1. TOP 10 LEARNING CONCEPTS
Ch. 12: Setting Product Strategy
Windell de Vera
May 11, 2012
windelldevera.blogspot.com
www.

2. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
1. Know the Five Product Levels
2. Distinguish the Product
Classification Schemes
3. Compare the Consumer and
Industrial Goods Classification
4. Understand Product
Differentiation
5. Learn Service Differentiation
www.windelldevera.blogspot.com

3. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
6. Consider Product Hierarchy
7. Deal with the Product
Systems and Mixes
8. Use the Product Line Analysis
9. Master the Product-Mix
Pricing
10. Emphasize Packaging
windelldevera.blogspot.com
www.

4. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
1. Know the Five Product Levels
2. Distinguish the Product
Classification Schemes
3. Compare the Consumer and
Industrial Goods Classification
4. Understand Product
Differentiation
5. Learn Service Differentiation
www.windelldevera.blogspot.com

5. Concept 1:
Know the Five Product Levels
Core benefit
Basic
product
Expected
product
Augmented
product
Potential
product
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

6. Concept 1:
Core benefit: It is the fundamental
level. It is the benefit the customer is
really buying.
Core benefit
e.g. A customer
Basic
product
buys a cell
Expected phone in order
product to communicate.
Augmented
product
Potential
product
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

7. Concept 1:
The marketer has to turn the core
benefit into the basic product.
Core benefit
e.g. A marketer
Basic
product
sells a cell phone
Expected can be used to
product communicate
Augmented with others.
product
Potential
product
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

8. Concept 1:
Expected product is a set of attributes
and conditions buyers normally expect
when they purchase this product.
Core benefit
e.g. A customer
Basic
product
buys a cell
Expected phone that can
product be used for call
Augmented and text.
product
Potential
product
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

9. Concept 1:
Augmented product is a product that
exceeds customer expectations.
Core benefit
e.g. The cell
Basic
product
phone also
Expected features
product camera, radio
Augmented and internet.
product
Potential
product
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

10. Concept 1:
Potential product encompasses all the
possible augmentations and
transformations the product or offering
might undergo in the future.
Core benefit
e.g. A
Basic
product
holographic cell
Expected phone that
product features the
Augmented images in 3D
product
Potential
and runs at 4G.
product
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

11. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
1. Know the Five Product Levels
2. Distinguish the Product
Classification Schemes
3. Compare the Consumer and
Industrial Goods Classification
4. Understand Product
Differentiation
5. Learn Service Differentiation
www.windelldevera.blogspot.com

12. Concept 2:
Distinguish the Product Classification
Schemes
Durability
Tangibility
Use
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

13. Concept 2:
Non-durable goods are tangible
normally consumed in one or a few
uses.
The appropriate
Durability strategy is to
make it
available in
Tangibility many
locations, charg
e a small
markup and
Use advertise
heavily to
induce trial.
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

14. Concept 2:
Durable goods are tangible goods that
survive many uses.
These normally
Durability require more
personal selling
and
Tangibility service, comma
nd a higher
margin, and
require more
Use seller
guarantees.
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

15. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
1. Know the Five Product Levels
2. Distinguish the Product
Classification Schemes
3. Compare the Consumer and
Industrial Goods Classification
4. Understand Product
Differentiation
5. Learn Service Differentiation
www.windelldevera.blogspot.com

16. Concept 3:
Compare the Consumer and Industrial
Goods Classification
Consumer Goods Industrial Goods
Classification Classification
Materials and
Convenience
Parts
Shopping Capital Items
Supplies/business
Specialty
services
Unsought
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

17. Concept 3:
Consumer Goods Classification are
classified according to consumer
shopping habits.
Consumer Goods
Classification
Convenience
Shopping
Specialty
Unsought
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

18. Concept 3:
Convenience goods are usually
purchased frequently, immediately,
and with little effort.
Consumer Goods
Classification
Convenience
Shopping
Specialty
Unsought
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

