Executive Summary

Planning the product portion of a market offering calls for coordinated decisions on the product mix, product lines, brands, and packaging and labeling. The marketer needs to think through the five levels of the product: core benefit (the fundamental benefit or service the customer is really buying), basic product, expected product (a set of attributes that buyers expect), augmented product (additional services and benefits that distinguish the company's offer from the competition), and potential product (all of the augmentations and transformations the product might ultimately undergo).

Products can be classified in several ways. In terms of durability and reliability, products can be nondurable goods, durable goods, or services. In the consumer-goods category are convenience goods, shopping goods, specialty goods, and unsought goods. In the industrial-goods category are materials and parts, capital items, and supplies and business services.

A product mix is the set of all products and items offered for sale by the marketer. This mix can be classified according to width, length, depth, and consistency, providing four dimensions for developing the company's marketing strategy. To support product decisions, product-line managers first analyze each product's sales, profits, and market profile. Managers can then change their product-line strategy by line stretching or line filling, by featuring certain products, and by pruning to eliminate some products.

Branding is a major product-strategy issue. High brand equity translates into high brand-name recognition, high perceived brand quality, strong mental associations, and other important assets. In creating brand strategy, firms must decide whether or not to brand; whether to produce manufacturer brands, or distributor or private brands; which brand name to use, and whether to use line extensions, brand extensions, multibrands, new brands, or co-brands. The best brand names suggest something about the product's benefits; suggest product qualities; are easy to pronounce, recognize, and remember; are distinctive; and do not carry negative meanings or connotations in other countries or languages.

Many physical products have to be packaged and labeled. Well-designed packages create convenience value for customers and promotional value for producers. Marketers start by developing a packaging concept and then testing it functionally and psychologically to make sure it achieves its desired objectives and is compatible with public policy and environmental concerns. Physical products also require labeling for identification and possible grading, description, and product promotion.

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