7.2 Product and Service Decisions

Question 1

Marketers make product and service decisions at three levels. What are they?

Answer 1

Individual product decisions
Product line decisions
Product mix decisions

Question 2

The important decisions in the development and marketing of individual products and services.

Answer 2

Product and service attributes
Branding
Packaging
Labelling and logos,
Product support services.

Question 3

Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by product attributes such as…

Answer 3

Quality, features, and style and design.

Question 4

Definition of Product Quality.

Answer 4

Product quality:

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

Question 5

What is Total Quality management (TQM). Return-on-quality approach?

Answer 5

Total quality management (TQM) is an approach in which all the company’s people are involved in constantly improving the quality of products, services, and business processes.

For most top companies, customer-driven quality has become a way of doing business. Today, companies are taking a return-on-quality approach, viewing quality as an investment and holding quality efforts accountable for bottom-line results.

Question 6

What are the two levels of Product Quality?

Answer 6

Level and consistency.

Question 7

What is qualty level and performance quality?

Answer 7

In developing a product, the marketer must first choose a quality level that will support the product’s positioning.

Here, product quality means performance quality—the product’s ability to perform its functions.

Question 8

What is quality consistancy and conformance quality?

Answer 8

Beyond quality level, high quality also can mean high levels of quality consistency.

Here, product quality means conformance quality—freedom from defects and consistency in delivering a targeted level of performance. All companies should strive for high levels of conformance quality.

Question 9

Describe product features.

Answer 9

A product can be offered with varying features. A stripped-down model, one without any extras, is the starting point.

The company can then create higher-level models by adding more features.

Features are a competitive tool for differentiating the company’s product from competitors’ products.

Being the first producer to introduce a valued new feature is one of the most effective ways to compete.

Question 10

Describe Product Style and Design

Answer 10

Another way to add customer value is through distinctive product style and design.

Design is a larger concept than style. Style simply describes the appearance of a product.

Styles can be eye catching or yawn producing. A sensational style may grab attention and produce pleasing aesthetics, but it does not necessarily make the product perform better.

Unlike style, design is more than skin deep—it goes to the very heart of a product. Good design contributes to a product’s usefulness as well as to its looks.

Question 11

Where does good design begin?

Answer 11

Design begins with observing customers, understanding their needs, and shaping their product-use experience.

Product designers should think less about technical product specifications and more about how customers will use and benefit from the product.

Question 12

Definition of a Brand

Answer 12

Brand:

A name, term, sign, symbol, or design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.

Question 13

How does branding help buyers?

Answer 13

Branding helps buyers in many ways. Brand names help consumers identify products that might benefit them.

Brands also say something about product quality and consistency—buyers who always buy the same brand know that they will get the same features, benefits, and quality each time they buy.

Question 14

How does branding help sellers?

Answer 14

Branding also gives the seller several advantages. The seller’s brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors. Branding helps the seller to segment markets.

Question 15

What does a brand name become the basis of?

Answer 15

Finally, a brand name becomes the basis on which a whole story can be built about a product’s special qualities.

Question 16

Definition of Packaging

Answer 16

Packaging:

The activities of designing and producing the container or wrapper for a product.

Traditionally, the primary function of the package was to hold and protect the product. In recent times, however, packaging has become an important marketing tool as well.

Companies realize the power of good packaging to create immediate consumer recognition of a brand.

Innovative packaging can give a company an advantage over competitors and boost sales. Distinctive packaging may even become an important part of a brand’s identity.

Question 17

What can poorly designed packages cause?

Answer 17

Poorly designed packages can cause headaches for consumers and lost sales for the company.

Another packaging issue is overpackaging—as when a tiny USB flash drive in an oversized cardboard and plastic display package is delivered in a giant corrugated shipping carton. Overpackaging creates an incredible amount of waste, frustrating those who care about the environment.

Question 18

What must companies consider when making packing packaging decisions?

Answer 18

In making packaging decisions, the company also must heed growing environmental concerns.

Fortunately, many companies have gone “green” by reducing their packaging and using environmentally responsible packaging materials. Product safety has also become a major packaging concern in recent years.

Question 19

What are the functions of a Logo?

Answer 19

At the very least, the label identifies the product or brand, such as the name Sunkist stamped on oranges.

The label might also** describe** several things about the product—who made it, where it was made, when it was made, its contents, how it is to be used, and how to use it safely.

Finally, the label might help to promote the brand and engage customers. For many companies, labels have become an important element in broader marketing campaigns.

Question 20

What can labels and brand logos do?

Answer 20

Labels and brand logos can support the brand’s positioning and add personality to the brand.

In fact, they can become a crucial element in the brand–customer connection.

Customers often become strongly attached to logos as symbols of the brands they represent.

Question 21

What is the first step in designing support services?

Answer 21

The first step in designing support services is to survey customers periodically to assess the value of current services and obtain ideas for new ones.

Once the company has assessed the quality of various support services to customers, it can take steps to fix problems and add new services that will both delight customers and yield profits to the company.

Question 22

Definition of product line

Answer 22

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 outlets, or fall within given price ranges.

Question 23

What is product line length?

Answer 23

The major product line decision involves product line length—the number of items in the product line. The line is too short if the manager can increase profits by adding items; the line is too long if the manager can increase profits by dropping items.

Managers need to analyze their product lines periodically to assess each item’s sales and profits and understand how each item contributes to the line’s overall performance.

Question 24

What are the two ways that a company can expand its product line?

Answer 24

Line filling or line stretching.

Question 25

What is product line filling?

Answer 25

Product line filling involves adding more items within the present range of the line.

There are several reasons for product line filling: reaching for extra profits
satisfying dealers
using excess capacity
being the leading full-line company
plugging holes to keep out competitors

However, line filling is overdone if it results in cannibalization (eating up sales of the company’s own existing products) and customer confusion. The company should ensure that new items are noticeably different from existing ones.

Question 26

What is product line streaching?

Answer 26

Product line stretching occurs when a company lengthens its product line beyond its current range.

The company can stretch its line downward, upward, or both ways.

Question 27

Definition of Product mix (product portfollio)

Answer 27

Product mix (product portfolio):

The set of all product lines and items that a particular seller offers for sale.

Question 28

A company’s product mix has four important dimensions:

Answer 28

width, length, depth, and consistency.

Question 29

What is Product width?

Answer 29

Product mix width refers to the number of different product lines the company carries.

Question 30

What is Product mix length?

Answer 30

Product mix length refers to the total number of items a company carries within its product lines.

Colgate carries several brands within each line. For example, its personal care line includes Softsoap liquid soaps and body washes, Irish Spring bar soaps, Speed Stick deodorants, Afta, and Colgate toiletries and shaving products, among others.

Question 31

What is Product line depth?

Answer 31

Product line depth refers to the number of versions offered of each product in the line.

Colgate toothpastes come in numerous varieties, ranging from Colgate Total, Colgate Optic White, and Colgate Tartar Protection to Colgate Sensitive, Colgate Enamel Health, Colgate PreviDent, and Colgate Kids.

Then each variety comes in its own special forms and formulations. For example, you can buy Colgate Total in regular, clean mint, advanced whitening, deep clean, total daily repair, 2-in-1 liquid gel, or any of several other versions.

Question 32

What is product mix consistency?

Answer 32

Finally, the consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.

Colgate’s product lines are consistent insofar as they are consumer products that go through the same distribution channels.

The lines are less consistent insofar as they perform different functions for buyers.

Question 33

What do the four product mix dimenstions provide?

Answer 33

These product mix dimensions provide the handles for defining the company’s product strategy. A company can increase its business in four ways.