CHAPTER 6

PRODUCT STRATEGY
Product: is a good or service Price: is the amount of
that satisfies the wants of a money customers must
company’s target market.  pay to obtain the product. 

PRODUCT PRICE
Marketing
Mix (4Ps)

Promotion: is defined as the Place: includes

activities that communicate the company activities that
merits of the product and make a product
PROMOTION PLACE available to target
persuade target customers to
buy it.  consumers.
Product: is a good or service Price: is the amount of
that satisfies the wants of a money customers must
company’s target market.  pay to obtain the product. 

PRODUCT Marketing PRICE

Mix (4Ps)

Promotion: is defined as the Place: includes

activities that communicate the company activities that
merits of the product and make a product
PROMOTION PLACE available to target
persuade target customers to
buy it.  consumers.
4Ps (seller’s mind-set) (buyer’s mind-set) 4Cs

Customers are buying value and

 Businesses sell products solutions to problems
PRODUCT CUSTOMER VALUE

Customer refers to the total costs

Price of obtaining, using, and disposing
of a product 
PRICE CUSTOMER COSTS

Activities that make a product

Easy to buying
available to target consumers.
PLACE CONVENIENCE

Consumers want two-way

Eg. 30 second commercials
communication and relationships
on television and/or radio
with businesses 
PROMOTION COMMUNICATION
 How did you know about a certain singer?
(For example: Adele)

Her songs: Hello, Someone like you, Chasing

pavements,…

The product is usually the first and most basic marketing consideration.
  Products, Services, and Experiences
 Levels of Product and Services
CONTENT  Product and Service Classifications
S  Product and Service Decisions
 Branding Strategy
 New-Product Development Strategy
 Product Life-Cycle Strategies
 1
How to distinguish among these three concepts:
PRODUCTS, SERVICES
and EXPERIENCES ???
1. Products, Services and Experiences
PRODUCT
Anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a want or
need.
For example:
 Tangible objects: cars, computers, or cell phones.
 Services, events, persons, places, organizations, ideas, or a
mixture of these: a trip to Las Vegas, E*Trade online
investment services, and advice from your family doctor.
PRODUCT
1. Products, Services and Experiences

SERVICE (a form of product)

An activity, benefit, or satisfaction offered for sale that is
essentially intangible and
does not result in the ownership of anything.
For example: banking, hotel services, airline travel, retail,
wireless communication, and homerepair services.

SERVICE
1. Products, Services and Experiences
NATURE AND CHARACTERISTICS OF A
SERVICE

SERVICE
1. Products, Services and Experiences

“We realized a long time ago that what you make people
feel is just as important as what you make.”
(BMW)

Companies that market experiences realize that customers are

really buying much more than just products and services. They
are buying what those offers will dofor them.

EXPERIENCES
 1. Products, Services and Experiences
For example:
Disney has long manufactured dreams and memories through its
movies and theme parks.

EXPERIENCES
 1. Products, Services and Experiences

For example:
Nike has long declared,
“It’s not so much the shoes but
where they take you.”

EXPERIENCES
 1. Products, Services and Experiences

For example:
The Olive Garden knows that
it’s selling more than just
Italian food; it’s selling a
complete dining experience.

EXPERIENCES
 2
Levels of Product and Services
2. THREE LEVELS OF PRODUCT
 CORE CUSTOMER VALUE
Eg. People who buy a iPhone are buying more than
a cell phone, an e-mail device, or a personal
organizer. They are buying freedom and on-the-go
connectivity to people and resources.
 ACTUAL PRODUCT
Eg. iPhone is an actual product.
 AUGMENTED PRODUCT
Eg. When consumers buy a BlackBerry, the
company and its dealers also might give buyers a
warranty on parts and workmanship, instructions on
how to use the device, quick repair services when
needed.
 3
Product and Service Classifications
 3. PRODUCT AND SERVICE CLASSIFICATIONS
CONSUMER PRODUCTS INDUSTRIAL PRODUCTS
products and services bought by those purchased for further
final consumers for personal processing or for use in
consumption. conducting a business.

