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LEARNING OBJECTIVES
In this chapter, we will address the following questions:
1. What are the characteristics of products, and how do marketers classify products?
2. How can companies differentiate products?
3. How can a company build and manage its product mix and product lines?
4. How can companies use packaging, labeling, warranties, and guarantees as marketing
tools?
5. What strategies are appropriate for introducing new offerings and influencing
adoption?
6. What strategies are appropriate in different stages of the product life cycle?
EXECUTIVE SUMMARY
A product is anything that can be offered to a market to satisfy a want or need. The
marketer needs to think through the five levels of the product: the core benefit, the basic
product, the expected product, the augmented product, and the potential product.
Marketers classify products on the basis of durability, tangibility, and use (consumer or
industrial). Products may be differentiated by form, features, performance, conformance
quality, durability, reliability, repairability, style, customization, and design. Service
differentiators include ordering ease, delivery, installation, customer training, customer
consulting, and maintenance and repair.
A product mix can be classified according to width, length, depth, and consistency,
four dimensions for developing the company’s marketing strategy and deciding which
product lines to grow, maintain, harvest, and divest. Physical products must be packaged
and labelled, may have well-designed packages, and may come with warranties and
guarantees. The new-product development process consists of: idea generation,
screening, concept development and testing, marketing strategy development, business
analysis, product development, market testing, and commercialization. The adoption
process - by which customers learn about new products, try them, and adopt or reject
them – is influenced by multiple factors. Each product life-cycle stage (introduction,
growth, maturing, and decline) calls for different marketing strategies.
OPENING THOUGHT
Students will be familiar with the “idea” of a tangible product—the physical
manifestation—a cell phone or a pair of favorite jeans or shoes. However, students may
have trouble understanding the “totality” of the product physically demonstrated—the
core benefit, the basic product, expected product, augmented, and potential product. The
C H A P T E R
9
SETTING PRODUCT
STRATEGY AND
INTRODUCING
NEW OFFERINGS