Product

the need-satisfying offering of a firm

- the ideal of "product" as potential customer satisfaction or benefits is very important

Quality

a product's ability to satisfy a customer's needs or requirements

- focuses on how the customer thinks a product will fit some purpose

Prodcut Assortment

the set of all product lines (a set of individual products that are closely related) and individual products that a firm sells

- products in a line are related by being produced or operated in a similar way, sold to the same target market, sold through the same types of outlets, or priced at about the same

ex) Sarah Lee has many product lines in its product assorment

Individual Product

a particular product within a product line

- differentiated by brand, level of service offered, price, or some other characteristic (each size and flavor of a brand of soap is an individual product)

Branding

brand names, trademarks and service mark

the use of a name, term, symbol or design - or a combination of these - to identify a product (includes brand names, trademarks and practically all other means of product identification

• Brand Name:a word, letter, or a group of workds or letters
• Trademark: a legal term; includes only those words, symbols, or marks that are legally registered for a single company
• Service Mark: same as a trademark but that it refers to a service offering

Favorable Conditions to Successful Branding

1. Easy to label and identify by brand or trademark
2. Quality is easy to maintain and the best value for the price
3. Dependable and widespread availability is possible
4. Strong enough demand so the market price can be high enough to make the branding effort profitable
5. Economies of scale; costs should drop and profits should increase
6. Favorable shelf locations or display space in stores; retailers can control when they brand their own products

Brand Familiarity

how well customers recognize and accept a company's brand

- the degree of this affects the planning for the rest of the marketing mix - especially place and promotion

Five Levels of Brand Familiarity:

rejection, non-recognition, recognition, preference, and insistence

1. Rejection: potential customers won't buy a brand unless its image is changed; changing a negative image is difficult and can be very expensive
2. Non-recognition: final consumers don't recognize a brand at all - products that are seen as basically the same; ex) inexpensive dinnerware
3. Recognition: customers remember the brand - sticks out among other less familiar brands
4. Preference: target customers usually choose the brand over other brands (habbit, or favorable past experience)
5. Insistence: customers insist on a firm's branded product and are will to search for it

Brand Equity

the value of a brand's overall strength in the market

- likely to be higher if many satisfied customers insist on buying the brand and if retailers are eager to stock it

Lanham Act

of 1946

spells out what kinds of marks (including brand names) can be protected and the exact method of protecting them

- applies to intrastate and foreign commerce

Family Brand

the same brand name for several products

- makes sense if all are similar in type and quality

- ex: Keebler snack food products and Sears' Kenmore Appliances

Licensed Brand

a well-know brand that sellers pay a fee to use

- Sunkist has been licensed to many companies for use on more than 400 products in 30 countries

Individual Brands

separate brand names for each product - when it's important for the products to each have a separate identity as when products vary in quality or type

Generic Products

products that have no brand at all other than identification of their contents and the manufacturer or intermediary

- usually offered in plain packages at lower prices

Manufacturer Brands

brands created by producers

- sometimes called national brands because the brand is promoted all across the country or in large regions

ex) Nabisco, Campbell's, Whirlpool, Ford and IBM

Dealer (Private) Brands

brands created by intermediaries

- ex) Kroger, Ace Hardware, Radio Shack Wal-Mart, and Sears

Battle of the Brands

the competition between dealer brands and manufacturer brands, is just a question of whose brands will be more popular and who will be in control

- currently both kinds of brands are about equal, but sales of dealer brands are expected to continue growing

Packaging

involves promoting, protecting, and enhancing the product

- important to both sellers and customers: makes product more convenient to use or store, prevents spoiling or damage, makes product easier to identify and promotes the brand

Universal Product Code (UPC)

identifies each product with marks readable by electronic scanners

- speed handling of fast-selling products

- reduce errors by cashiers and make it easy to control inventory and track sales of specific products

Federal Fair Packaging and Labeling Act

of 1966

requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information

- industries need to try to reduce the confusing number of package sized and make labels more useful

- Nutrition Labeling and Education Act of 1990: requires that food manufacturers use a uniform format that allows consumers to compare the nutritional value of different products

Warranty

explains what the seller promises about its product

- marketing managers need to decide whether to offer a specific warranty and if so what the warranty will cover and how it will be communicated to target customers

Magnuson-Moss Act

of 1975

producers must provide a clearly written warranty if they choose to offer any warranty

- does not have to be strong , but as the Federal Trade Commission (FTC) guidelines try to ensure warranties should be clear and definite and not deceptive and unfair

Consumer vs. Business Products

Consumer Products: meant for the final consumer

Business Products: meant for use in producing other products

- some products can be both consumer and business products; ex) Bertolli Olive Oil

- consumer product classes are based on how consumers think about and shop for products

- business product classesare based on how buyers think about products and how they'll be used

Consumer Product Classes:

Convenience Products

products a consumer needs but isn't willing to spend much time or effort shopping for

- bought often, require little service or selling, don't cost much, and may even be bought by habit. Examples:

*Staples: bought often, routinely, and without much thought

*Impulse Products: bought quickly as unplanned purchases due to a strong felt need

*Emergency Products: purchased immediately when the need is great - caught in the rain and buy an expensive umbrella

Customer Product Classes:

Shopping Products

products that a customer feels are worth the time and effort to compare with competing products. Divided into two groups:

• Homogeneous:sees products as basically the same and want the one at the lowest price
• Heterogeneous: sees products differently and want to inspect for quality and suitability - quality and style matter more than price

Consumer Product Classes:

Specialty Products

products that the customer really wants and makes a special effort to find

- does not mean comparing - the buyer wants that special product and is willing to search for it

- marketing managers what customers to see their products as specialty products

Consumer Product Classes:

Unsought Products

products that potential customer don't yet want or know they can buy; usually won't buy if they see them unless promotion can show their value. Two Types:

New Unsought: offer really new ideas that potential customer don't know about yet

Regularly Unsought: gravestones, life insurance, and encyclopedias - there is a need but potential customers are not motivated to satisfy it

Derived Demand

the demand for business products derives from the demand for final consumer products

- total industry demand for business products is fairly inelastic; however sharp business buyers try to buy as economically as possible

Expense Item

vs. Capital Item

expense: a product whose total cost is treated as a business expense in the year it's purchased

capital:a long-lasting product that can be used and depreciated for many years

Business Product Classes:

Installations

One-of-a-kind installations like office buildings and custom-made machines generally require special negotiations for each sale

- standardized major equipment is treated more routinely

Business Product Classes:

Accessories

short-lived capital items

- tools and equipment used in production or office activities

- ex: small copy machines, portable drills, and filing cabinets

- since they cost less and don't last as long as installations, multiple buying influence is less important

Business Product Classes:

Raw Materials

unprocessed expense items such as: logs, iron ore, and wheat

- become part of a physical good and are expense items. Two types include:

• Farm Products: grown by farmers - oranges, sugar cane and cattle
• Natural Products: occur in nature - timber, iron ore, oil, and coal

Business Product Classes:

Components

processed expense items that become part of a finished product

- Parts are finished or nearly finished items that are ready for assembly into the final product

- materials are items such as wire, plastic, or textiles; they have already been processed but must be processed further to become part of the final product

Business Product Classes:

Supplies

expense items that do not become part of the finished product. Three types include:

• maintenance (like convenience product, ordered due to need and buyers won't spend much time on it)
• repair
• operating (like coal and fuel oil - receive special treatment, usually several sources)

Business Product Classes:

Professional Services

are specialized services that support a firm's operations

- usually expense items

- managers compare the cost of buying professional services outside the firm to the cost of having company people do them