convenience products shopping products materials and parts capital items

specialty products unsought products supplies and services

 3. PRODUCT AND SERVICE CLASSIFICATIONS
CONSUMER PRODUCTS INDUSTRIAL PRODUCTS
products and services bought by those purchased for further
final consumers for personal processing or for use in
consumption. conducting a business.

convenience products shopping products materials and parts capital items

specialty products unsought products supplies and services

 3. PRODUCT AND SERVICE CLASSIFICATIONS
CONVENIENCE PRODUCTS SHOPPING PRODUCTS
A consumer product that
A consumer product that the
customers usually
customer, in the process of selecting
buy frequently, immediately,
and purchasing,
and with minimal
usually compares on such attributes
comparison and buying
as suitability, quality, price, and style
effort.

A consumer product with CONSUMER PRODUCTS

unique characteristics or
brand identification for
which a significant group of A consumer product that the
buyers is willing to make a consumer either does not know
special purchase effort. about or knows
about but does not normally
consider buying.
SPECIALTY PRODUCTS UNSOUGHT PRODUCTS
 3. PRODUCT AND SERVICE CLASSIFICATIONS
CONVENIENCE PRODUCTS SHOPPING PRODUCTS
Example: laundry Example: furniture,
detergent, candy, clothing, used cars, major
magazines, appliances,
and fast food. and hotel and airline
services.

CONSUMER PRODUCTS
Example:
life insurance, preplanned
funeral services, and blood
Example: donations to the
A Lamborghini Red Cross
automobile
SPECIALTY PRODUCTS UNSOUGHT PRODUCTS
 3. PRODUCT AND SERVICE CLASSIFICATIONS
CONSUMER PRODUCTS INDUSTRIAL PRODUCTS
products and services bought by those purchased for further
final consumers for personal processing or for use in
consumption. conducting a business.

convenience products shopping products materials and parts capital items

specialty products unsought products supplies and services

 3. PRODUCT AND SERVICE CLASSIFICATIONS
MATERIALS AND PARTS CAPITAL ITEMS
- Raw materials. Industrial products that aid
- Manufactured materials in the buyer’s production
and parts. or operations, including:
- Installations.
- Accessory equipment.

INDUSTRIAL PRODUCTS

Supplies:
- operating supplies.
- repair and maintenance items.
Business services:
- maintenance and repair services.
- business advisory services.
SUPPLIES AND SERVICES
 3. PRODUCT AND SERVICE CLASSIFICATIONS
MATERIALS AND PARTS CAPITAL ITEMS
Example: wheat, cotton, Example: factories,
fish, lumber, iron, yarn, offices, generators, drill
small motors, tires,… presses, hand tools, lift
trucks, computers, fax
machines,…

INDUSTRIAL PRODUCTS

Example: lubricants, coal, paint, nails,

window cleaning, computer repair, legal,
management consulting, advertising,…

SUPPLIES AND SERVICES

 3. PRODUCT AND SERVICE CLASSIFICATIONS
ORGANIZATIONS, PERSONS, PLACES, AND IDEAS
In addition to tangible products and services, marketers have broadened
the concept of a product to include other market offerings: organizations,
persons, places, and ideas.

IDEAS
ORGANIZATIONS PERSONS PLACES
Social marketing is the use of
Activities undertaken to create, maintain, or change attitudes and commercial marketing concepts and
tools in programs designed to influence
behavior of target consumers toward…
individuals’ behavior to improve their
well-being and that of society.
an organization particular people particular places
 4
Product and Service Decisions
4. Product and Service Decisions

INDIVIDUAL PRODUCT PRODUCT LINE PRODUCT MIX

DECISIONS DECISIONS DECISIONS
 What are the differences?
For example:
A specific product Samsung Galaxy S7 smartphone,
Samsung 4K SUHD (TV)

PRODUCT LINE For example:

A group of products that are closely related because Samsung's mobile phones are divided
they function in a similar manner, are sold to the into product lines based on the
same customer groups, are marketed through the following features; touch screens,
same types of outlets, or fall within given price slider/folders, QWERTY keyboards and
ranges. bar phones. 

