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What is a Product?
• Anything that can be offered to a market for attention,
acquisition, use, or consumption and that might satisfy a
want or need.
– Includes: physical objects, services, events, persons,
places, organizations, ideas, or some combination
thereof.
Lähde: Kotler-Armstrong, Principals of
Marketing
Levels of a Product
Lähde: Kotler-Armstrong, Principals of
Marketing
What is a Product? BMW
• Augmented
Augmented
Actual
Core
– Social status
– Brand name
• Actual
– Luxuriant car
– Stereo, trim, engine size
– Showroom
• Core
– Transport for one or more
people
Lähde: Kotler-Armstrong, Principals of
Marketing
Individual Product Decisions
Lähde: Kotler-Armstrong, Principals of
Marketing
Product and Service
Attributes
• Quality LAATU
– Performance and satisfaction includes level and consistency
• Features OMINAISUUDET
– Differentiates a product from the competition; assessed
based on value and cost
• Style and Design TYYLI JA DESIGN
– Style = Appeareance
– Design = heart of the product
Lähde: Kotler-Armstrong, Principals of
Marketing
Branding
• Creating, maintaining, protecting, and enhancing
products and services.
• A brand is a name, term, sign, symbol, or design, or a
combination of these, that identifies the maker or seller
of a product or service.
Lähde: Kotler-Armstrong, Principals of
Marketing
Branding
• Advantages to buyers:
– Product identification
– Product quality
• Advantages to sellers:
– Basis for product’s quality story
– Provides legal protection
– Helps to segment markets
Lähde: Kotler-Armstrong, Principals of
Marketing
Packaging
• Designing and producing the container or wrapper
for a product.
• Developing a good package:
–
–
–
–
Packaging concept
Package elements
Product safety
Environmental concerns
Lähde: Kotler-Armstrong, Principals of
Marketing
Labeling
• Printed information appearing on or with the
package.
• Performs several functions:
– Identifies product or brand
– Describes several things about the product
– Promotes the product through attractive graphics
Lähde: Kotler-Armstrong, Principals of
Marketing
Product Support Services
• Assess the value of current services and obtain
ideas for new services.
• Assess the cost of providing the services.
• Put together a package of services that delights the
customers and yields profits for the company.
Lähde: Kotler-Armstrong, Principals of
Marketing
Product Lines
• What is a Product Line?
– A group of products that are closely related because
they function in a similar manner, are sold to the same
customer groups, are marketed through the same
types of outlet, or fall within given price ranges
• Example Product Lines
– Toyota cars
– iPods
– Coke – cans, multi-packs, bottles (glass/plastic)
Lähde: Kotler-Armstrong, Principals of
Marketing
Product Line Decisions
Product Line Length
- Number of items in the product line
Stretching
Lengthen beyond
current range.
- Downward
- Upward
- Both
directions
Filling
Lengthen within
current range.
Lähde: Kotler-Armstrong, Principals of
Marketing
Product Mix Decisions
• Product Mix: all of the product lines and items
that a particular seller offers for sale.
• Width: the number of different product lines the
company carries.
• Depth: the number of versions offered of each
product in the line.
• Consistency: how closely related the various
lines are.
Lähde: Kotler-Armstrong, Principals of
Marketing
Brand Equity
• The positive differential effect that knowing the
brand name has on customer response to the
product or service.
