CHAPTER 11
Product Concepts, Branding, and Packaging
TEACHING RESOURCES QUICK REFERENCE GUIDE
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Purpose and Perspective
IRM, p. 207
Lecture Outline
IRM, p. 208
Discussion Starters
IRM, p. 221
Class Exercises
IRM, p. 223
Semester Project
IRM, p. 226
Answers to Developing Your Marketing Plan
IRM, p. 227
Answers to Discussion and Review Questions
IRM, p. 228
Comments on the Cases
IRM, p. 232
Video Case 11.1
IRM, p. 232
Case 11.2
IRM, p. 233
Examination Questions: Essay
Cognero
Examination Questions: Multiple-Choice
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Examination Questions: True-False
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PowerPoint Slides
Instructor’s website
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PURPOSE AND PERSPECTIVE
In this chapter, we first define a product and discuss how products are classified. Next, we examine the
concepts of product line and product mix. We then explore the stages of the product life cycle and the
effect of each life-cycle stage on marketing strategies. Next, we outline the product adoption process.
Then, we discuss branding, its value to customers and marketers, brand loyalty, and brand equity. We
examine the various types of brands and consider how companies choose and protect brands, the various
branding strategies employed, brand extensions, co-branding, and brand licensing. We also look at the
role of packaging, the functions of packaging, issues to consider in packaging design, and how the
package can be a major element in marketing strategy. We conclude with a discussion of labeling and
some related legal issues.
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LECTURE OUTLINE
I. What is a Product?
A. A product is a good, a service, or an idea received in an exchange.
1. It can be either tangible or intangible and includes functional, social, and psychological
utilities or benefits.
B. A product can be an idea, a service, a good, or any combination of the three.
1. A good is a tangible physical entity.
2. A service is an intangible result of the application of human and mechanical efforts to people
or objects.
3. An idea is a concept, philosophy, image, or issue.
C. It is helpful to think of a total product offering as having a combination of three interdependent
3. Customers also receive benefits based on their experiences with the product.
a. