Chapter 2 Pom

CHAPTER 2: THE
PRODUCT
PRINCIPLES OF MARKETING
ICCT COLLEGES | 2024

PRODUCT
The presence of human needs require the existence of products.
The product is that bundle of utility (satisfaction) which the buyer receives as
the result of a lease or purchase. It includes the physical good or service itself
(its form, taste, odor, color and texture), the functioning of the product in use,
the package, the label, the warranty, the manufacturer’s and retailer’s services,
aftersale service, the confidence or prestige received by the brand and the
manufacturer’s retailer’s reputation, and any other symbolic utility received
from possession or use of the goods or service.
NEW PRODUCTS
Competition is very strong and dynamic in marketing which makes it necessary for a
company to modify its existing products to meet over changing consumers needs.
New products can be innovative for a company but imitative for other firms using
“follow-the market-leader” strategy. It can be a replacement products for some, but
imitative to others. So the classification varies with timing of introduction and market
perception.
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PRODUCT PLANNING AND DEVELOPMENT
Product planning embraces activities

which enable producers and middlemen
to determine what should constitute a
company’s product line.
ICCT COLLEGES| 2024

ACTIVITIES INVOLVED:
1. 2.
What product to produce by the What product to sell by the

producers and manufacturers. wholesalers and retailers.
Product development is undertaken to achieve stability in sales and

profits and todeprive an existing product from possible maturity by
reviving interest of consumers on new features.
POSSIBILITIES OF PRODUCT DEVELOPMENT:
1 The company can develop new product features and

content.
2 The company can create different quality versions of the

product.
3 The company can develop additional models and sizes.

STEPS IN PRODUCT DEVELOPMENT PROCESS
Idea Generation
the ideas may come from external sources or internal sources.
Screening of ideas
not all the ideas generated can be feasible. Feasible ideas
Formal business or economic analysis

objectives of this step is further qualification of demand, risk, investment,
cost and profitability.
STEPS IN PRODUCT DEVELOPMENT PROCESS
Product development
actual – developed product is now produced.
Test Marketing
these are commercial experiments conducted in limited geographic areas
to ascertain product feasibility
Commercialization
full scale production and product introduction can be realized if test
marketing is successful.
STAGES OF PRODUCT LIFE CYCLE
1. Introduction stage – this is the stage when the product is launched in the
market.
2. Growth stage – also known as the “market acceptance” stage, this is when
sales and profits increase at an increasing rate.
3. Maturity stage 0 during this stage, sales and profits start to decline. More
competitors enter the market which more advanced product development.

THREE PHASES:
Growth Maturity
sales rate declines because of
distribution saturation, unwillingness

of middle men to re-sell manufacturers Decaying Maturity
product.
sales continue to decline; customers
shift to other brands or available
Stable Maturity substitute.
sales become level or at break-even
because of the market saturation;
unwillingness of market to buy loss of
interest on the product.
STAGES OF PRODUCT LIFE CYCLE
4. Decline and possible abandonment stages – new products of brands
eventually enters the industry. Obsolescence of the company’s products sets
in. As new concepts come in, they replace the old ones. Graphical presentation of the
product’s life cycle.

REASONS WHY NEW PRODUCTS FAIL
1. 4.
Inadequate market analysis.

Higher costs than anticipated.
2. 5.
Product deficiencies. Competitive strength and reaction.
3. 6.
Lack of effective marketing effort. Poor timing of introduction.
7.
Technical or production problems.
PRODUCT LINE AND PRODUCT MIX
A PRODUCT LINE POSSESSES THE FOLLOWING CHARACTERISTICS:
1. A group of products closely relate to each other.
2. They are intended for same users or they function in similar manner.
3. They may possess similar physical characteristics.
4. Sold to the same customer group
5. Marketed through the same types of outlets
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PRODUCT MIX INCLUDES:
1. The complete list of all products offered for the sale or produced
by a company
2. It is a composite of all products, brand or items within each

product line.
Examples: Dining table, china cabinet, belts, shoes, socks, washing
machines, TV set.

.
MAJOR PRODUCT LINE STRATEGIES
1. Expansion of product mix.
a. Increasing the number of product lines.
2. Contraction of product mix
a. Eliminating a complete line. Phasing out a “deadwood” product line.
b. Simplifying assortment within a line. Decreasing number of styles, sizes,
colors, or other product mix depth or breath.

.
3. Alteration of existing
Redesigning of an industrial product or new packaging design for consumer
products.
4. Positioning of the product
This is the consumers’ perception of a product, its image against
competitors’ product and other products being sold by the same company.
.
5. Trading up and trading down
Trading up is adding high-priced, well-known brand in order to increase
sales of existing low-priced items. Trading down is adding low-priced
products in order to increase sales of existing high-priced items.
6. Product differentiation and market segmentation

BRANDS
A brand is a word, mark, symbol, or a
combination of them used to identify the
A brand name is something which can be
vocalized or spoken. A brand mark is a non-
registered design, symbol or product logo. A
trade name is a registered company name. A
trademark is a brand registered under the
Philippine Patent Office and therefore given
legal protection.
CLASSIFICATION OF BRANDS:
1 According to ownership.
a. Manufacturer's brands.
b. Distributor's or middlemen's brands.
2 According to extent of geographic coverage.

a. National brands.
b. Private brands..
3 According to use by owner of brand.

a. Primary brands.
b. Secondary brands.
CLASSIFICATION OF BRANDS:
4. According to number of products covered.

a. Individual or separate name brands. .
b. Family or blanket brands. .
PACKAGING
The wrapping material around a consumer
item that serves to contain, identify,
describe, protect, display, promote and
otherwise make the product marketable and
keep it clean. Packaging is more than just
your product's pretty face.

PACKAGING STRATEGIES:
1. Family packaging involves making the pack-age identical for all products using
common feature on all packages.
2. For example: Johnson's baby cologne varieties and baby oil have the same
package design. Reuse packaging is designing and promoting package which can
serve other purposes when contents are consumed.
3. Multiple packaging is placing several units of a product in a single container.

THE FOLLOWING FACTORS ACCOUNT FOR CONSIDERING
PACKAGING AS AN INDEPENDENT SELLING TOOL:
1. Self Service
2. Consumers affluence.
3. Innovational opportunity.

LABELS
Labeling is the display of label in a product. A

label contains information about a product on
its container, packaging, or the product itself. It
helps the product stand out in the market, and
identifies it as a part of a particular brand.

TYPES OF LABELS:
1. Brand label
It plays an important role in labeling as it gives information about the brand.
It can be removable or non-removable.
2. Grade label
It describes the aspect and features of the product.
3. Descriptive label
It specifies product usage.
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NEW PRODUCT DEVELOPMENT STRATEGY
With the presence of rapid changes in technology, competition and tastes, a
marketing company cannot rely on its current products. The market expects
new and improved products. Competitors will try their best to provide them.
Around this environment, any marketing organization needs a new product
development program.
A company can obtain new products in two ways. One is through acquisition by
s through new-product development by setting its own research and
development department.

IDEA-GENERATION TECHNIQUES
1. Attribute Testing
This is also known as product modification analysis. This calls
or writing down the major attributes of an existing product and
then modifying each attribute in search for an improved
product.

2. Need/problem identification.
The customers are interviewed and are asked to
name problems or deficiencies they found in an existing
product.

3. Brainstorming.
This session is conducted when a firm needs to generate
maideas related to a pro-posed product development.
Criticism is ruled out during this meeting. Combination and
improvement, of ideas is encouraged.

COMMERCIALIZATION
This is the launching of a new product. During this stage, the
company is facing largest costs to date. It may build-up or rent a
full-scale manufacturer facility and will have to spend more for
advertising and sales promotion I purposes.

PRODUCT MANAGEMENT ORGANIZATION
Firms manufacturing several products or brands often establish product or
brand management organization. This does not replace functional
management organization, but serve as another layer of management. This
organization is headed by a product or brand manager responsible for
specific products or brands. He sees to it that products under his
administration are unique and cognizable from the rest.

ADVANTAGES OF PRODUCT MANAGEMENT
ORGANIZATION
1. The product manager harmonizes the marketing mil for the product.
2. The product manager can react quickly to problems in the marketplace than a
committee or specialist.
3. Smaller brands are less neglected because they have a product advocate.
4. Product management is an excellent training ground for young executives, for it

involves them in almost every area of company operations.