19. Concept 3:
Shopping goods are goods that the
customer, in the process of selection
and purchase, compares on the basis
of suitability, quality, price and style.
Consumer Goods
Classification
Convenience
Shopping
Specialty
Unsought
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

20. Concept 3:
Specialty goods are goods with unique
characteristics or brand identification
for which consumers spend
exceptional buying effort.
Consumer Goods
Classification
Convenience
Shopping
Specialty
Unsought
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

21. Concept 3:
Unsought goods are those products or
services that consumers are not
readily aware of or do not normally
consider buying..
Consumer Goods
Classification
Convenience
Shopping
Specialty
Unsought
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

22. Concept 3:
Industrial goods are those products
used in the production of other goods.
Industrial Goods
Classification
Materials and
Parts
Capital Items
Supplies/business
services
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

23. Concept 3:
Raw material products include farm
products and natural products,
manufactured materials and parts
include component materials and
component parts.
Industrial Goods
Classification
Materials and
Parts
Capital Items
Supplies/business
services
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

24. Concept 3:
Capital items: installations and
equipments.
Industrial Goods
Classification
Materials and
Parts
Capital Items
Supplies/business
services
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

25. Concept 3:
Supplies include maintenance and
repair items and operating supplies.
Business services include maintenance
and repair services and business
advisor services.
Industrial Goods
Classification
Materials and
Parts
Capital Items
Supplies/business
services
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

26. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
1. Know the Five Product Levels
2. Distinguish the Product
Classification Schemes
3. Compare the Consumer and
Industrial Goods Classification
4. Understand Product
Differentiation
5. Learn the Service
Differentiation
www.windelldevera.blogspot.com

27. Concept 4:
Understand Product Differentiation
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

28. Concept 4:
Form: The size, shape, or physical
structure of a product.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

29. Concept 4:
Features: Most products can be offered with
varying features that supplement its basic
function.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

30. Concept 4:
Customization: It refers to the tailoring of the
campaign according to the needs of an
individual or groups of individuals.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

31. Concept 4:
Performance: It is the level at which
product’s primary characteristics operates.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

32. Concept 4:
Conformance: It is the degree to which all the
produced units are identical and meet the
promised specifications.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

33. Concept 4:
Durability: A measure of the product’s expected
operating life under natural conditions, is a
valued attribute for certain products.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

34. Concept 4:
Reliability: A measure of the probability that
a product will not malfunction or fail within a
specified time period.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

35. Concept 4:
Repairability: It is a measure of the ease of
fixing a product when it malfunctions or fails.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

36. Concept 4:
Style: It described the product’s look and feel
to the buyer.
Product Form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

37. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
1. Know the Five Product Levels
2. Distinguish the Product
Classification Schemes
3. Compare the Consumer and
Industrial Goods Classification
4. Understand Product
Differentiation
5. Learn Service Differentiation
www.windelldevera.blogspot.com

38. Concept 5:
Learn Service Differentiation
Ordering
ease
Returns Delivery
Maintenance
Installation
and repair
Customer Customer
consulting training
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

39. Concept 5:
Ordering ease: It refers to how easy it is for
the customer to place an order with
company.
Ordering ease
Returns Delivery
Maintenance
Installation
and repair
Customer Customer
consulting training
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

40. Concept 5:
Delivery: It refers to how well the product or
service is delivered to the customer.
Ordering ease
Returns Delivery
Maintenance
Installation
and repair
Customer Customer
consulting training
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

41. Concept 5:
Installation: It refers to the work done to
make a product operation in its planned
location.
Ordering ease
Returns Delivery
Maintenance
Installation
and repair
Customer Customer
consulting training
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

42. Concept 5:
Customer training: It refers to training the
customer’s employees to use the vendor’s
equipment properly and efficiently.
Ordering ease
Returns Delivery
Maintenance
Installation
and repair
Customer Customer
consulting training
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

43. Concept 5:
Customer consulting: It refers to data,
information systems, and advice services
that the seller offers to buyers.
Ordering ease
Returns Delivery
Maintenance
Installation
and repair
Customer Customer
consulting training
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

