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- a product may be defined as everything with favorable and unfavorable, that a person receives in an exchange -it may be a tangible good (shoes) or a service, to an idea ("no litter") or a combinations of these 3 -the product offering is the starting point in creating a marketing mix

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What is a product.

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-business or customer, depending on the buyers intentions; the difference between c and B is the intended use. sometimes a product can be both -business product: used to manufacture other goods and services, to facilitate an organization's operations or to resell to other customers -consumer product: is Bought to satisfy an individuals personal wants and needs.

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different types of products.

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- Convenience -shopping -speacialty -unsought

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Types of Consumer Products

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-a relatively inexpensive item that merits little shopping effort- that is a consumer is unwilling to shop extensively for such an item, -consumers buy convenience product regularly, usually without much planning -consumers do know the brand names of popular convenience products, -convenience products normally require wide distribution in order to sell sufficient quantities -Candy, soft drink, spin, small hardware items, dry cleaning and car washes

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Convenience

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-more expensive than convenience products and is found in fewer stores -consumers usually buy a shopping product only after comparing several brands or stores on style, practical, price, and lifestyle compatibility -consumer is willing to invest some effort into this process to get the desire benefit -two types of shopping products: homogenous and heterogeneous -homo: basically similar-washer, dryers, refrigerators; shop for the lowest prices -heter: essentially different- clothing, furniture, housing, school; finding the best product or brand for you

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Shopping products

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-when consumer search extensively for a particular item and are very reluctant to accept substitutes -marketers use selective, status-conscious advertising to maintain exclusion image -distribution is often limited to one or a very few outlets in a geographic area -omega watches, rolls-royce and forms of medical care

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Specialty products

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- a product unknown to the potential buyers or a known product that the buyer does not actively seek -new products fall into this category until advertising and distribution increase consumer awareness of them -some products are always marketed as unsought items, like products we do not like to think about or care to spend money on -insurance, burial plots; require aggressive personal selling and highly persuasive advertising

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Unsought products

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-a specific version of a product that can be designated as a distinct offering among an organization's products -example: Campbell's Cream of Chicken soup

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Product item

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-a group of closely related product items -the category called "soups" represents one of campbell's product line -different container sizes and shapes also distinguish items in a product line -example: diet coke is available in a can or plastic container, each size and each container are separate product items

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Product line

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-includes all the product the company sells -example: all Campbell's products- soups, sauces, frozen entrees, beverages and biscuits- constitutes its product mix -each product item in the product mix may require a separate marketing strategy -sometimes product lines and even entire the product mixes share some marketing strategy components

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Product mix

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• Achieve economies of scale in advertising • Utilize package uniformity • Utilize standardized components • Achieve efficient sales and distribution • Develop perception of equivalent quality

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Organization's develop product line to...

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-PMW: refers to the number of products lines a organization offers. -example: Campbell's products mix is 5 product lines -PLD: the number of product items in a product line -Example: 3 types of sauces

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Product mix width vs Product line depth

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1. Modifying existing products 2. Repositioning existing products 3. extending product lines 4. Product line contraction

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Over time firm make adjustments by

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-Quality modifications: change in a product dependability or durability; reducing quality may lower the price and increasing the price can help firm compete with rival firms -Functional modifications: change in a product's versatility effectiveness, convenience or safety o Changing men swim shorts -Styles modifications: aesthetic product change rather than a quality or functional change o Clothing and auto manufacturers use this to motivate customers to replace products before they are worn out

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Types of product modifications

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-occurs when the company's management decides to add products to an existing product line in order to compete more broadly in the industry -when too many products are added, a product line is overextended; products line can be overextend when: --some products do not contribute to profit b/c of low sales or cannibalize sales of other items -- manufacturing or marketing resources are disproportionately allocated to slow-moving products --some items are obsolete b/c of new products entries in the line or new products offered by competitors

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Product line extensions

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-changing consumers perception of a brand -Products are repositioned when: • When sales are stagnate or declining • To correct an initial positioning mistake • To accommodate changes in demographics or social trends

