MARKETING I

Principles of Marketing

Instructor: Mrs. Marielou Cruz Manglicmot,MBA Reporters: Jhonly Banconian Rowel Montao Marjorie Hangad

PRODUCT

Are the vehicles by which the company attempts to accomplish its objectives  Is anything offered for sale by a firm to buyers to satisfy their wants and needs


Product may
A physical object A service A place An organization An idea A personality

To maintain the interest of buyers, the physical products are most often provided with benefits like

 Quality  Reputation of the manufacturer  Packaging  Credit  Information about the product  Warranty  After sales services  Delivery

With the foregoing statement, a product may now be defined more specifically, as follows:

A product is anything offered for sale by a firm to buyers to satisfy their physical, social, symbolic, and psychological wants and needs.

Classification of Product

 Consumer goods  Industrial goods

 Consumer goods  Are those intended for final consumption by consumers

 The rate of consumption

and tangibility  The consumers shopping habit

Rate of consumption and tangibility

Durables  Nondurables  Services

 Durable goods  Are tangible goods which normally

survive many uses

 Nondurable goods  Are tangible products which are

consumed in one or few uses

 Services  Are intangible goods like activities,

benefits, or satisfaction which are offered for sale

Consumers Shopping Habit

 Convenience goods  Shopping goods  Specialty goods  Unsought goods

 Convenience goods  Are those which are purchased with

a minimum of effort  Shopping goods Are those that bought only after an effort to compare with other goods is made  Specialty goods  Are those that the consumers seek to buy and they are not willing or they are not able to accept substitutes

 Unsought goods  Are those that are not yet wanted by

or are still unknown to the consumer

The new unsought goods The regularly unsought goods

 New Unsought Goods  Are really new ideas or

products that the consumers still have to know to be motivated to buy  Regular Unsought Goods  Are those that stay unsought but not unbought forever

 Industrial goods
Are those used in the
production of other goods

Installations Accessory Equipment Raw Materials Component Parts and

Materials Supplies Services

 Installations
Refers to industrial products
with long life, are generally expensive, and they form part of the major capital equipment of an industrial firm

 Accessory Equipment are industrial goods that are

used as aids in the production process

 Raw Materials
are unprocessed goods that will
become part of another product  farm products  are those grown by farmers  natural products are those which occur by nature

 Component Parts and Materials Are processed industrial goods

that will still be used and become an actual part of the finished product

 Supplies
Are items that are used as aids in the
operating process but do not become part of the finished product

 Services
 Are expense items that assist in the
operation

Branding  Quality  Image  Product features  Packaging  Location  Promotion  Innovation  Different service


The Product as a More Useful Variables

Branding
A marketing action which identifies and helps differentiate the goods or services of one seller from those of another


Brand


Is a name, term, sign, symbol, or design, or a combination of these elements, that is intended to identify the goods or services of one seller or a group of sellers

Legally registered  Not legally registered



Legally registered brands are provided with legal protection called trademark

Brand name
Refers to that part of a brand consisting of words, letters, and/or numbers that can be vocalized


Brand mark


Refers to that part of a brand that appears in the form of a symbol, design, or distinctive coloring or lettering, and which can not be vocalized

Licensing as an Alternative


Licensing offers much flexibility because the licensee is not barred from using other options when needed

Criteria for a Good Brand

Desirable qualities of a Good Brand



 

It should suggest something about the products benefits and qualities It should be easy to pronounce, recognize, spell, and remember It should be distinctive It must be adaptable to additional product lines It must be capable of being legally registered

When to adapt a brand

 

The demand for the general product class which the product or service under consideration belongs should be large The demand should be strong enough so that the market price can be high enough to make the effort profitable There should be economies scale The product quality should be the best for the price, and the quality should be easy to maintain

The brand or trademark should make it easy for the product to be identified Availability of the product is the dependable and widespread Favorable shelf location or display space in stores must be available for retailing activities

BRANDING STRATEGIES
Manufacturer Branding  Reseller branding  Mixed branding  Generic branding


Manufacturer branding


is a branding strategy in which the brandname for a product is designated by the manufacturer.