PRODUCT MIX (OR PRODUCT For example:

PORTFOLIO) Samsung's product mix includes mobile
The set of all product lines and items that a particular phones, netbooks, tablets, televisions,
seller offers for sale. fridges, microwaves, printers and
memory cards.
4. Product and Service Decisions

INDIVIDUAL PRODUCT PRODUCT LINE PRODUCT MIX

DECISIONS DECISIONS DECISIONS
4. Product and Service Decisions

INDIVIDUAL PRODUCT DECISIONS

4. Product and Service Decisions

INDIVIDUAL PRODUCT DECISIONS

4. Product and Service Decisions
Product and Service Attributes

QUALITY FEATURES STYLE AND

DESIGN
4. Product and Service Decisions
Product and Service Attributes

QUALITY FEATURES STYLE AND

DESIGN
4. Product and Service Decisions
Product and Service Attributes

Product quality
The characteristics of a product or service that bear on its ability to satisfy stated or
implied customer needs.
Product quality has two dimensions: level (Performance quality) and consistency
(Conformance quality).
 Performance quality: companies choose a quality level that matches target market
needs and the quality levels of competing products.
QUALITY  Conformance quality: All companies should strive for high levels of conformance
quality.
4. Product and Service Decisions
Product and Service Attributes
For example:
 Performance quality:
A Rolls-Royce provides higher performance quality than a Chevrolet: It has a smoother
ride, provides more luxury and “creature comforts,” and lasts longer.
 Conformance quality:
A Chevrolet can have just as much quality as a RollsRoyce. Although a Chevy doesn’t
perform at the same level as a Rolls-Royce, it can deliver
QUALITY as consistently the quality that customers pay for and expect.
4. Product and Service Decisions
Product and Service Attributes

QUALITY FEATURES STYLE AND

DESIGN
4. Product and Service Decisions
Product and Service Attributes

Product features:
 are a competitive tool for differentiating a product from
competitors’ products.
 are assessed based on the value to the customer versus the cost
to the company
FEATURES
4. Product and Service Decisions
Product and Service Attributes

QUALITY FEATURES STYLE AND

DESIGN
 4. Product and Service Decisions
Product and Service Attributes

 Style describes the appearance of the product.

 Design contributes to a product’s usefulness as well as to
its looks.

STYLE AND
DESIGN
4. Product and Service Decisions

INDIVIDUAL PRODUCT DECISIONS

4. Product and Service Decisions
Branding

 Brand: A name, term, sign, symbol, 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.
 Consumers view a brand as an important part of a product,
and branding can add value to a product.
BRANDING
4. Product and Service Decisions

INDIVIDUAL PRODUCT DECISIONS

4. Product and Service Decisions
Packaging

 Packaging: The activities of designing and producing the

container or wrapper for a product.
 The primary function of the package was to hold and protect the
product. In recent times, packaging become an important
marketing tool as well.
PACKAGING
4. Product and Service Decisions

INDIVIDUAL PRODUCT DECISIONS

4. Product and Service Decisions
Labeling
 Labeling: Labels range from simple tags attached to products to
complex graphics that are part of the packaging.
 They perform several functions:
 Identify the product or brand.
 Describe several things about the product.
 Promote the brand, support its positioning, and connect
LABELING with customers.
4. Product and Service Decisions

INDIVIDUAL PRODUCT DECISIONS

 4. Product and Service Decisions
Product Support Services
 Support services: are an important part of the customer’s overall brand
experience.
 For example, HP offers a complete set of sales and after-sale services. It
promises “HP Total Care—expert help for every stage of your computer’s
life. From choosing it, to configuring it, to protecting it, to tuning it up—
all the way to recycling it.” Customers can click on the HP Total Care
service portal that offers online resources for HP products and 24/7 tech
support, which can be accessed via e-mail, instant online chat, and
PRODUCT SUPPORT telephone.
SERVICES
4. Product and Service Decisions

INDIVIDUAL PRODUCT PRODUCT LINE PRODUCT MIX

DECISIONS DECISIONS DECISIONS
4. Product and Service Decisions

INDIVIDUAL PRODUCT PRODUCT LINE PRODUCT MIX

DECISIONS DECISIONS DECISIONS
 What is Product Line?
For example:
A specific product Samsung Galaxy S7 smartphone,
Samsung 4K SUHD (TV)

PRODUCT LINE For example:

A group of products that are closely related because Samsung's mobile phones are divided
they function in a similar manner, are sold to the into product lines based on the
same customer groups, are marketed through the following features; touch screens,
same types of outlets, or fall within given price slider/folders, QWERTY keyboards and
ranges. bar phones. 

PRODUCT MIX (OR PRODUCT For example:

PORTFOLIO) Samsung's product mix includes mobile
The set of all product lines and items that a particular phones, netbooks, tablets, televisions,
seller offers for sale. fridges, microwaves, printers and
memory cards.
4. Product and Service Decisions
 The major product line decision involves product line length.
 Product line length is the number of items in the product line.
 A company can expand its product line in two ways:
 Line filling
 Line stretching:
 Downward
PRODUCT LINE
DECISIONS  Upward
 Both directions
4. Product and Service Decisions
For example:
 Line filling:
Cozy Teabag:
- Red Tea
- Gold Tea
- Strawberry Flavored Tea
PRODUCT LINE - Peach Flavored Tea
DECISIONS - Mint Flavored Tea
- Apple Flavored Tea
 4. Product and Service Decisions
For example:
 Line stretching:
 Downward:
Honda stretched downward by adding its
thrifty little Honda Fit to its line. The Fit,
economical to drive and priced in the
$14,000 to $15,000 range, met increasing
consumer demands for more frugal cars and
PRODUCT LINE
preempted competitors in the new-
DECISIONS
generation minicar segment.
 4. Product and Service Decisions
For example:
 Line stretching:
 Upward:
Some years ago, each of the leading
Japanese auto companies introduced an
upmarket automobile: Honda launched
Acura; Toyota launched Lexus; and
Nissan launched Infiniti.
PRODUCT LINE
DECISIONS
 4. Product and Service Decisions
For example:
 Line stretching:
 Both directions:
Marriott did this with its hotel product line. Along with regular Marriott hotels, it
added eight new branded hotel lines to serve both the upper and lower ends of the
market.
- Renaissance Hotels & Resorts aims to attract and please top executives.
- Fairfield Inn by Marriott, vacationers and business travelers on a tight travel
PRODUCT LINE budget.
DECISIONS - Courtyard by Marriott, salespeople and other “road warriors.”
4. Product and Service Decisions

INDIVIDUAL PRODUCT PRODUCT LINE PRODUCT MIX

DECISIONS DECISIONS DECISIONS
4. Product and Service Decisions

INDIVIDUAL PRODUCT PRODUCT LINE PRODUCT MIX

DECISIONS DECISIONS DECISIONS
 What is Product Mix?
For example:
A specific product Samsung Galaxy S7 smartphone,
Samsung 4K SUHD (TV)

PRODUCT LINE For example:

A group of products that are closely related because Samsung's mobile phones are divided
they function in a similar manner, are sold to the into product lines based on the
same customer groups, are marketed through the following features; touch screens,
same types of outlets, or fall within given price slider/folders, QWERTY keyboards and
ranges. bar phones. 

PRODUCT MIX (OR PRODUCT For example:

PORTFOLIO) Samsung's product mix includes mobile
The set of all product lines and items that a particular phones, netbooks, tablets, televisions,
seller offers for sale. fridges, microwaves, printers and
memory cards.
 4. Product and Service Decisions

A company’s product mix has four important dimensions:

 Width
 Length
 Depth
PRODUCT MIX  Consistency
DECISIONS
 4. Product and Service Decisions

A company’s product mix has four important dimensions:

 Width: the number of different product lines the company carries.

For example: GE manufactures as many as 250,000 items across a
broad range of categories, from light bulbs to jet engines and diesel
locomotives.
PRODUCT MIX
DECISIONS
 4. Product and Service Decisions

A company’s product mix has four important dimensions:

 Length: the total number of items a company carries within its

product lines.
For example: Colgate’s personal care line includes Softsoap
liquid soaps and body washes, Irish Spring bar soaps, Speed Stick
PRODUCT MIX deodorant, and Skin Bracer and Afta aftershaves.
DECISIONS
 4. Product and Service Decisions

A company’s product mix has four important dimensions:

 Depth: the number of versions offered for each product in

the line.
For example: you can buy Colgate Total in regular, mint
stripe gel, or whitening liquid.
PRODUCT MIX
DECISIONS
 4. Product and Service Decisions

A company’s product mix has four important dimensions:

 Consistency: how closely related the various product lines are in

end use, production requirements, distribution channels, or some
other way.
For example: Colgate product lines are consistent insofar as they are
PRODUCT MIX consumer products and go through the same distribution channels..
DECISIONS
 5
Branding Strategy
5. Branding Strategy
Are brands important?
Roberto Goizueta, the late CEO of Coca-Cola, commented:
“All our factories and facilities could burn down tomorrow
but you’d hardly touch the value of the company; all that
actually lies in the goodwill of our brand franchise and the
collective knowledge in the company.”
5. Branding Strategy
What is Brand?

 Watch Video:

https://www.youtube.com/watch?v=JKIAOZZritk
5. Branding Strategy
What is Brand?

“Name, term, sign, symbol, or design, or a combination

of them intended to identify the goods and services of
one seller or groups of sellers and to differentiate them
from those of competition.”
(American Marketing Association)
5. Branding Strategy
What is Brand?

 A brand is a promise.
 It exists only in the minds of the consumer.
 It is both functional and emotional.
 It must stand for something.
 5. Branding Strategy
 Brand Loyalty BRAND IQUITY
 Brand Awareness  Brand Personality
 Perceived Quality  Brand-Customer
 Brand Associations BRAND IDENTITY  Relationships
 Other Proprietary  Organizational
Brand Assets  Associations
PRODUCT  Symbol
 User Imaginary
 Scope  Functional Benefits
 Attributes  Emotional Benefits
 Quality  Self-Expressive Benefits
 Uses
 Country of origin
5. Branding Strategy
What is Brand Equity?
“Brand Equity is a set of brand assets and liabilities linked to a brand, its name and
symbol, that add to or subtract from the value provided by a product or service to a firm
and/or to that firm’s customers”
(Akaer, 1991)
“A basic premise of brand equity is that the power of a brand lies in the mind of
consumers and what they have experienced and learned about the brand over time. Brand
equity can be thought of as the “added value” endowed to a product in the thoughts,
words, and actions of consumers .”
(Keller, 2003)
5. Branding Strategy
What benefits result from enhancing brand equity?

 Increased consumer loyalty.

 Long-term growth and profitability for the brand.
 Maintain brand differentiation from competitive offerings.
 Insulate brand from price competition.
5. Branding Strategy

Major Brand Strategy Decisions

5. Branding Strategy

Major Brand Strategy Decisions

5. Branding Strategy
Major Brand Strategy Decisions
BRAND POSITIONING

Brand strategy decisions include:

 Product attributes
 Product benefits
 Product beliefs and values
5. Branding Strategy

Major Brand Strategy Decisions

5. Branding Strategy
Major Brand Strategy Decisions
Desirable qualities:
 Desirable qualities
 Suggest benefits and qualities
BRAND NAME  Easy to pronounce, recognize, and remember
SELECTION  Distinctive
 Extendable
 Translatable for the global economy
 Capable of registration and legal protection
5. Branding Strategy

