What is a Product?

Multidimensional, sum of all its features,

bundle of utility

Product Component Model

SUPPORT SERVICES
COMPONENT
PACKAGING
COMPONENT

12-6

Repair and
maintenance Trademark

Product
platform

Installation

CORE
COMPONENT

Brand
name
Instructions

Other
related
services

Irwin/McGraw-Hill

Legal

Functional
features

Legal

Price

Design features

Deliveries

Quality Warranty

Package

Spare parts

Styling

Legal

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product Marketing Decisions

Numerous
Affected by Environmental Factors
Affected by internal Strengths and
Weaknesses

Types of Product Decisions

(1) Product Positioning
Positioning refers to the act of locating a
brand in customers minds relative to
competitive products in terms of product
attributes and benefits

Positioning Map: Automobiles For Generation Yers

More Edgy

Kia Sorrento
Scion

Cube

Inexpensive

Expensive
$13k

$20K

Civic

Less Edgy

Types of Product Decisions:

(2) Product Mix Decisions
Def.: Set of all products and items that a
particular seller offers to buyers.
Decisions include selection of width,
length, depth, and consistency

Product Mix / Assortment E.g. P&G

Detergents
Ivory Soap
Dreft
Tide
Cheer
Oxydol
Dash
Gain
Bold
Era

Toothpaste
Crest
Gleam

(3) Product Line Decisions

A product line is a group of products that
are closely related because they perform a
similar function, are sold to the same
customer groups, are marketed through
the same channels
Decisions include Product Line length,
modernization, featuring, pruning

(4) Brand Name

A companys unique designation or

trademark, which distinguishes its
offering from other product category
entries

(5)The Logo
Graphic design element that is related to
the brand name
Companies use logos with or without
brand names
Not all brand names possess a distinct
logo but many do
e.g., the Nike swoosh, Ralph Laurens
Polo

(6) Packaging Decisions

Color

Design and Shape

Physical
Materials
Product Information
on Package

What is a Service?
Any act that one party can offer to another that
is essentially intangible and does not result in the
ownership of anything. May or may not be tied to
a physical product

Major Categories U.S. Exports

of Services
13-2

Category
Services Total
Travel (hotels, etc)

Percentage
28.5
8.7

Transportation (fares, freight, and port services)

7.5

Commercial, professional, and technical services (advertising,

accounting, legal, construction, engineering)

1.7

Financial services (banking and insurance)

1.5

Education and training services (most foreign student tuition)

1.0

Entertainment (movies, books, records)

0.8

Other categories (telecommunications, information, health care)

7.3

Irwin/McGraw-Hill

Source: U.S. Department of Commerce, http://www.doc.gov. 2001

Service Marketing Decisions

Product Mix
Product Line
Brand Name
Logo
Store Layout

Types of Service Marketing Decisions

Product Positioning

Montevideo, Uruguay

What is an Industrial Product?

Goods intended for industrial use, i.e. creating
other goods & services
Materials & parts (enter manufacturers product
completely, e.g. oil, lumber, tires, small motors)
Capital Items (long lasting, facilitate developing
finished product, e.g. buildings, generators, lift trucks)
Supplies & business services (short lasting, e.g. pens,
brooms, maintenance & repair services)

Major Categories U.S. Exports

Industrial

13-3

Category
Merchandise Total
Food, feeds, and beverages (wheat, fruit, meat)
Industrial supplies (crude oil, plastics, chemicals, metals)

Percentage
71.5
4.8
15.1

Capital goods (construction equipment, aircraft, computers

telecommunication)

32.1

Automotive vehicles, engines, and part

7.7

Consumer goods (pharmaceuticals, tobacco, toys, clothing)

8.2

Other categories

3.6

Irwin/McGraw-Hill

Source: U.S. Department of Commerce, http://www.doc.gov. 2001

To Standardize or Adapt
Product/Service?
That is the Question.

Products & Services for Consumers

Two Approaches for International Product
Development
Adaptation The strategy of altering products
to meet the needs of local markets
Global Standardization The standardization
of products across markets & ultimately the
standardization of the marketing mix
worldwide

Global Standardization vs. Local

Adaptation Continuum
Continuum not One or the
other
Global Standardization Ideal, theoretical
Regional Standardization
uniform marketing within a
particular region, EU
Globalize components, e.g.
Brand Name, Logo, Image,
Positioning, physical
product,

Globalization
A little boy from Japan flies to the United States with his parents, and
on the way in from the airport they pass the "miracle mile" most places
have now. The little boy turns to his parents and says, "Hurray! They
have McDonald's here in America too!"

Globalization

Braun (Gillette) sells kitchen appliances using same marketing mix

across continents with minor mandatory adaptations (voltage,
cycles)

Pro Globalization Arguments

Global Consumers Needs of consumers
are becoming more homogenous world
wide
Global Brand Awareness facilitated by
travel, communication, internet
Results in lower price due to standardized
product research, economies of scale,
promotion

Adaptation - Love Hotels in Japan

You'll find "Love Hotels" all over Japan, places designed
for folks to get together. The rooms offer a fantasy of
luxury and escape from crowded tiny apartments where
families or neighbors might spy on licit or illicit physical
pleasures. You can tell the love hotels by their bright-lit
neon signs with funny names, often English inflected:
Hotel Elmer, Hotel Carrot, Hotel Charm, Hotel Princess,
Hotel Chrystal. And the signs out front will list two or
three prices: short stays, long stays, overnight stays.
In the lobby, you won't see any people. Only a large
room menu on the wall. If a photo of a room is lit up, the
room is available. You like that room, press a button next
to the photo. A faceless person behind dark glass hands
you a key after you hand them your cash.

Love Hotel

Love Hotel
Price Information
Stay 4500 ($40)-- OPEN
Rest 3600 ($30)-- CLOSE

AM 10:00-PM 5:00
PM 3:00-PM 6:00 2600
AM 10:00-PM 4:00 ($20)

Which Components of the Product

May Require Adaptation?

12-7

Core Component
Physical Product
Design
*Positioning Psychological
Packaging Component
Style
Packaging
Labeling
Trademarks
Support Services Component
Repair
Maintenance
Instructions
Irwin/McGraw-Hill

Features

Brand Name
Quality
Price

Warranties
Deliveries
Spare Parts

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Would They Sell in the United States?

12-9

Alu-Fanny: French Foil wrap

Atum Bom: Portuguese tuna

Crapsy Fruit: French cereal

Kack: Danish sweets

Kum Onit: German pencil sharpeners

Mukk: Italian yogurt

Plopp: Scandinavian chocolate

Pocari Sweat: Japanese sport drink

Pschitt: French lemonade

Poo: Argentine curry powder

Irwin/McGraw-Hill

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Adapt or Standardize?
Detergent Powder
(Hand laundry detergent)
Strong cleaner,
well-known in international markets
packaged in 150, 480 gram and 20 kilogram sizes

Shampoo
Makes hair shiny, for normal hair,
packaged in 400 gram size

How could this product be

adapted to U.S.?
Product?
Package?
Support Services?

Services
Adaptation important because it involves
people to people contact

Industrial Products
Industrial Products
Require Less
Adaptation
Industrial goods share
similar buying motives
worldwide

Industrial Products
main U.S. export