• Provides:
– More brand awareness and loyalty
– Basis for strong, profitable customer
relationships
Lähde: Kotler-Armstrong, Principals of
Marketing
Major Brand Strategy
Decisions
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Marketing
Brand Name Selection
•
Desirable qualities for a brand name include:
1. It should suggest product’s benefits and qualities
2. It should be easy to pronounce, recognize, and
remember
3. It should be distinctive
4. It should be extendable
5. It should translate easily into foreign languages
6. It should be capable of registration and legal
protection
Lähde: Kotler-Armstrong, Principals of
Marketing
Brand Sponsorship
• Four options / NELJÄ VAIHTOEHTOA
– Manufacturer’s brands
– Co-branding
– Private brands
– Licensed brands
Lähde: Kotler-Armstrong, Principals of
Marketing
Branding Strategies
Product Category
Existing
New
Line
Brand
Extension
Extension
New
Brand Name
Existing
Multibrands
New Brands
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Marketing
Line Extension
• Same Brand Name – Additional Items
– New flavours
– New sizes – Family/fun size
– Ingredients – fat-free, vitamins
• This is by Far the Most Common Branding Activity
– Safety – an understood market
– Meets customer demands for variety
• Problems
– Can dilute focus of the brand
– Coke – regular, can, bottle, diet, diet with lemon, diet with
vanilla or cherry?
Lähde: Kotler-Armstrong, Principals of
Marketing
Brand Extension
• Using a Successful Brand Name to Launch a New Product
– Fairy Liquid – Fairy Detergent
– Sony TV – Sony Playstation
• Can Fail
– Heinz Soup – Heinz pet food
– Porsche Cars – Porsche Toasters
• Some Brands Stretch Further than Others
– Virgin – rail, mobile phones, air, music, cola
• The Extension MUST be Compatible with the Original
Product/Associations
Lähde: Kotler-Armstrong, Principals of
Marketing
Multibrands
• Where the Focus is on the Brand, Not the Manufacturer
– Lever – Persil, Surf, Radion
– Tends to happen where the firm has more than one brand in the
same market
• Product Families
– Some firms have brands for ranges of their products
– Families grouped together by price/quality etc
– Matsushita - Technics, National, Panasonic
• Drawbacks
– Cannibalisation
– Can be very costly
Lähde: Kotler-Armstrong, Principals of
Marketing
New Brands
• Toyota and Lexus
– To create differentiation between the brands
– To increase the gap in perception
– Toyota=Mass market - Lexus=Luxury
• Brand Proliferation
– Can cause weakness across the portfolio
– Megabrand strategies – only the strongest receive
investment
• Fighter Brands
Lähde: Kotler-Armstrong, Principals of
Marketing
Major Stages in New-Product
Development
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Marketing
Concept Development and
Testing
• Product Idea: idea for a possible product that the company
can see itself offering.
• Product Concept: detailed version of the idea stated in
meaningful consumer terms.
• Product Image: the way consumers perceive an actual or
potential product.
Lähde: Kotler-Armstrong, Principals of
Marketing
Product Life Cycle
Sales and
Profits ($)
Sales
Profits
Time
Product
Development
Introduction
Growth
Maturity
Losses/
Investments ($)
Sales and Profits Over the Product’s Lifetime
Lähde: Kotler-Armstrong, Principals of
Marketing
Decline
Practical Problems of PLC
• Hard to identify which stage of the PLC the product is in
• Hard to pinpoint when the product moves to next stage
• Hard to identify factors that affect product’s movement
through stages
• Hard to forcast sales level. Length of each stafe and
shape of PLC
• Strategy is both a cause and result of the PLC
Lähde: Kotler-Armstrong, Principals of
Marketing
Maturity Stage of the PLC
• Modifying the Market: Increase the consumption of the
current product.
• How?
– Look for new users and market segments
– Reposition the brand to appeal to larger or fastergrowing segment
– Look for ways to increase usage among present
customers
Lähde: Kotler-Armstrong, Principals of
Marketing
Maturity Stage of the PLC
• Modifying the Product: Changing characteristics such as
quality, features, or style to attract new users and to inspire
more usage.
• How?
– Improve durability, reliability, speed, taste
– Improve styling and attractiveness
– Add new features
– Expand usefulness, safety, convenience
Lähde: Kotler-Armstrong, Principals of
Marketing
Maturity Stage of the PLC
• Modifying the Marketing Mix: Improving sales by
changing one or more marketing mix elements.
• How?
– Cut prices
– Launch a better ad campaign
– Move into larger market channels
– Offer new or improved services to buyers
Lähde: Kotler-Armstrong, Principals of
Marketing