MANAGING
PRODUCTS
Dr. Vesselin Blagoev
31/01/2012 1
What is a product ?
Anything that can be offered to a
market for attention, acquisition or
consumption including physical
objects, services, personalities,
organizations and desires
Anything that the consumer receives
that is of value in terms of perceived
need, want or satisfaction
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Product
Israel. In Café Ke‟ilu (Café Make Believe)
you get no food. What you are served is an
empty plate and an empty mug against $3
during the week and $6 on weekends. Manager
Nir Caspi said: “…people come to cafes to be
seen and to meet people, not for the food.”
An expert says: “What consumers really
want is [offers] that dazzle their senses, touch
their hearts, and stimulate their minds.”
Source: Kotler and Armstrong (2004)
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Continuum of product
offerings
All products/
Physical product
offerings Services
items include
an element
of „service‟
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Types of product
Accordingto Ph.Kotler there are 4
categories of products:
Pure services (consulting)
A major service wit accompanying
minor goods and services (education)
A tangible good with accompanying
services (PC in a network)
Pure tangible products (lipsticks)
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Possible Blends of Physical
Goods and Services
100% Canned soup, nails, steel pipes
Physical good emphasis
Restaurant meals, car
service
Financial and
postal
services
31/01/2012 Service emphasis 100 % 6
Services
Intangibility: it can not be experiences
in advance of purchase
Lack of ownership
Inseparability: it takes place at the
same time as its delivery
Perishability: Services can not be
stored or kept
Variability: each delivery is unique, no
standardization of output
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Products
Consumer products Business products
Installations
Convenience
Staples
products Accessories
Homogeneous Farm products
Shopping products Heterogeneous Raw materials Natural …
Components Parts
Materials
Specialty products
Professional services
New unsought Operating &
Unsought products Regularly … Supplies Repair
(life insurance) supplies
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Shares, bonds
Product
Product idea Package Brand
Physical good
• Features • Protection Type of brand:
• Quality level • Promotion
• Stile • Individual
• Accessories
• Second function • Family
• Installation
• Instructions • Manufacturer
• Dealer
• Warranty
• Product line
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Product differentiation
Augmented
product Expected
Delivery, credit, product
installation,
consulting, Physical
guarantee, after Core characteristics,
sale service quality, design,
product style, price,
brand, packing
Potential
product
Image, recognition,
recommendation
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Product differentiation
The core product: the essential elements
of the product/service
The expected product: what customers
have come to expect as normal addition to
the product
The augmented product: the features
that go beyond the normal customers
expectation
The potential product: something else
which customers could see as beneficial 11
31/01/2012
Product mix
Value
Price Non-price
Perceived
quality
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Hospitality product
The hospitality product can be
defined as the set of satisfactions
and dissatisfactions which a
customer receives from a
hospitality experience. The
satisfactions may be physiological,
economic, social, and psychological.
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Hospitality product
Accommodation
Reservation system simplicity Baggage handling
Acknowledgement of Discounts on club referrals, etc.
