Product

All you need to know about products

(For now :) )

Classification of Consumer Goods

• All consumer goods fall into one of three classifications:

– Specialty goods– shopping goods – convenience goods

Specialty Goods

• A specialty good is any product that consumers will go out of their way to buy because they see it as having particularly unique advantages

• If consumers know exactly what they want, and will accept no substitutes, they view the product that will satisfy their wants as being extremely desirable

Shopping goods

• Shopping goods are products that consumers purchase after comparing the price, quality, and suitability of similar goods.

• Shopping goods can be compared in two ways: either by price, because the consumer views all of the products to be of equal quality; or by quality, with price being less important

Brands, Brand Names, and Trade marks

• A brand is a title, symbol, or combination of both that identifies a product in the mind of a consumer and sets it apart from it’s competitors.

• A brand name is the verbal portion of a brand, the part that can be spoken.

• A trademark is a legally protected name or symbol which is owned exclusively by the company which is represents.

Brand loyalty

• There are 3 levels of brand loyalty:

– Brand insistence– Brand preference – Brand recognition

• Successful brands are worth fortunes!• Brand Families vs individual Brands

Brand insistence

• highest level of brand loyalty • A product that has achieved brand insistence

requires very little promotion either to retailers or to consumers

• Consumers are already convinced and only need to know where the product can be purchased

Brand preference

• next highest level of loyalty

• The greatest concern…to make sure that their brand is available to all potential customers

• placing the product in many retail outlets and ensuring that a sufficient stock is available

Brand recognition

• Brand recognition is the lowest level of brand loyalty

• Brand loyalty does not happen all at once. First a product must be recognized; later it will be preferred and, perhaps, eventually insisted upon.

Packaging

• Packaging is a part of the total product and covers the following :– contain the product– facilitate storage and use– protect and preserve the product– identify and promote the product– be cost effective

Facilitating Storage and Use

• Good package makes product easy to use:– spouts on milk containers– one-at-a time bag dispensers– twist off caps– re-sealing bags for crackers, cheese, etc..

Protecting and preserving Product

• During transport (light bulb, Computer, chips)

• To prevent spoilage (food products)

• Increase shelf life (Aseptic juice cartons)

• protection against tampering (Pharmaceuticals)

• Protect against theft

Identify and Promote Product

• Brand name often appears on label

• Labels (Often by law) give lots of information:– ingredients and nutritional info– size, weight, two languages, bar (UPC) code,

other– artistic, and aimed at target market (Cereal)

Product life cycle

• Product life cycle is it’s history of sales from the time it enters the market until it is no longer sold

• Four stages:– introduction– growth – maturity – decline

Introduction

• Promotion is very important to create awareness

• Intensive advertising, expensive

• Often offered at lower introductory prices

• People who purchase at this stage are termed “innovators” or “early adapters”and have been targeted by the marketer

Growth

• Sales increase rapidly

• sought after product

• money still spent on promotion

• Many products die here (fads)

• If very successful… at this stage many competitors enter the field

Maturity

• Sales level out

• competition causes prices to drop

• advertising shows consumers the subtle differences

• Consumer demand predictable so companies can plan accordingly

Decline

• Sales diminish

• producers drop product or spend more on R&D to offer consumers something new

• some producers “plan obsolescence” a strategy by which products are designed to become out of date (Fashion, computers, games) so that the life cycle can begin again.

New Product development

• To be successful must always develop new products.

• 2/3’s of all new products never get past the introductory stage so planning is very important.

Class AssignmentYou are the new owner of a glacier fed BC Rocky Mountain water company. You are to market your prestigious product in the Southern United States (California to Florida).

A. Decide on a brand name for your product. Include a paragraph explaining the rational for choosing your brand name.

B. Design a logo for your product (either by hand or using a graphics program)

C. Design a label for your product. Include all of the information you think is important, and all that is required by Law. Hint: You may want to look at some similar products in the recycling bins.

New Product development process:

• Generating ideas

• screening ideas

• evaluating ideas

• preparing a prototype

• testing

• commercialization