44. Concept 5:
Maintenance and repair: It describes the
service program for helping the customers
keep purchased products in good working
order.
Ordering ease
Returns Delivery
Maintenance
Installation
and repair
Customer Customer
consulting training
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

45. Concept 5:
Returns: Sold merchandise returned by
customers for refund.
Ordering ease
Returns Delivery
Maintenance
Installation
and repair
Customer Customer
consulting training
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

46. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
6. Consider Product Hierarchy
7. Deal with the Product
Systems and Mixes
8. Use the Product Line Analysis
9. Master the Product-Mix
Pricing
10. Emphasize Packaging
windelldevera.blogspot.com
www.

47. Concept 6:
Consider Product Hierarchy
Item
Product
Type
Product line
Product class
Product family
Need family
Reference: Philip Kotler, Marketing Management, 13th edition
windelldevera.blogspot.com
www.

48. Concept 6:
Need family – the basic need underlying the
existence of a product family.
Item
Product
Type
Product
line
Product class
Product family
Need family
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

49. Concept 6:
Product family – all the product classes that
can satisfy a basic need effectively.
Item
Product
Type
Product
line
Product class
Product family
Need family
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

50. Concept 6:
Product class – a group of products within a
product family.
Item
Product
Type
Product
line
Product class
Product family
Need family
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

51. Concept 6:
Product line – a group of products within a
product class.
Item
Product
Type
Product
line
Product class
Product family
Need family
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

52. Concept 6:
Product type – a group of items within a
product line that function in a similar manner.
Item
Product
Type
Product
line
Product class
Product family
Need family
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

53. Concept 6:
Item – a unit within a product line which is
distinguished by size, price, or
some other characteristic of element.
Item
Product
Type
Product
line
Product class
Product family
Need family
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

54. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
6. Consider Product Hierarchy
7. Deal with the Product
Systems and Mixes
8. Use the Product Line Analysis
9. Master the Product-Mix
Pricing
10. Emphasize Packaging
windelldevera.blogspot.com
www.

55. Concept 7:
Deal with the Product Systems and
Mixes
Product Product
Product mix Depth Length Width Consistency
system assortment
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

56. Concept 7:
A product system is a group of diverse but
related items that function in a compatible
manner.
Product Product
Product mix Depth Length Width Consistency
system assortment
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

57. Concept 7:
A product mix is the sell of all products and
items a particular seller offers for sale.
Product Product
Product mix Depth Length Width Consistency
system assortment
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

58. Concept 7:
A company’s product assortment has a
certain width, length, depth, and consistency.
Product Product
Product mix Depth Length Width Consistency
system assortment
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

59. Concept 7:
The depth of a product mix refers to how
many variants are offered of each product in
the line.
Product Product
Product mix Depth Length Width Consistency
system assortment
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

60. Concept 7:
The length of a product mix refers to the
total number of items in the mix.
Product Product
Product mix Depth Length Width Consistency
system assortment
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

61. Concept 7:
The width of a product mix refers to how
many different product lines the company
carries.
Product Product
Product mix Depth Length Width Consistency
system assortment
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

62. Concept 7:
The consistency of the product mix refers to
how closely related the various product lines
are in end use, production requirements,
distribution channels, or some other way.
Product Product
Product mix Depth Length Width Consistency
system assortment
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

63. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
6. Consider Product Hierarchy
7. Deal with the Product
Systems and Mixes
8. Use the Product Line Analysis
9. Master the Product-Mix
Pricing
10. Emphasize Packaging
windelldevera.blogspot.com
www.

64. Concept 8:
Use the Product Line Analysis
Core product
Staples
Specialties
Convenience items
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

65. Concept 8:
Core product is the basic product.
Core product
Staples
Specialties
Convenience
items
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

66. Concept 8:
Staples are items with lower sales
volume but not promoted.
Core product
Staples
Specialties
Convenience
items
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

67. Concept 8:
Specialties are items with lower
sales volume but highly
promoted.
Core product
Staples
Specialties
Convenience
items
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

68. Concept 8:
Convenience items are peripheral
items.
Core product
Staples
Specialties
Convenience
items
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

69. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
6. Consider Product Hierarchy
7. Deal with the Product
Systems and Mixes
8. Use the Product Line Analysis
9. Master the Product-Mix
Pricing
10. Emphasize Packaging
windelldevera.blogspot.com
www.

