Product Strategy

Product - Good, service or idea consisting of tangible or/and intangible features which satisfies consumers and isreceived in exchange for money or some other unit of value.

Core - Main function of a product, allows marketing managers to understand the product and detect for opportunites and threats or substitutes.
Tangible - Physical elements of the product.
Augmented - Additions to the product to enhance its benefits, allows consumers to experience better functional benefits.

Consumer Products
Durable - Small replacement market, long lasting, usually of high value, use personal selling strategy
Non-durable - Big replacement market, need to rebuy to experience benefits, consumable, usually of lower value, place of sale located at convenient places
Services - Intangible(Depends on performance), inconsistent(Varies from day to day, person to person), inventory(Idle production capacity, supply exceeds demand), inseperablility(Hard to differentiate service from deliverer)

Convenience - None to low loyalty, low level of involvement, need repetition advertisement to serve as reminder.
Shopping and Specialty - Higher level of involvement, emotional content involved, need to provide more information to consumers. Differences between these two lie in buyers, not products
Shopping - Superficial decision making, effort put in not as great.
Specialty - Lots of effort put in, absolute loyalty, consumers are well-knowledged, critical about choices

Industrial Products
Entering - Products which enter into the manufacturing process to result in the final product, eg. raw materials. Look out for price, delivery, quality
Foundation - Products which support the operations of the company. Usually high-valued, eg. building, machinery. Look out for financing, life-time cost, service support(maintenence, repair, spare parts)
Facilitating - Not critical but make life easier for worker, usually of low value, and exist in large quantity(Not worth to take stock), eg. pens, pencils. Look out for ease of ordering(Electronic purchasing). Outsourcing is easy.

Product Mix
Product Mix - A collection of products offered by a company
Product Line - A collection of inter-related products(product category)
Product Length - Number of items within a product line(eg. sport shoes, formal shoes)
Product Width - Number of product lines(eg. shoes, clothing)
Product Depth - Number of variants(Items within an item of the product line)(eg. red sport shoes, green sport shoes)

Branding - Name, slogan, colour, logo etc given to a product for identification and to distinguish it from competitors' products. May add personality to the brand as consumers tend to associate products with human characteristic and buy one which fit their own personality

Benefits of Branding
Buyers - Easy to look for products, aids in search effort, provide assurance of quality as branding is a promise from company
Sellers - Allows for differentiating of products from competitors', creates brand loyalty, protects own brand using intellectual rights law, branding building is vital for long term success

Branding Strategies
Distinct Identity - Use an unique name, not one that is a common noun or publicly-owned name such as numbers, prevent it from entering the dictionary as it will become a verb or common noun, rendering it to public usage
Association - Associates brand with its product such as benefits, slogans may be used for easy remembrance
Acceptance - Depend on whether the products are about to deliver its promised benefits and assurance such as safety
Equity - Build up the brand as its an intangible asset.

Individual Brand Identity - New product has new name, expensive to introduce new brand to market, precise association to the product
Umbrella Brand Identity - Using of current existing brand for new product, tap o the success of current existing brand, cheaper to execute, risky-will bring down the brand name and the successful product if the new one fails, hard to associate new product with current brand-have to use general terms

Brand Repositioning - Change of identity or association to target new market segment, hard to implement and takaes a long time to change the mindset of the consumers
Brand Extension - Using of the umbrella brand identity, may dilute the current product brand if too extensively used and cause the failure of the product, have to come up with association with the new product
Generic Brand
Globalised and Localised - Different brands for the same products in different countries may cause confusion especially to those travellers, thus globalise brand is more common these days.

Packaging
Protection of Content - Prevent spillage and spoilage, good packaging will extend the shelf life
Usage - Ease of opening and usage
Logistic - Ease of displaying in the stores
Green - Environmental-friendly, using of non-biodegradable materials
Attracion and Influence - Must be able to attract consumers and influence them to buy the products

Labeling
Influence - Small parts of the content may attract and influence consumers to buy
Correct Usage - Teaches the consumers on the correct method of using the product
Safety, Warnings, Precautions
When Where Who Made It
Requirement by Law - Certain attributes have to be included by law.

Market Segmentation

Market Segmentation - Dividing consumers into groups according to 1)response to marketing actions 2)identity, needs and characteristics

Why segment? 1)To understand consumers better 2) To respond faster and better to consumer's needs, using different strategies for different segments->More productive.

3 basic market preference patterns 1) Homogeneous preference-For mature products, use mass marketing 2) Diffused preference-Use customised marketing. 3)Clustered preference-Use differentiated marketing

Identification Variables (Consumers)
1)Geographic - Places of work and study and stay, can be micro or macro.
2)Demographic - Gender, age, income, education, race, religion, social class, family life cycle, household size, household structure, nationality(within a country)
3)Psychographics - Lifestyle, personality(introvert, extrovert), events(funeral, marriage)

Identification Variables (Business)
1)Industry(different industries need products for different uses)
2)Size
3)Ownership(Owners from different countries buy differently)
4)Technology - Ability to service machineries after buying or need services
5)Vertical scope - Areas which they demand from company, from transport to logistics
6)Organisation of purchasing department - Centralised or de-centralised

Response Variables
1)Usage - Non, occasional, light(effective marketing), heavy(Bulk discounts)
2)Readiness - Awareness, knowledge, interest, trial, adoption
3)Loyalty - None, switching, absolute (80/20 rule - 80% of sales from 20% of consumers)
4)Benefits sought/Product preference - Prestige or basic benefit / Different products for same needs.
5)Occasion for usage
6)Urgency for use
7)Price sensitivity
8)Openness to advertising messages
9)Method of usage
10)Place of purchase/usage

Search for distinct groups, use less variables, usually choose the best one as more variables will cause losing of groups.

Choosing Segment
1)Favourable response - choose one which I can provide what they want
2)Size and growth - A growing big size is desired to ensure profitability
3)Competitive intensity - A fast growing segment is attractive, may face lots of competition
4)Accessibility to segment/capability - Resources to reach the segment, hard to open a new distributing channel in a new market
5)Opportunities for differentiation - A firmer holding if able to differentiate favourably from competitors

Differentiaing - 1) Areas which are important to target segment 2) Areas I am strong in compared to competitors

Product Differentiation Examples
1)Reliability
2)Innovativeness
3)Style of products
4)Ease of use
5)Quality
6)Taste

Service Differentiation Examples
1)Responsiveness
2)Courtesy and human touch
3)Competency
4)Styling (hairdresser)
5)Trust(Banker)
6)Value(Airlines)

Positioning - 1)Provide a frame of reference for products in the consumer's mind 2)Represent a point of differentiation, focus on benefits to hightlight to consumers

Examples
1)Attributes
2)Benefits
3)User
4)Application/usage occasion
5)Product category - Position new products against other categories
6)Competitor - Position against competitors