Lectures Marketing management: Chapter 12 - ThS. Nguyễn Tiến Dũng

CHAPTER 12
PRODUCT STRATEGY

Nguyen Tien Dung, MBA
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Chapter Questions
1. What are the characteristics of products,
2.
3.
4.
5.

6.

and how do marketers classify products?
How can companies differentiate
products?
Why is product design important and what
factors affect a good design?
How can a company build and manage its
product mix and product lines?
How can companies combine products to
create strong co-brands or ingredient
brands?
How can companies use packaging,
labeling, warranties, and guarantees as
marketing tools?

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Main Contents
1. Product Characteristics and Classifications
2. Product and Service Differentiation
3. Product and Brand Relationship
4. Packaging, Labeling, Warranties and

Guarantees

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1. 1. Product Characteristics and Classifications
What is a product?
● anything that can be
offered to a market to
satisfy a want or need,
including physical goods,
services, experiences,
events, persons, places,
properties, organizations,
information, and ideas.

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Components of the
Market Offering
● Value based prices

● Product features and quality
● Services mix and quality

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Five Product Levels
● Based on customer

expectation and
reality of usage
● Group discussion:
● A physical product: a

mobile phone (Table 1
and 2)
● A service: business
education (SIE
education services) –
Table 3, 4 and 5

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A mobile phone:
● Core benefit: communication
● Basic product: screen, keyboard, adapters /

battery, speakers...
● Expected product: entertainment, checking

mail
● Augmented product: after-sales services
● Potential product: 3D image, health-checking

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A business education
● Core benefit: degree, knowledge
● Basic: lectures, lecturers, facilities (auditoria)
● Expected: modern equipment, foreign

language usage, scholarship
● Augmented: foreign (original) textbook, elearning courses / /
● Potential: training courses with foreign
students, career support after graduation,
satellite – robot services ? // school-wide free
wifi connection
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Product Classification Schemes
● Durability
● Tangibility
● Use

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Durability and Tangibility

● Nondurable goods
● Durable goods
● Services

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Consumer Goods Classification
● Convenience
● Shopping
● Specialty
● Unsought

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Industrial Goods Classification
● Materials and parts
● Capital items
● Supplies/business services

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2. Product and Service Differentiation
● Product Differentiation
● Product form
● Features
● Customization
● Performance

● Conformance
● Durability
● Reliability
● Repairability
● Style & Design


Example: Mercedes-Benz

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Design
● Design is the totality of features that affect how a

product looks, feels, and functions to a consumer.
● Design offers functional and aesthetic benefits and
appeals to both our rational and emotional sides.

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Service Differentiation
● Ordering ease
● Delivery
● Installation
● Customer training

● Customer consulting
● Maintenance and repair
● Returns


Service Differentiation
CEMEX is one of the world's largest
building materials suppliers and
cement producers. Founded in Mexico
in 1906. CEMEX has operations
extending throughout the world, with
production facilities spanning 50
countries in North America, the
Caribbean, South America, Europe,
Asia, and Africa.
Cemex guarantees cement delivery as
fast as placing a pizza order.

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Maintenance and Repair Services: Best Buy

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3. Product and Brand Relationship

© Nguyễn Tiến Dũng

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The Product Hierarchy

Item
Product type
Product line
Product class
Product family
Need family
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Product Systems and Mixes
● Product system
● Product mix
● Product assortment
● Depth
● Length
● Width
● Consistency

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● Michelin has three and somewhat related product lines

© Nguyễn Tiến Dũng

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Product Line Analysis
● Core product
● Staples
● Specialties
● Convenience

items

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