PRODUCT ADOPTION PROCESS
50
The process or steps through which 40
an individual or ordinary customer

30
goes through acceptance or
rejection of a new product idea. 20
The cycle through which an

innovation is perceived. 10
0
Item 1 Item 2 Item 3 Item 4 Item 5

STAGES OF ADOPTION PROCESS:
1 Awareness.
2 Interest.
3 Evaluation.
4 Trial.
5 Adoption.
PRODUCT POSITIONING
This is the system of designing the company's image and value offer so that
the market segment can under-stand and appreciate what the company
stands for in relation to its competitors. Product positioning is also the
image that the product projects in relation to competitive products or to
other products marketed by the company in question.
Several positions may be considered by the company. It might go after the

"low-price position", "high-quality position", "high-service position", or
"advance-technology position". In this case the company is establishing a
competitive advantage.
TYPES OF INDUSTRY FOR PRODUCT POSITIONING
1. Volume industry.
These are companies which strive for low-cost position or the highly
differentiated position. They gain high profit at mass production.
Prices are low for big orders.
2. Stalemated industry.
These has few potential advantages like a steel industry where
it is hard to differentiate the product or its manufacturing cost.

TYPES OF INDUSTRY FOR PRODUCT POSITIONING
3. Fragmented industry.
These are made-to-order industries where many opportunities
are available for differentiation.
4. Specialized industry.
Companies specializing in production for selected market
segments.

PRODUCT AND SERVICE POLICY DECISIONS
Product Policy Below are the types of

service policies:
Serve as guide for making

product decisions. a. Consumer education;
b. Providing for product installation,

inspection and repair
Service Policy
A manufacturer may decide to market c. Providing free service under the
its products with accompanying terms of a written guarantee or contract.
services. Degree of service offering
may depend on its policy.
THANK YOU
Presented By :
Corpuz, Jethro
Manjares, Mica
Panganiban, Jill Ann
Enola, Jamaica
Gadnanan, Ronny
Cherreguine, Cyra June

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CHAPTER 2: THE

ICCT COLLEGES | 2024

Larana University | 2024

Product planning embraces activities

ICCT COLLEGES| 2024

What product to produce by the What product to sell by the

Product development is undertaken to achieve stability in sales and

1 The company can develop new product features and

2 The company can create different quality versions of the

3 The company can develop additional models and sizes.

Formal business or economic analysis

Larana University | 2024

distribution saturation, unwillingness

ICCT COLLEGES | 2024

Inadequate market analysis.

1. A group of products closely relate to each other.

3. They may possess similar physical characteristics.

4. Sold to the same customer group

5. Marketed through the same types of outlets

ICCT COLLEGES| 2024

2. It is a composite of all products, brand or items within each

Larana University | 2024

a. Increasing the number of product lines.

2. Contraction of product mix

a. Eliminating a complete line. Phasing out a “deadwood” product line.

b. Simplifying assortment within a line. Decreasing number of styles, sizes,

colors, or other product mix depth or breath.

Redesigning of an industrial product or new packaging design for consumer

4. Positioning of the product

This is the consumers’ perception of a product, its image against

Trading up is adding high-priced, well-known brand in order to increase

sales of existing low-priced items. Trading down is adding low-priced

products in order to increase sales of existing high-priced items.

6. Product differentiation and market segmentation

Larana University | 2024

b. Distributor's or middlemen's brands.

2 According to extent of geographic coverage.

3 According to use by owner of brand.

4. According to number of products covered.

Larana University | 2024

common feature on all packages.

serve other purposes when contents are consumed.

3. Multiple packaging is placing several units of a product in a single container.

Larana University | 2024

ICCT COLLEGES | 2024

Labeling is the display of label in a product. A

Larana University | 2024

ICCT COLLEGES| 2024

ICCT COLLEGES | 2024

Larana University | 2024

Larana University | 2024

Larana University | 2024

Larana University | 2024

Larana University | 2024

4. Product management is an excellent training ground for young executives, for it

Larana University | 2024

The process or steps through which 40

an individual or ordinary customer

The cycle through which an

Larana University | 2024