reservations
Reservation system convenience Pet/child care
Room service Provision for disabled
Standard of housekeeping Lift attendants
Courtesy Group accommodation
Procedures for handling Cleaning/laundry
overbooking
Information services Credit provisions
Customer recognition
31/01/2012 Willingness to bill later 14
Hospitality product
Food and beverage
Speed of food service Variations in portions
Ordering convenience Home deliveries
Complaints procedures Non-available menu items
Advance reservations Fibre/calorie information
Reliability of food/beverage Provision of ‘doggy-bags’
quality
Advice on wines Function-catering facilities
Provision of special foods Quality of table appointments
Cooking to order Entertainment
Acceptance of credit cards
31/01/2012 Privacy/discretion 15
Hospitality product
The components of
atmosphere
Noise level Age, sex dress, appearance
of staff
Table appointments Cleanliness
Nationality of restaurant Other customers
Layout of seating Temperature
Type of seating Color
Size /shape of room Illumination
Comfort
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Product lifecycle (PLC)
Introduction Growth Maturity Decline
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( Saturation )
Market conditions during the
PLC
Condition Introduction stage
Market growth Slow
Market penetration Low
Market segmentation Aimed at risk takers
Differentiation (for a Unique product, (for a
radical new prod) favorable differentiation)
Number of brands Few
Number of competitors None, or few
(if a „me too’ product)
Industry capacity
31/01/2012 Low 18
Market conditions during
the PLC
Condition Growth stage
Market growth Fast acceleration
Market penetration Fast acceleration
Market segmentation High
Differentiation (for Decreased
a radical new prod) differentiation
Number of brands Increasing
Number of competitors Growing
Industry capacity High and rapidly
increasing as profit
31/01/2012 opportunities noted 19
Market conditions during
the PLC
Condition Maturity stage
Market growth Leveling
Market penetration Higher
Market segmentation Highest
Differentiation Improved products
are marketed; often
unfavorable
differentiation
Number of brands Highest
Number of competitors Many
Industry capacity
31/01/2012 Optimal 20
Market conditions during
the PLC
Condition Decline stage
Market growth Decline
Market penetration Highest
Market segmentation High
Differentiation Often
unfavorable
differentiation
Number of brands High dropout rate
Number of competitors High dropout rate
Industry capacity
31/01/2012 Overcapacity 21
Branding
Branding is the process by which
companies distinguish their product
offerings from the competitors
The brand is created by developing a
distinctive name, design and packaging.
Some brands are supported by logos.
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Brand
A name, term, design,
symbol, packaging, logo or
any other feature that
identifies one seller‟s good or
service as distinct from those
of other sellers
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Brand name
That part of a brand that
can be spoken, including
letters, words or numbers
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Brand mark
The element of a brand
that cannot be spoken,
often a symbol or design
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Trademark
Legal designation
indicating that the owner
has exclusive rights to use
the brand name
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Brand types
Manufacturers‟ brands
Own-label (private) brands
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Brand types
Categories, brands and
variants
e.g.
Category soup
Brand A Brand B Brand C
e.g. Heinz
Variants Variants Variants
A1 A2 A3 B1 B2 B3 C1 C2 C3
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e.g. tomato
Types of brands
Generic brands – no brand at all
Manufacturer brands
Own label, also called Private brands or
Dealer brands
Individualbrands
Family brands
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Types of brands
Individual branding: A policy of naming
each product differently (P&G – Tide, Bold, Daz,
Dreft)
Overall family branding: Microsoft,
Heinz
Line family branding: GM, Colgate-
Palmolive
Brand extension branding: An existing
brand name is used as a part of a new one
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Brand recognition
A customer‟s awareness
that a brand exists and is
an alternative to purchase
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Brand loyalty
A strongly motivated and
long standing decision to
purchase a particular
product or service
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Brand preference
The degree of brand
loyalty in which a
customer prefers one
brand over competitive
offerings
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Major elements of
brand equity
Brand name Brand
awareness loyalty
Brand equity
Perceived
Brand
Brand
associations
loyalty
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Creating a brand
Core
product
Service Guarantees
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Brand potential
Branding successful
brands
Quality Positioning
Well-blended
communications Brand Repositioning
building
Being first Long-term
Internal perspective
marketing
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Global branding decisions
Brand form
•Quality
Brand additionals
•Formulation •Delivery
•Design •Service
•Variants •Guarantees
Global
branding
Brand communications
•Name
•Execution
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•Packaging 37
Brand name strategies
Family brand names
Used for all products, e.g. Philips,
Heinz, Del Monte
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Brand name strategies
Combination brand names
A combination of family and
individual brand names is developed
on the reputation of the company +
allowing the individual brands to be
distinguished and identified, e.g.
Mercedes C300, Microsoft Word
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Brand name strategies
Brand extension, e.g. United
Distillers uses Johnnie Walker for
different liqueurs
Brand stretching, e.g. Bic
(disposable pens) brand name is used
on lighters, razors, perfumes and
women‟s tights
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Brand name considerations
A good brand name should:
Evoke positive associations
Be easy to pronounce and remember
Suggest product benefits
Be distinctive
Use numerals when emphasizing
technology
Not infringe an existing registered
brand name
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