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Repositioning

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-contracting product lines is a strategy way to deal with overextension 1. benefits: resources become concentrated on the most important products 2. mangers no longer waste resources trying to improve the sales and profits of poorly performing products 3. new product items have a greater change of being successful because more financial and human resources are available to manage them

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Extending / contracting existing product lines

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1. Identify its products 2. Stimulates repeat sales 3. Stimulate new product sales

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Branding enables a firm to

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-a name, term, symbol, design, or combinations thereof that identifies a seller's products and differentiates them from competitors product

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Brand

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-that part of a brand that can be spoken, including letter, words, and numbers -elements of a brand that cannot be spoken is the brand mark

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Brand name

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-refers to the value of a company or brand name -a brand that has high awareness, provoked quality, and brand loyalty among customers has high equity-a valuable asset indeed -

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Brand equity

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- a consistent preference for one brand over all others, is quite high in come product categories

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Brand loyalty

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-the brand name of a manufacturers -sometimes called a national brand, -using manufacturers brand precisely defines the brand's owner

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Manufacturers brand

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-a brand owned owned by a wholesalers or a retailer -a private brand ties the customers to the wholesaler or retailer -Target's Archer Farms brand

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Private brand

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-a brand manufacturers by a third party for an exclusive retailer, without evidence of that retailer's affiliation -sold exclusively at the chains

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Captive brands

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-using different brand names for different products -companies use individual brands when their products vary greatly in use or performance -you don't use the same brand name for a pair of dress socks and a baseball hat

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individual brand

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-marketing several different products under the same brand name -jack Daniel's family brand includes whiskey, coffee barbecue sauce, heat and serve meat products.

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Family brand

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entails placing two or more brand names on a product or its package -3 common types of co-branding are: -ingredient branding: identifies the brand of a part that makes up the product. --Example: Church %Dwight cobranded an entire line of Arm & hammer laundry detergents with OxiClean -cooperative branding: when two brands receiving equal treatment borrow from each tower's brand equity --example: Guest at Ramada who paid with American Express were entered into a contest -complementary brand: products are advertised or marketed together to suggest usage, such as spirits brand (Seagram's) and a compatible mixer (7Up)

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Co-branding

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•Contain and protect products: Physical protection •Promote products: identify the product, list the ingredients and features •Facilitate storage, use and convenience: retailers/wholesalers want packages that are easy to ship, store and stock. •Facilitate recycling and reduce environmental damage: eco-consciousness, eco-friendly packaging

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Packaging functions

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- integral part of any package is its label -two forms: persuasive or informational -greenwashing

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Labeling

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-focuses on a promotional theme or logo and consumers information is secondary

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Persuasive labeling

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-by contrast, is designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase. -nutritional labeling -labels on furniture and how what they are made up of

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Informational labeling

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-when product or company attempts to give the impression of environmental friendliness whether or not it is environmentally friendly -

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Green washing

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-A series of thick and thin vertical lines (bar codes) readable by computerizes optical scanner, that represent number used to track products

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Universal Product codes (UPCs)

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-a product new to the world, the market, the producer, the seller or some combination of these

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What is a new product

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1. new-to-the-world products: these product create a entire new market 2. New product line: when a firm offers a new product and enters a new market 3. Additions to existing product lines: new products that supplement a firm's established line 4. improvements or revisions of existing products: "new and approved" 5. Repositioning products: existing products targeted at new markers or market segments 6. lower-prices products: the products that provide performance similar to competing brands at a lower price

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Types of new products

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-a product perceived as new by a potential adopter

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Innovation

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-the process by which the adoption of an innovation spreads. -5 categories: 1. innovators 2. early adopters 3. early majority 4. late majority 5. Laggards

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Diffusion Process

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-the first 2.5% of all those who adopt the product -venturesome, eager, higher educated and used multiple information sources

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Innovators

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-the next 13.5 percent to adopt the product -leaders in social setting, slightly above average education

