Chapter 2: Product concept and dimensions Flashcards
(22 cards)
Product concept
The product is the most important element and the axis around which the marketing strategy is designed.
Products are designed to satisfy a consumer’s need or wish
Hierarchy of value
- Basic benefit
- Basic product
- Expected product
- Increased product
- Potential product
Classification of products according to tangibility
- Tangible
- Intangible
Classification of products according to market
- Of consumption
- Organizational
Classification of products according to fungibility
- Durable
- For immediate consumption
Classification of products according to convenience
- Recurrents
- Purchase by impulse
- Of emergency
Classification of products according to frequency and purchase of effort
- Convenience
- Sporadic buy
- Specialty
Key concepts in product portfolio
- Range
- Product Line
- Product model
- Range length
- Width of range
- Depth of line
- Consistency of products
Pros and cons of a large product range
In favor:
- Increased market share
- More choice
- Easier negotiations with distributions
- Reducing risks
Against:
- Effect on product costs
- More complex internal organization
- Complexity with suppliers
Product portfolio strategies: width
- Downward or upward extension
- Extension in both directions
- Creating a line that facilitates cross-selling
Boston matrix analysis elements
- Relative market share
- Growth rate
Elements that help differentiation
- Attributes
- Brand
- Packaging
- Label
- Communication
- Distribution channel
- Price
- Added services
- Experience
- Affinity with the buyer
Differentiation definition
Highlighting the characteristics of a product that can contribute to it’s uniqueness
Positioning definition
Place that a brand occupies in consumers minds in relation to competitors
Positioning process steps
- Segmentation
- Targeting
- Positioning
- Map
- Ideal positioning
- Define the strategy
- Test results
Product Life Cycle definition
Evolution of sales and profits from the product launch
Product Life Cycle stages
- Introduction
- Growth
- Maturity
- Decline
PCL characteristics: Introduction
- Low sales
- Great uncertainty
- High prices
- Scarce benefits
- Little competition
PCL characteristics: Growth
- High sales and profit growth
- Mass market
- First compettitors appear
- Reduced unit costs
PCL characteristics: Maturity
- Halted sales and profits
- Intense competition
- Market niches
- Sector:
Large companies
Small companies
PCL characteristics: Decline
- Sales drop and substitutes appear
- Profit decreases
- Abandon and replace product
- Slow withdrawal
Relaunching
Elimination
Marketing in services concepts
- Santesmases: Application of human or mechanical efforts to people, animals or objects
- Kotler: A service is any action that one party can offer to other
