MODULE FOR BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION (BSBA)

Marketing Management
WEEK 6

Lesson No. 7 Product Strategy

Schedule October 20 – 27, 2020
Learning Outcome Classify and organize product strategy.
Pre-Assessment AWESOME PRODUCTS!
Look at the example of innovative product ideas below that are so
beyond awesome. These things are wonderfully useful and we actually
don’t imagined being innovated or produced at all.

Fig. 1 – A Hoody Backpack Fig. 2 – A Foldable Bike

As a future business owner, think of a thing or product you wish to

produce or innovate someday. Provide any innovation and usefulness
about the product and how you are going to sell it. Provide a
picture/illustration (if any).
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Activities/Tasks/Lesson I. PRODUCT STRATEGY

 A product can be defined as anything that can be offered to a

market attention, acquisition, use, or consumption that might
satisfy a want or need.

 Product includes the following:

Physical Objects Services Persons

Places Organizations Ideas

A. Level of Product

 Customers will choose a product based on their perceived

value of it. Satisfaction is the degree to which the actual
use of a product matches the perceived value at the time of
the purchase. A customer is satisfied only if the actual
value is the same or exceeds the perceived value. Kotler
attributed five levels to products:

• the fundamental need or want that

Core
consumers satisfy by consuming the
Benefit
product or service

• a version of the product containing only

Generic
those attributes or characteristics
Product
absolutely necessary for it to function

• the set of attributes or characteristics

Expected
that buyers normally expect and agree
Product
to when they purchase a product

• the inclusion of additional features,

Augmented benefits, attributes or related services
Product that serve to differentiate the product
from its competitors

• this includes all the augmentations and

transformations a product might
undergo in the future.
Potential
Product • to ensure future customer loyalty, a
business must aim to surprise and
delight customers in the future by
continuing to augment products
B. Product Classification

Clearly no two products are exactly alike and therefore

each merits a unique marketing strategy. However, certain
products carry similar characteristics in terms of price level,
similarity between competing brands, and the way
consumers approach them in the buying process. It is often
useful to group these similar products into categories in
order to help set up marketing strategies for each segment.
This process is known as product classification.

Within the category of consumer products, there are four

main classifications:

Convenience Goods

• these are products that consumers purchase

often and habitually, without much thought given
• usually are low-cost items with little
differentiation between brands, and therefore
customers often pick a brand one time and then
remain with that brand without reconsidering
• examples include toothpaste, ketchup, soap, and
candy

Shopping Goods
• are higher-priced or more important items within
a person’s life and therefore it is a more
economic use of consumers’ time to compare
products
• examples include extremely large purchases like
houses and cars or more modest items like
clothing

Specialty Goods

• are products are so unique or have such a loyal

following that consumers will go to extensive
lengths to seek them out
• rather than comparing brands looking for an
attractive value, buyers of specialty goods focus
on seeking out the one specific product they are
looking for
• examples include Ferraris, GoPro cameras, and
iPhones

Unsought Goods

• products that consumers either do not know

about or would never think of buying
• are often items that people buy out of a sense of
fear or danger
• examples can include batteries, life insurance or
fire extinguishers
 Marketing Consideration for Consumer Products:

C. Individual Product Decisions

1. Product Attributes

 Developing a product or services involves defining the

benefits that it will offer.

 These benefits measured by:

a. Product Quality. It consists of two dimension: (1)

level where in developing product, the marketer
must choose quality level to support the product
position in market, (2) consistency in
conformance of quality and freedom from defects
and consistency in delivering a targeted level of
performance
 b. Product Features. A product can be offered by
varying features which should ask following
questions:
- how do you like the product?
- which specific features do you like the most?
- which features that you want us to add in the
products?

c. Product Designs. A design is a larger concept

than style where style simply describe
appearance of a product, but it doesn’t
necessarily make the product perform better while
good design contributes to a product’s usefulness
as well as it’s looks. Good design can attract
attention, improve product performance, cut
production costs and give strong competitive
advantage.

2. Branding

 A brand is a name, symbol, term, sign, design or

combination of these that identifies the maker or seller
of a product or services.

 Brand helps consumers identify the products and also

tell the buyer something about the product

 Brand Equity. Brands vary in the amount of power and

value. A powerful brand has high brand equity and
high brand equity provides competitive advantages. It
also will affected the consumer brand awareness and
loyalty.