Major Brand Strategy Decisions

5. Branding Strategy

Major Brand Strategy Decisions

5. Branding Strategy
Major Brand Strategy Decisions

BRAND
DEVELOPMEN
T
STRATEGIES
 6
New-Product Development Strategy
6. New-Product Development Strategy
Two ways to obtain new products:

ACQUISITION NEW PRODUCT DEVELOPMENT

refers to the buying of a refers to original products,
whole company, a patent, product improvements, product
or a license to produce modifications, and new brands
someone else’s product developed from the firm’s own
research and development.
6. New-Product Development Strategy
Major Stages in New-Product Development
 7
Product Life-Cycle Strategies
7. Product Life-Cycle Strategies

Product Life Cycle (PLC)

The course of a product’s sales and profits
over its lifetime.
It involves five distinct stages:
 Product development
 Introduction
 Growth
 Maturity
 Decline
7. Product Life-Cycle Strategies
 Product development
 Sales are zero and investment costs mount
 Introduction
 Slow sales growth and profits are nonexistent
 Growth
 Rapid market acceptance and increasing profits
 Maturity
 Slowdown in sales growth and profits level off or decline
 Decline
 Sales fall off and profits drop
7. Product Life-Cycle Strategies
SUMMARY OF PRODUCT LIFE-CYCLE CHARACTERISTICS,
OBJECTIVES
What do you need to
remember?
THREE LEVELS OF PRODUCT
 CORE CUSTOMER VALUE
Eg. People who buy a iPhone are buying more than
a cell phone, an e-mail device, or a personal
organizer. They are buying freedom and on-the-go
connectivity to people and resources.
 ACTUAL PRODUCT
Eg. iPhone is an actual product.
 AUGMENTED PRODUCT
Eg. When consumers buy a BlackBerry, the
company and its dealers also might give buyers a
warranty on parts and workmanship, instructions on
how to use the device, quick repair services when
needed.
 PRODUCT AND SERVICE CLASSIFICATIONS
CONSUMER PRODUCTS INDUSTRIAL PRODUCTS
products and services bought by those purchased for further
final consumers for personal processing or for use in
consumption. conducting a business.

convenience products shopping products materials and parts capital items

specialty products unsought products supplies and services

Product and Service Decisions

INDIVIDUAL PRODUCT PRODUCT LINE PRODUCT MIX

DECISIONS DECISIONS DECISIONS
 What are the differences?
For example:
A specific product Samsung Galaxy S7 smartphone,
Samsung 4K SUHD (TV)

PRODUCT LINE For example:

A group of products that are closely related because Samsung's mobile phones are divided
they function in a similar manner, are sold to the into product lines based on the
same customer groups, are marketed through the following features; touch screens,
same types of outlets, or fall within given price slider/folders, QWERTY keyboards and
ranges. bar phones. 

PRODUCT MIX (OR PRODUCT For example:

PORTFOLIO) Samsung's product mix includes mobile
The set of all product lines and items that a particular phones, netbooks, tablets, televisions,
seller offers for sale. fridges, microwaves, printers and
memory cards.
 Branding Strategy

 Brand Loyalty BRAND IQUITY

 Brand Awareness  Brand Personality
 Perceived Quality  Brand-Customer
 Brand Associations BRAND IDENTITY  Relationships
 Other Proprietary  Organizational
Brand Assets  Associations
PRODUCT  Symbol
 User Imaginary
 Scope  Functional Benefits
 Attributes  Emotional Benefits
 Quality  Self-Expressive Benefits
 Uses
 Country of origin
New-Product Development Strategy

Major Stages in New-Product Development

Product Life-Cycle Strategies

Product Life Cycle (PLC)

The course of a product’s sales and profits
over its lifetime.
It involves five distinct stages:
 Product development
 Introduction
 Growth
 Maturity
 Decline