Session 7 - SETTING THE PRODUCT STRATEGY
Session 7 - SETTING THE PRODUCT STRATEGY
Session 7 - SETTING THE PRODUCT STRATEGY
PRODUCT STRATEGY
bundle of benefits
which satisfies
Durable
Goods
Tangibility Non-durable
Services
How do products fit into the
market place
OFFERINGS
Shopping
Financial Operational Marketing Personnel
The term Product in the
Marketing Mix includes :
Product assortment Quality
Design Features
Brand name Packaging
Sizes Services
Warranties Returns
Product Levels
• Core benefit – the
primary benefit
• Basic product – a generic
tangible product
• Expected product – set
of attributes normally
expected
• Augmented product –
the additions the seller
adds to the product to
make it attractive
• Potential Product – all
possible augmentations
a product might undergo
in the future Five Product Levels
Product Levels - Bicycle
LEVELS BICYCLE
Core ?
Basic ?
Expected ?
Augmented ?
Potential ?
Product Levels - Bicycle
LEVELS BICYCLE
Cheap self powered
Core
transportation
Strong frame, two wheels,
Basic
pedal, brakes seat
Bell, carrier, chain guard,
Expected
tool kit
Light frame, gears, collapsible,
Augmented
service
Open to creativity, endless
Potential
possibilities………….
Product Levels – Pressing Iron
LEVELS PRESSING IRON
Core ?
Basic ?
Expected ?
Augmented ?
Potential ?
Product Levels – Pressing Iron
LEVELS PRESSING IRON
Removal of creases
Core
from clothes
Heavy base, heating coil,
Basic
handle, power plug, power cord
Temperature control, low power
Expected
consumption
Cordless, steam ironing,
Augmented
light weight
Open to creativity, endless
Potential
possibilities………….
How does a company
build and manage its
products???
Product Mix
(also called Product Assortment)
Wash
Surf Excel Pepsodent Lux Fair & Lovely
Rin Close-up Lifebouy Pond’s
Wheel Liril
Dove
Pears
Breeze
Product Mix Decisions
Upwards
Stretching
Downwards
2. Product modification
3. Product abandonment
Product Strategy
The Product is one of the elements in your
marketing mix, the ingredient marketers call the
“Four Ps”
distribution,
advertising,
Total
industry
profits
Time
How can a company differentiate
its product???
Form – the physical structure
Features – benefits in addition to basic function
Performance quality - level of operational effectiveness
Conformance quality – consistency in performance
Durability – product’s expected operating life
Reliability – probability of mal-function
Repairability – easy of recovery from a malfunction
Style – aesthetics ……….2
How can a company differentiate
its product???
Ordering ease – how easy it is to place an order
Delivery – speed, accuracy, and care attending the delivery
process
Installation – work done to make a product operational
Customer Training – training the customer’s employees
to use the vendor’s equipment.
Customer Consulting – data, info, advice offered by the
seller to the buyers
Maintenance & Repairs – service program to help
customers keep purchased products in working conditions
Continuum of Evaluation
Maintain/hold Build/Withdraw
Revenues ++++ Revenues +
Expenses --- Expenses ----
Net + Net ---
10%
Cash Cows Dogs
Harvest Kill/Divest
Revenues ++++++ Revenues ++
Expenses -- Expenses ----
Net ++++ Net --
Low
High 1.0X Low
Relative Market Share
That’s all for today!!!