Product and Promotion Creating and Communicating Value 2 LO1 What is a product and product classifications LO2 What is product differentiation and the key elements of product planning ID: 686903
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Slide1
©2013
Cengage
Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Slide2
Product and Promotion:
Creating and Communicating Value
2
LO1
What is a product and product classifications?
LO2
What is product differentiation and the key elements of product planning?LO3 What is innovation and how does it relate to the product life cycle?LO4 What is promotion and integrated marketing communication?LO5 What is the process to developing promotional messages?LO6 What is the promotional mix and available tools?Slide3
Product: It’s Probably More
Than You Thought
3
Product
– anything a company offers to satisfy customer needs and
wantsSlide4
Services: A Product by Any Other Name
4
Intangibility
Inseparability
Variability
Perishability
Most services embody these qualities:Slide5
Goods and Services Spectrum
5Slide6
Product Layers: Peeling the Onion
Core benefit
– satisfies the consumers need
The actual product
– the physical good
Augmented product
– warrantees, free service, instruction manuals, help lines
6Slide7
Consumer Product Categories
7
Convenience Products
Shopping Products
Specialty Products
Unsought Products
Consumer Products
– products for personal use or consumptionSlide8
Business Product Categories
8
Installations
Accessory Equipment
Maintenance, Repair, and Operating Products
Raw Materials
Component Parts & Processed Materials
Business ServicesBusiness Products – purchased to use directly or indirectly in the production of another productSlide9
Product Quality
9
Quality Level
– how well a product performs its core
functions
Product Consistency –
how reliably a product delivers it promised level of qualitySlide10
Product Lines and the Product Mix
10
Product Mix
– the total
number of product
lines by a single
firm
Product Line – products that are closely relatedCannibalization – A new product “eats” the sales of an existing lineSlide11
Branding
11
Brand
- a product’s
identity that sets it
apart from other
players in the same categoryBrand Equity – the extra money that consumers will spend to buy that brandBrand Name – a catchy, memorable name is a powerful part of strong brandNational brands are brands that the manufacturer produces and markets, while store brands are brands that retailers label and market.Slide12
Line Extensions versus Brand Extensions
12
Line
Extensions
Similar
products offered
under the same
brand nameBrandExtensionsA product in a new categoryunder an existing brand nameSlide13
Co
branding
13
Cobranding
-
established brands from different companies join forces to market the same
productSlide14
Packaging
14
Protect the Product
Provide Information
Facilitate Storage
Suggest Product Uses
Promote the Brand
Attract Buyer AttentionSlide15
Levels of Innovation
15Slide16
The New Product Development Process
16
Idea Generation
Idea Screening
Analysis
Development
Testing
CommercializationThe adoption of new products is called diffusion; consumers try new things at different rates. Consumers range from first adopters to laggards.Slide17
The Product Life Cycle: Maximizing Results over Time
17Slide18
Integrated
Marketing
Communication
18
Coordinate promotional messages
Create
unified impression in the mind of customers
Identify key points of contact between product and target marketIntegrated Marketing Communication is the coordination of messages through multiple promotional vehicles.Slide19
An International Perspective
DeBeers tried running ads in Japan using a proven western strategy
But a Japanese woman would shed tears and feign anger that her husband would spend so much money
The revised DeBeers campaign featured a man and wife in their tiny apartment
Receiving a diamond, the wife chides her extravagant husband ,“Oh, you stupid!”
Taking a big idea to a foreign market requires careful research
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Source: Professor Paul Herbig, Tristate University, International Marketing Lecture Series, Session 6, International Advertising, http://www.tristate.edu/faculty/herbig/pahimadvstg.htm, accessed June 1, 2005; Taking Global Brands to Japan by Karl Moore and Mark Smith, The Conference Board website, http://www.conference-board.org/worldwide/worldwide_article.cfm?id=243&pg=1, accessed June 1, 2005.Slide20
The Promotional Mix: Communicating the BIG IDEA
20
Advertising
Sales Promotion
Direct Marketing
Personal Selling
Emerging Tools
These tools can help communicate the Big Idea to your target market.Slide21
Emerging Promotional Tools
21
Internet Advertising
Social Media
Product Placement
Advergaming
Buzz Marketing
SponsorshipsSlide22
Advertising & Media Spending
22
Advertising
is paid,
nonpersonal
communication, designed to influence a target audience. Television remains the #1 advertising media.
But it is fragmenting….Slide23
Promotion
Consumer Promotion
Stimulate immediate sales
Premiums
Promotional Products
Samples
Coupons
RebatesDisplaysTrade PromotionStimulate wholesalers and retailers to push specific productsSpecial DealsAllowancesTrade ShowsContestsSweepstakesSpecial Events23Slide24
Starbucks Samples
Samples drive
immediate
purchases
Starbucks invited customers to sample their new VIA coffees in 2010
Sampling allows consumers to try products before purchase
Costco and Trade Joe’s do very well with sampling strategies
24Slide25
Public Relations
25
Create positive relationships with the public
Sometimes called “publicity”
The
media looks for newsworthy stories
Smart firms push potential news of their company
The advantage of PR is that it is usually credibleThe disadvantage is that marketers don’t control media perceptionsSlide26
Personal Selling
26
B
uilding
relationships
Personal selling is best for:
High-ticket items
Complex productsHigh-volume customersSales People:Prospect and QualifyPreparePresentHandle ObjectionsClose SalesFollow-upPerson-to-Person presentation of productsSlide27
Looking Back
What is a product and product classifications?
What is product differentiation and the key elements of product planning?
What is innovation and how does it relate to the product life cycle?
What is promotion and integrated marketing communication?
What is the process to developing promotional messages?
What is the promotional mix and available tools?
27