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Early adopters

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-deliberate, many informal social contacts, 34% -reply on the group for information, friends of opinion leaders

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Early Majority

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-34%, skeptical, below average social status -older, depend mainly on word of mouth

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Late Majority

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-16%, fear of debt, neighbors and friends are their information source

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Laggards

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-a concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) ti its decline (death) -introduction -growth -maturity -decline -it can be used to analyze a brand, a product form, or a product category -PLC does not tell managers the length of a product's life cycle or its duration in any stage

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Product life cycle

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-PLC is an outcome of marketing strategies -NOT and inevitable progression of sales -different marketing strategies affect cycle -difficult to determine what stage a product is in at present and cant predict how long product will be in each level

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Criticisms of Product life cycle

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-Launch of new product, advertising, expense -hight cost, low sales volume -> low profit -little/no competition -limited distribution, a high failure rate -strategic marketing focus on: -Ensureing quality, limit product variations -promote heavily to create awareness and stimulate primary demand -Personal selling is often required -large advertising expenditures, stimulates primary demand -securing distribution and determine pricing strategy -goal is to create demand

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Introduction stage

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-skimming: hight initial price; capitalize on price insensitivity of early buyers and recover initial investments cost -Penetration: low initial price, avoids drawing competition interest and build customer base

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Introduction pricing strategies

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1. Primary demand: desire for the product category as opposed to a specific brand --draw consumer to category to increase "size of pie" (pie= market) 2. selective demand (secondary): desire for a particular product --increase firm slice of the pie (one of their products) -example: lemon vodka; it just on that flavor

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introduction stage demand stimulation

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-sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small firms, and profits are healthy -reduce costs, rapid growth--> highest profit -increase competition -Distribution became a major key -strategic marketing focus: -adjust marketing mix to maximize sales momentum -advertise heavily to differentiated from competition; stimulate selective demands -expand distribution and product offering -minimal price decrease if all -goal is to differentiate product, generate repeat customer and build loyalty

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Growth

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-P: improves quality, change in products function, and change in style -M: finding new users, increasing use, creasing new usage occasions

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Product modifications vs market modifications

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-sales increase at a decreasing rate -low costs, sales still increasing but at a decreasing rate -many competitors = fierce price competition -strategic marketing focus: -modify product differentiate product in market place -modify market who is buying product -heavy consumer promotion is require to maintain market share -goal is to maintain brand loyalty, sustain sales and market share, extent product life

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Maturity

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-a long-run drop in sales -strategic marketing focus: -deletion: dropping the product (ignore remaining consumers) -Harvesting: retain product, reduce marketing costs -Goal: stay profitable

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Decline

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-a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer -Marketing channels are the pipeline through which products, their ownership, information, financing, payments and the accompanying risk flow -Product --> - <-- money - -Package/material manufacturers --> product manufacturers --> wholesaler --> retailer --> consumer

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marketing channel

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-Channel members proved form ulitity when they transfer oats grown on a distant farm into the cheerios that we like o eat for breakfast. Time and place utility are created when a transport company hire by the producer physical moved boxes of cereal to a store near our homes in time for our next schedule shopping trip. And a retailer, who is willing to swap the desired product for some amount of money we are reasonably willing to give creates exchange utility in doing so.

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Explain how channel members provide the different types of utility

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-Time: delivery product to the consumer at the time they demand it; producer -Place: value from the location (available of the product): producer -Form: elements of the composition and appearance of the product makes it desirable -Exchange: value from the transfer of ownership: retailer

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different forms of utility.