 Brand Name Selection. A good name can add greatly

to a product’s success. The desirable qualities for a
brand name includes:

- suggest benefits and qualities

- easy to pronounce, recognize and remember
- distinctive
- translate easily to foreign language
- should be capable of registration and legal
protection

 Brand Sponsor. There are four sponsorship options:

- manufacturer’s brand
- private brand (e.g. hard to establish / costly or yield
high profit which cannot be bought at other
competitors)
- licensing
- use well-known celebrity
- co-branding (mix the company resources with
another company to create a product)
 Line Extension. When company introduces additional
items in a given product category under the same
brand name (e.g. flavors, colors, ingredients). It is a
low cost & low risk method in introducing the new
products. The risk is overextended and might lose its
specific meaning (e.g. Coke vs Diet Coke, Coke Zero,
Vanilla Coke)

 Brand Extensions. These involve the use of a

successful brand name to launch a new or modified
products in a new category (e.g. Honda - motorcycles,
cars, etc.). The advantage of this is instant recognition
and faster acceptance but if the brand extension fails,
it may harm the consumer attitude towards the brand
name.

 Multi-brands. The company often introduce additional

brands in the same category (e.g. watches – CASIO:
G-Shock for durability and Edifice for low-price items).
The advantage is to protect the flanks of its brand in
the industry. But it may not profitable when it only
meet small market share and the sources which they
have separated is wasted.

 New brands. A company may create a new brand

name when it enter a new category. Or because a
company might believe that the power of its existing
brand name is waning and need a new one (e.g.
Nestle to Milo, Bear brand, Nescafe, etc.)

 Mega-brands. This weeds out weaker brands. The

focus is the resources only on brands that can achieve
number one or two in the market and shares positions
in their categories (e.g. McDonald’s, Chevrolet)
 3. Packaging

 Packaging involve designing and producing the

container or wrapper for a product. The package may
include:
- the brands name
- the instruction manual
- ingredients

4. Labeling

 Labels may range from simple tags to complex graphic

attached with the package. It perform several function:
- identifies brand or product
- describe several thing about the product (i.e. maker
of the product, locations, the expiry date, etc.)
- promote the product (i.e. new product = new
formula)

5. Product Support Services

 The company’s offer includes some form of customer

service, of product support services. The support
services do also belong to the significant individual
product decisions because they contribute to the
customer’s overall brand experience. The key is to
keep customers happy after the sale in order to build
lasting relationships.

Resources/References 1. Marketing Management (Knowledge and Skills) 6t Edition by J.

Paul Peter & James H. Donnelly, Jr. pp 86-102
2. https://www.slideshare.net/n_izzuddin/chapter-5-product-strategy
3. https://www.cgma.org/resources/tools/cost-transformation-
model/kotlers-five-product-level-model.html
4. https://content.personalfinancelab.com/finance-
knowledge/marketing/classification-of-products-and-
services/?v=a25496ebf095
5. https://marketing-insider.eu/individual-product-decisions/
Key Concepts/Focus Level of Product
Points Product Classification
Individual Product Decisions
Post-Assessment and THE LEVEL OF PRODUCT!
Feedback In this assessment, think or research for a product or service where
each level of the product is identified - from the core benefit to its
potentials.

Sample Product: Coca-Cola

• the core benefit of Coca-Cola is to quench a

Core Benefit
thirst

• the generic product is a burnt vanilla

Generic
smelling, black, carbonated, and sweetened
Product
fizzy drink
 Expected • the expected product is that the customer’s
Product Coca-Cola is cold

Augmented • Coca-Cola’s augmented product is that it

Product offers Diet-Coke and Coke-Zero

Potential • to continue to delight customers over time

Product the competition prizes change frequently.

Sample Service: Hotels

• to provide somewhere to rest or sleep when

Core Benefit
away from home

Generic • a bed, towels, a bathroom, a mirror and a

Product wardrobe

Expected • include clean sheets, some clean towels, Wi-

Product fi, and a clean bathroom

Augmented • inclusion of a concierge service or a free

Product map of the town in every room

• a different gift placed in the room each time a

Potential customer stays - example some chocolates
Product on one occasion, some luxury water on
another, etc.

Please begin here:

(P.S. it is better if you can provide me with your own example)

Service/Product: _______________________

• ____________________________________
Core Benefit
____________________________________

Generic • ____________________________________
Product ____________________________________

Expected • ____________________________________
Product ____________________________________

Augmented • ____________________________________
Product ____________________________________

Potential • ____________________________________
Product ____________________________________
 Assignment/Homework What can you infer with this picture?

Prepared by:

DENIS DY BONAOBRA
Instructor
Dr. Ruby Lanting-Casaul Educational Foundation, Inc.
Tomas Cabiles St., San Juan, Tabaco City, Albay
denisdybonaobra@gmail.com
09957208222