Chapter 11 Overview Product Planning systematic decision making relating to all aspects of the development and management of a firm s products including branding and packaging Tangible or intangible forms Idea physical entity or a service or any combination of the three Should define products by o Tangible product has precise specifications sold under given description or model number o Augmented product image and service features o Generic product centers on consumer benefits broadest view focuses on what the product means to the customer A firm should learn what the product means to the consumer before further planning Inasmuch as people in various nations may perceive the same product in different generic terms Consumer Oriented Product Planning is the best Increased satisfying customers and gains a competitive edge in the marketplace Types of Products Fundamental Distinction Between Goods and Services o Goods marketing entails the sale of physical products o Service marketing encompasses the rental of goods servicing goods owned by consumers and personal services o Four distinct attributes that distinguish services from goods Intangibility Perishability Variability in quality Inseparability from the service provider o The sales of goods and services are frequently connected Consumer Products goods and services destined for the final consumer for personal family or household use shopping behavior o Could be classified as convenience shopping and specialty products depends on o Convenience those bought with a minimum of effort because a consumer has knowledge of product attributes prior to shopping and or is pressed for time Not much info accepts substitutes Marketing tasks distribution location hours mass advert store layouts and self service stores carry many brands 2 3 decisions are made in the store o Shopping those for which people feel they lack sufficient information about product alternatives and their attributes thus need to acquire more knowledge consumers exert effort because of infrequency of purchase expensive require comparisons Marketing tasks full assortments availability of sales personnel competitive advantages info ads brands warranties follow up service Attribute or Priced based Attribute consumers get info on features performance Price people feel the choices are similar and shop for low prices o Specialty products that are of particular brands firms and persons to which consumers are loyal People are fully aware of the product Substitutes are not an option Pay above average prices for them Marketing tasks maintaining attributes reminder ads distribution brand extension to related products Good segmentation overall Industrial Products goods and services purchased for use in the production of other goods or services in the operations of a business or for resale to other consumers o Customers manufact whole retail gov t non profit o Installations capital goods used in production process Expensive last many years Direct selling to purchaser negotiations on features and terms comp services o Accessory movable goods that require moderate decision making less costly than installations strong distribution channel o Raw materials component materials and fabricated parts used in production or apart of the final products Expensed items limited decision making low costs Component materials semi manufactured goods that undergo changes Fabricated products w o changes in form Marketing tasks quality continuity distribution delivery reorders long o Industrial supplies convenience goods used in a firm s daily operations Low cost little decision making consumed fast do not become a part of term contracts finished product Marketing availability promptness and ease of ordering o Industrial services maintenance and repair services and advisory services Maintenance little decision inexpensive consumed fast May become a part of final product Marketing consistency and efficient service Advisory moderate to high decision ongoing costs moderate to low Marketing image and expertise logical reasons to use them Elements of a Product Mix Product item a specific model brand or size of a product that a company sells Product line related product items Product mix all the different product lines a firm offers Product Mix can be described as o Width number of product lines Wide diversify products Narrow lower resource investments and no expertise o Depth number of product items in product line Deep satisfy many customers Shallow low inventory costs o Consistency based on the relationship among product lines in terms of their sharing a common end use distribution outlets consumer groups and price range More consistent is easier to manage Product Management Organizations Marketing manager system an exec is responsible for overseeing a wide range of marketing functions and for coordinating with other departments that do marketing related activities o Works well in firms with a line of similar products or one dominant line small firms Product brand manager system a level of middle managers each of whom is responsible for planning coordinating and monitoring a single product brand or a small group of products brands o Works well with many distinct brands o Lack of authority for the product manager and inadequate attention to new products Product planning committee staffed by high level executives from various functional areas in a firm o Lets management have input into decisions o Committee meets irregularly and passes projects on to line managers o Best used as a supplement New Product manager system product managers supervise existing products and new product managers develop new ones o Ensures best results for new product planning o Once introduced handed down to existing product manager o Costly conflicts discontinuity when introduced Venture Team a small independent department in a firms that has a broad range of specialists who are involved with new product planning o Solid decision proper resources flexible o Expensive to form and operate May just use a combination of sorts if that fits Products Positioning maps out consumer perceptions of product attributes Competitive product positioning people s perceptions of a firm relative to competitors Ideal points the most preferred attributes o Goal viewed as more ideal Company product positioning people s perceptions of that firm s diff brands within the same product line and the relationship of those brands to each other Branding Brand
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