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-intermediaries in a channel negotiate with one another facilitate the change of ownership between buyers and sellers, and physically move products from the manufacturers to the final consumer -Manufacturers may lack resources/ finances to sell directly consumers -Consumer value product assortment -Better rate of return on core business through: • Expertise, specialization • Reduction in distribution costs, scale • Contact efficiency

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Purpose of channel intermediaries

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-those firms in the channel that sell directly to consumers as their primary function, -they are a intermediary who sells to consumers -they provide contact efficiency for consumers -can be in a physical store or online format -they help with contact efficiency, exchange utility, form utility and take title of merchandise

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Retailers

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-the biggest role that retailers provide to consumer -retailer simplify distribution by cutting the number of transactions required by consumers,making an assortments of goods available in one locations

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Contact efficiency

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-Transactional: -buying : purchasing products for resale -selling: contacting prospective buyers, promotion, generating demand, sales and service; making them aware of existing product -risk taking ownership of inventory -Logistical: -offering assortments -carrying inventory: storing, sorting transporting: physical distribution, delivery -facilitating: -financing credit -marketing information and Research -Identification of buyers and sellers

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Functions performed by intermediaries

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-Wholesalers: purchase goods from suppliers, take title and assume risks or ownership and sells good to other reseller -use time and place utility and contact efficiency to retailers -Retailers: an intermediary who sells to consumers -Agents: similar function to distribution but do not take title, carry fewer channel function -work on commission, carry out sales function, smaller producers -Brokers: similar to agents, bring buyers and seller together, no continuous relationship; agriculture commodities, equipment, real estate -agent or broker: only facilitate sales and generally have little input into the terms of the sale; they do get fee or commission based on sales volume.

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type of intermediaries

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-the business arrangement that define the marketing channel -Determinants of channel structure: 1. product characteristics 2.buyer considerations 3. market conditions

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Channel structure

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-Number and type of intermediaries present in the marketing channel -direct -indirect

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Channel length

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-the differences is the number of intermediaries between manufactruers and customers -Direct: manufacturers --> consumers; sell directly to consumers and no intermediaries -Producer and consumer deal directly -example: LL beans only sales in their stores, Direct marketing activities -Indirect: manufacture --> wholesaler --> retailer --> consumer -intermediaries between producer and consumers -more rapid penetration and broader coverage, benefits of specialization -example: M&M is sold everywhere

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Indirect vs direct channels

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-retailer channel: manufacturer -> retailer --> consumer -wholesaler channel: manufacturer --> wholesaler --> retailer --> consumer -agent/broker channel: manufacturer -> agent/broker --> wholesaler -> retailer -->consumer

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Types of Indirect channel

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-Dual (multiple) distribution: allows retailers to reach a wider customer base, but may also lead to competition. -Manufacturer --> consumers -Manufacturer --> wholesaler --> retailer --> consumers -Non-traditional channels: may help differentiate a firm's product from the competition -limit coverage, may allow for niche coverage -manufacturers --> consumer -internet, mail-order, infomercials -Strategic channel alliance: enables them to use another manufacturer's already-established channel -Starbucks in Barnes and Noble- in house -Starbucks- united airlines -manufacturer -> Starbucks -> consumers -provides firms access to pre-established channels -market development -Foreign markets -must manage system as a whole

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Alternative Channel Arrangements

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1. Market: focus on the target consumers considerations, and what types of consumer they are. -Geographic location and size of market are important to know 2. Product: complex, customized, and expensive product tends to benefits from shorter and more direct marketing channels, while a more standardized a product is, the longer its distribution channel can be -the PLC is is an important factor in choosing a marketing channel 3. Producer: depends on how large financial, managerial and marketing resources are and how much control producer wants.

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Factors Affecting Channel Choice

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-number of different outlets a consumer can purchase the product -number of outlets: -exclusive -selective -intensive

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Channel Breadth

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-aimed at maximum market coverage, have product everywhere -sell thought all suitable outlet -Locations convenience and low purchasing effort important to buyers -promotions is mostly done by manufacturers

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Intensive distribution

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-sell though a selected number of outlets -screening dealers and retailers to eliminate all but a few, consumers much seek out the product -retailer does some image-bulidng activities not specific to your product -reduce price competitors among retailer, more incentive to sell -shopping goods, example: TV

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Selective distribution

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-selling through only limited dealer (few or one in geographic area -retailer activités very specific to product -specialty goods; example: Roll Royce

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Exclusive distribution

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