6. Product Flashcards
What is the definition of a product
a physical good, service, idea, person or place that is capable of offering tangible and intangible attributes that individuals or organisations regard as so necessary, worthwhile or satisfying that they are prepared to exchange money in order to acquire it.
Outline the anatomy of a product
core product - the main reason for the product’s existence
tangible product - way in which the marketer puts flesh on the core product (branding, packaging)
augmented product - add-ons (insurance, finance)
potential product - what the product could be in the future
Product-based classification
durables
non-durables
service
The product range
Product mix - total sum of all the products and variants offered
Product Line - group of products closely related
Product line length - total number of products in line
Product line depth - number of different variants of each item in a line e.g. sizes
Define branding
Branding seeks to create and communicate a three-dimensional character for a product that is not easily copied or damaged by competitors’ efforts.
Benefits of branding for the consumer
Easier product identification Communicates features and benefits Helps product evaluation Establishes product’s position Reduces risk Creates interest
Benefits of branding for the company
Helps create loyalty Defends against competition Creates differential advantage Allows premium pricing Helps targeting/ positioning Increases power over retailer
Outline the PLC
Introduction
- small/negative profit
- aim is to spread awareness
- stimulate trial
Growth
- rapid increase in sales
- new trials/repeat purchases
- might be opportunity for fine-tuning
Maturity
- product reaches peak sales
- customers know the product + market
- high marketing expenditure to retain brand loyalty
Decline
- profits fall despite marketing effort
- fall is often environment-related
Options for brands in decline
Milking
Short-range marketing strategy planned to take the largest possible profit from an item in the shortest amount of time without regard to the item’s long-range possibilities for sales.
Harvesting
Planned discontinuation of a product at the end of its life cycle, while extracting maximum profit from its sales. In this strategy, all marketing expenditure is gradually eliminated and the product is allowed to sell on its goodwill until sales revenue falls below a cutoff point.
Problems with the PLC
Shape differs for different products e.g. clothes peaks early on, innovative products have longer intro + growth
Difficult to predict length of PLC
Some products fail
Self-fulfilling prophecy
Diffusion of innovation
Innovators
- risk
- younger, more affluent
Early adopters
Early majority
- more risk averse
Late majority
Late adopters/ laggards
- very averse to change
- old people
Product positioning defined
A key decision that affects the length of a product’s life and resilience over time.
It means placing the product in the context of the competitive space it occupies in the market
It enables the market mix to consistently reflect this position
stages of product positioning
market research to identify important attributes to target market
shortlist existing products that offer these attributes
find out what the target market consider to be the ideal level for each attribute and their rating of the importance of each attribute
Create a perceptual map for the market - determine where to position product on map
Brands also reposition
What is the definition of a product
a physical good, service, idea, person or place that is capable of offering tangible and intangible attributes that individuals or organisations regard as so necessary, worthwhile or satisfying that they are prepared to exchange money in order to acquire it.
Brand repositioning -
Repositioning may occur because of new technology, evolving competition, changing customer needs
However it can be risky and alienate existing customers e.g. Burberry's brand took a hit when it started appealing to lower class individuals, it took them a lot of investment to build up their reputation again