Multiproduct approach  Multibrand approach

Multiproduct approach


Referred to as blanket or family branding strategy, uses the same brand name to cover a group of products
Advantages

Buyers who have a positive experience with the product will extend this favorable attitude to other products with the same brand The level of brand awareness is raised and can reduce the rate of advertising costs

Multibrand approach


Requires the firm to provide each product with a distinctive name

Advantages It is useful when each brand is intended for a different marketing segment There is no risk of one products failure affecting another product line

Reseller branding
Refers to the branding strategy of a firm which manufactures products but sell them under the brand name of a reseller  Also referred to as a private labeling or private branding


Mixed branding
Refers to the use of the manufacturer and reseller brands in a product


Generic branding


A branding strategy which lists no product name, only a description of contents

Packaging
Refers

to all activities involved in designing and producing the container or wrapper for a product The container or wrapper is the package

Three level of materials

 The

primary package which is the products immediate container  The secondary package which protects the primary package  The shipping package which contains the secondary package or the packages

Reasons for packaging

 It

provides protection to products before and after they are in the possession of the intended users  It provides convenience to the users  It provides safety  It provides economy to both the seller and the user  It allows sellers to effectively promote the product

What Makes a Good Package?

Labeling
 Label


Part of the product which provides information about the product and the manufacturer It may be  A part of the package  A tag attached to the product

Types of label
 The  The  The  The

brand label descriptive label grade of label promotional label

PRODUCT WARRANTY
One of the product components that attract customers to patronize a product is the warranty, which is a statement explaining what the seller promises about the product. It is actually manufacturers written promise as to the extent of the repair, replacement, or otherwise compensation for detective goods.

Variations of Warranty
Express Implied

 Express
 are

Warranties

written statement of a manufacturer s liabilities for product deficiencies.

Express warranty may be:

 limited-coverage limited

warranty

full warranty

warranty  is a manufacturer s statement indicating the bounds of coverage and noncoverage of any deficiency found in the product
 full


 limited-coverage limited-

warranty

is a statement of liability by a manufacturer that has no limits of coverage.

warranties  are those that assign responsibility for product deficiencies to a manufacturer even if the item was sold by a retailer.

 Implied

PRODUCT LIFE CYCLES

PLC refers to a products sales growth from the beginning to is peak, followed by a decline and its eventual withdrawal from the market.

STAGES


INTRODUCTION  GROWTH  MATURITY  DECLINE

Various forces affecting the life cycle

Consumer demand  Competition  Government rulings


The Introduction Stage

 

slow growth of sales heavy promotion expenditures in the relation of sales relatively high prices for product limited product offering like limited variations in sizes, color, and the like

The slow sales growth is attributed to the ff.



delays in the expansion of production capacity technical product problems that have to be worked out difficulty in gaining widespread distribution inertia on the part of costumer in trying the new product.

Heavy promotional expenditures are attributed

heavy sales cost involved in obtaining distribution the need for heavy advertising to create consumer awareness and trial


High prices are caused by  The need to recover investment cost in plant and equipment  low volumes of sales
Limited product offering are the caused by insufficiency of initial sales volume to justify variations in the product.

sales start climbing rapidly as distribution increases and the costumer are persuaded to try the product. the ratio of promotion expenditures to sales decreased. This is due the rapid increase in sale but without a corresponding increase in promotion expense. prices tend to remain high except when demand stimulation is required and entry of competitors is discouraged. new forms of the product appear, like new colors, new models, new sizes.

The growth stage

The maturity stage

 sales settle down as the

product becomes well-known well price reduction are used as a tool of competition  competition s intensified  the market becomes saturated

The decline stage

 a pruning of production
models an variations to eliminate those not producing profit  promotion expense are reduced  plans for phasing out the product made

The Importance of the Product Life Cycle Concept

 It provides him with a guide in
adapting appropriate marketing strategies  Knowledge of the PLC concept may be useful in many aspects of decisiondecision-making in marketing