Identifying specific segments of the market to target effectively

  • Segmentation Variables: Demographic, psychographic, behavioral

• Targeting Criteria: Market size, competition strength, company strengths and weaknesses

• Marketing Mix: Utilizing the marketing mix to address the target segment

  • Tools such as Perception Map to visualize market position of products

Lesson 5: Understanding Products

• Definition of a Product: More than just a brand name or features; includes the total product concept

• Importance of Product Life Cycle (PLC): Managing product life over time is crucial for company survival

Total Product Concept

• Core Product: The fundamental value or benefit that the product provides (e.g., water bottle's ability to hold liquid)

• Expected Product: The basic attributes consumers expect from the product (e.g., design, packaging)

• Augmented Product: Non-physical aspects that enhance the product experience (e.g., warranty, customer service)

• Future Expectations: Potential developments or derivatives of the product (e.g., technological advancements)

Importance of a Product's Core

• If the core function fails, the product ultimately fails regardless of additional features or aesthetics

• Example: A water bottle that leaks fails at its core purpose

Features and Characteristics of Products

• Product Description: Tangible characteristics that beautify the product but do not replace core functionality

• Example: RFID-blocking wallet discussed as a case study

  • Core Problem: Protecting from unauthorized scans; if it does not fulfill this, it cannot justify its price

  • Expected Characteristics: Size, material, design features

  • Augmented Features: Warranty, design enhancements that add value

Product Relationships in a Company

• Companies should manage multiple product lines; larger companies like Apple manage extensive portfolios

• Decisions must be made on maintaining product lines and discontinuing non-performing products

Product Classification

• Consumer Products: Used by individuals for personal use, categorized into:

  • Convenience Products: Purchased frequently with minimal thought (e.g., groceries)

  • Shopping Products: Higher cost and require comparison (e.g., electronics)

  • Specialty Products: Unique items with significant consumer research required (e.g., luxury goods)

  • Unsought Products: Items consumers do not actively seek (e.g., funeral services)

• Business Products: Goods used in the production of other goods, not typically sold to the end consumer

Product Life Cycle Stages

• Introduction Phase: High investment and lower returns

• Growth Phase: Increased acceptance and sales, leading to profitability

• Maturity Phase: Market saturation; must innovate to maintain interest

• Decline Phase: Products may be discontinued

• Companies aim to extend the maturity phase through product modifications and marketing

Brand and Branding Strategies

• Definition of Brand: A combination of elements including name, logo, and image that create consumer perceptions

• Brand Equity: Value of the brand based on consumer recognition and loyalty

• Brand Strategies: Various strategies companies use, including:

  • Manufacturer Brands: Products owned by the company (e.g., Coca Cola)

  • Private Labels: Store brands (e.g., NTUC own label)

  • Co-Branding: Partnership with another brand to leverage market strength

  • Brand Extensions: Using established brands for new products to capitalize on customer loyalty

Packaging and Labeling

• Functionality: Packaging protects and promotes the product

• Regulatory Compliance: Labels must accurately reflect product contents and comply with regional regulations (e.g., safety information)

Final Remarks

• Reminder of the importance of understanding product concepts in marketing

• Upcoming evaluations of group projects and product analysis assignments.

• Encouragement for students to continue engaging with the course content and stay proactive in group assignments.