Chapter 2: Product concept and dimensions Flashcards
Product concept
The product is the most important element and the axis around which the marketing strategy is designed.
Products are designed to satisfy a consumer’s need or wish
Hierarchy of value
- Basic benefit
- Basic product
- Expected product
- Increased product
- Potential product
Classification of products according to tangibility
- Tangible
- Intangible
Classification of products according to market
- Of consumption
- Organizational
Classification of products according to fungibility
- Durable
- For immediate consumption
Classification of products according to convenience
- Recurrents
- Purchase by impulse
- Of emergency
Classification of products according to frequency and purchase of effort
- Convenience
- Sporadic buy
- Specialty
Key concepts in product portfolio
- Range
- Product Line
- Product model
- Range length
- Width of range
- Depth of line
- Consistency of products
Pros and cons of a large product range
In favor:
- Increased market share
- More choice
- Easier negotiations with distributions
- Reducing risks
Against:
- Effect on product costs
- More complex internal organization
- Complexity with suppliers
Product portfolio strategies: width
- Downward or upward extension
- Extension in both directions
- Creating a line that facilitates cross-selling
Boston matrix analysis elements
- Relative market share
- Growth rate
Elements that help differentiation
- Attributes
- Brand
- Packaging
- Label
- Communication
- Distribution channel
- Price
- Added services
- Experience
- Affinity with the buyer
Differentiation definition
Highlighting the characteristics of a product that can contribute to it’s uniqueness
Positioning definition
Place that a brand occupies in consumers minds in relation to competitors
Positioning process steps
- Segmentation
- Targeting
- Positioning
- Map
- Ideal positioning
- Define the strategy
- Test results
Product Life Cycle definition
Evolution of sales and profits from the product launch
Product Life Cycle stages
- Introduction
- Growth
- Maturity
- Decline
PCL characteristics: Introduction
- Low sales
- Great uncertainty
- High prices
- Scarce benefits
- Little competition
PCL characteristics: Growth
- High sales and profit growth
- Mass market
- First compettitors appear
- Reduced unit costs
PCL characteristics: Maturity
- Halted sales and profits
- Intense competition
- Market niches
- Sector:
Large companies
Small companies
PCL characteristics: Decline
- Sales drop and substitutes appear
- Profit decreases
- Abandon and replace product
- Slow withdrawal
Relaunching
Elimination
Marketing in services concepts
- Santesmases: Application of human or mechanical efforts to people, animals or objects
- Kotler: A service is any action that one party can offer to other
