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Core Benefit: Basic Product

The document discusses different levels of a product from the core benefit that satisfies a basic consumer need, to the basic functional version of the product, to expected and augmented products with additional features, and finally the potential product and future augmentations. It also defines different types of consumer products based on frequency of purchase and price points, as well as strategies for branding, product mix, pricing, and marketing communications.

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Raihan
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95 views12 pages

Core Benefit: Basic Product

The document discusses different levels of a product from the core benefit that satisfies a basic consumer need, to the basic functional version of the product, to expected and augmented products with additional features, and finally the potential product and future augmentations. It also defines different types of consumer products based on frequency of purchase and price points, as well as strategies for branding, product mix, pricing, and marketing communications.

Uploaded by

Raihan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Levels of a Product

Core benefit: Fundamental need or want that consumers satisfy by


consuming the product. Ex, the need to process digital images.
Basic product: Version of the product containing only those attributes
absolutely necessary for it to function. Ex, the need to process digital
images could be satisfied by a generic, low-end, personal computer
using free image processing software or a processing laboratory.
Expected product: Set of attributes that buyers normally expect and
agree to when they purchase a product. Ex, the computer is specified to
deliver fast image processing and has a high-resolution.
Augmented product: Inclusion of additional features, benefits,
attributes to differentiate the product from its competitors. Ex, the
computer comes pre-loaded with a high-end image processing software
for no extra cost.
Potential product: Includes all the augmentations a product might
undergo in the future. Ex, Customer receives ongoing image processing
software upgrades with new and useful features.
Product Classifications- Consumer Products
Convenience Products: Buy frequently & immediately - Low
priced - Mass advertising - Many purchase locations - i.e Candy,
newspapers

Shopping Products: Buy less frequently - Higher price - Fewer


purchase locations - Comparison shop - i.e Clothing, cars,
appliances

Specialty Products: Special purchase efforts - High price –


Unique characteristics - Brand identification - Few purchase
locations - i.e Lamborghini, Rolex

Unsought Products: New innovations - Products consumers don’t


want to think about these products - Require much advertising &
personal selling - i.e Life insurance, blood donation
Individual Product Decisions
- Product Attributes: Product quality, features, style & design.
- Branding – Labeling – Packaging - Product Support Services.

Four Brand Strategies


- Line Extension: Existing brand names extended to new forms, sizes,
and flavors of an existing product category. Ex: Dannon Yogurt
Flavors.
- Brand Extension: Existing brand names extended to new or modified
product categories. Ex: Barbie Electronics.
- Multi-brands: New brand names introduced in the same product
category. Ex: Seiko, LaSalle & Pulsar.
- New Brands: New brand names in new product categories. Ex.
Windex (by acquisition).
Product Mix Decisions
Product Mix: all the product lines & items offered.
-Width: number of different product lines
Ex: Kellogg’s product lines consist of: (1) Ready-to-eat cereal, (2) Pastries and breakfast
snacks, (3) Crackers and cookies etc.
-Length: total number of items in product lines
Ex: A car company with two car product lines (3-series and 5-series). Within each
product line series are three types of cars. In this example, the product length of the
company would be 6.
-Depth: number of versions of each product
Ex: continuing with the car company example above, a 3-series product line may offer
several variations such as coupe, sedan, truck, and convertible. In such a case, the depth
of the 3-series product line would be 4.
Cost-Based Versus Value-Based Pricing
Cost-Based Pricing Value-Based Pricing
Product
Product Customer
Customer

Cost
Cost Value
Value

Price
Price Price
Price

Value
Value Cost
Cost

Customers
Customers Product
Product
Competition-Based Pricing
1. Going-Rate: Company sets prices based on what the competitors are
charging.
2. Sealed-Bid: Company sets prices based on what they think the
competitors will charge.

Price-Quality Strategies
1. Premium Strategy: Higher quality, higher price. Ex: iPhone.
2. Good-value Strategy: Higher quality, lower price. Ex: Small, low-
priced cars offered by car companies.
3. Overcharging Strategy: Lower quality, higher price. Ex: Biman
Bangladesh Airlines.
4. Economy Strategy: Lower quality, lower price. Ex: Walton Laptop.
New Product Pricing Strategies
1. Market Skimming: Setting a high price for a new product. Ex:
Apple charges very high prices for it’s new iPhone models.
2. Market Penetration: Setting a low price for a new product. Ex:
Netflix is offering free movies to attract new customers.

Product Mix Pricing Strategies


1. Product Line Pricing: Ex: iPhone 11 $1100, iPhone 11Max $1300
2. Optional Product Pricing: Headphone pricing along with mobile.
3. Captive-Product Pricing: Printer + Cartridge pricing.
4. By-Product pricing: Pricing low-value by-products to get rid of
them. Ex: Refined oil & it’s by-products.
5. Product-Bundle Pricing: Dell offers personal computer as a bundle
of accessories. Gillege razor + shaving foam etc.
Price-Adjustment Strategies
1. Discount & Allowance:
-Cash Discount
-Quantity Discount
-Functional Discount: 10% extra/discount on Retailer-end.
-Seasonal Discount
-Trade-In Allowance: Sony/Samsung Old TV Exchange.

2. Segmented:
-Customer: For female, male, kids.
-Product Form: Mini Pack, Jumbo Pack.
-Location: Low priced back seats in a movie theatre.
-Time: Price offers before festival.
Price-Adjustment Strategies
1. Psychological Pricing: Price Used as a Quality Indicator.
Ex: ‡hUvi `vg †ekx †mUv fv‡jv g‡b Kiv|
2. Promotional Pricing: Short-term pricing for special
events.
3. Geographical Pricing: iscyi G †c‡Uªvj Gi `vg †ekx, †m
Zzjbvq PÆMªvg G `vg GKUz Kg|
4. International Pricing: Adjusting prices for international
markets. Ex: Walmart branded shop.
Marketing Communication Mix
Advertising: Non-personal presentation.
Personal Selling: Personal effort. Ex. Insurance
Direct Marketing: Through Email, fax, social media etc.
Public Relations: An effort, not advertising – If someone else
advertise you in a media/communication channel – ex.
Politicians.
Sales Promotion: Through offers or discount.
Steps in Developing Effective Communication
Step 1: Identifying the target audience (ex. Targeting women)
Step 2: Determining the communication objectives
Step 3: Design a Message
Message Content – Message Structure – Message Format
Step 4: Choosing Media
Personal or Non-personal Com Channel
Step 5: Selecting the Message Source
Who is giving the message like Amitabh or a doctor about
a toothpaste
Step 6: Collecting Feedback.
Buyer Readiness Stages
1. Awareness: Oxford is going to introduce an effective vaccine.
2. Knowledge: In which trial level the vaccine belongs now.
3. Liking: Oxford vaccine might be better.
4. Preference: Comparing Oxford vaccine with other
vaccines available.
5. Conviction: Oxford vaccine will be the best though it
will be a bit expensive.
6. Purchase: Doing the purchase.

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