70. Concept 9:
Master the Product-Mix Pricing
Product –
line pricing
Product- Optional-
bundling feature
pricing pricing
Captive-
By-product
product
pricing
pricing
Two-part
pricing
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

71. Concept 9:
Product–line pricing is setting price
steps between product line items.
Product –
line pricing
Product- Optional-
bundling feature
pricing pricing
Captive-
By-product
product
pricing
pricing
Two-part
pricing
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

72. Concept 9:
Optional-feature pricing is pricing
optional or accessory products sold
with the main product.
Product –
line pricing
Product- Optional-
bundling feature
pricing pricing
Captive-
By-product
product
pricing
pricing
Two-part
pricing
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

73. Concept 9:
Captive-product pricing is pricing
products that must be used with the
main product.
Product –
line pricing
Product- Optional-
bundling feature
pricing pricing
Captive-
By-product
product
pricing
pricing
Two-part
pricing
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

74. Concept 9:
Two-part pricing is a strategy in which
price is broken into a fixed fee plus a
variable usage rate.
Product –
line pricing
Product- Optional-
bundling feature
pricing pricing
Captive-
By-product
product
pricing
pricing
Two-part
pricing
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

75. Concept 9:
By-product pricing is pricing low-value
by-products to get rid of them.
Product –
line pricing
Product- Optional-
bundling feature
pricing pricing
Captive-
By-product
product
pricing
pricing
Two-part
pricing
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

76. Concept 9:
Product-bundle pricing is pricing
bundles of products sold together.
Product –
line pricing
Product- Optional-
bundling feature
pricing pricing
Captive-
By-product
product
pricing
pricing
Two-part
pricing
Reference: Philip Kotler, Marketing Management, 13th edition
www. windelldevera.blogspot.com

77. Outline: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
6. Consider Product Hierarchy
7. Deal with the Product
Systems and Mixes
8. Use the Product Line Analysis
9. Master the Product-Mix
Pricing
10. Emphasize Packaging
windelldevera.blogspot.com
www.

78. Concept 10:
Emphasize Packaging
Consumer Company/brand Innovation
Self-service
affluence image opportunity
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

79. Concept 10:
Self-Service – customers would know about
the product even without any person present.
Consumer Company/brand Innovation
Self-service
affluence image opportunity
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

80. Concept 10:
Consumer affluence – customers are willing
to pay for better packages.
Consumer Company/brand Innovation
Self-service
affluence image opportunity
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

81. Concept 10:
Company/brand image – contributes to
instant recognition.
Consumer Company/brand Innovation
Self-service
affluence image opportunity
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

82. Concept 10:
Innovation opportunity – innovative
packaging helps improve sales.
Consumer Company/brand Innovation
Self-service
affluence image opportunity
Reference: Philip Kotler, Marketing Management, 13th edition
www.windelldevera.blogspot.com

83. Summary: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
1. Know the Five Product Levels
2. Distinguish the Product
Classification Schemes
3. Compare the Consumer and
Industrial Goods Classification
4. Understand Product
Differentiation
5. Learn Service Differentiation
windelldevera.blogspot.com
www.

84. Summary: Top 10 Concepts of Product Strategy
To Market the Products Effectively:
6. Consider Product Hierarchy
7. Deal with the Product
Systems and Mixes
8. Use the Product Line Analysis
9. Master the Product-Mix
Pricing
10. Emphasize Packaging
windelldevera.blogspot.com
www.

85. TOP 10 LEARNING CONCEPTS
Ch. 12: Setting Product Strategy
Windell de Vera
May 11, 2012
windelldevera.blogspot.com
www.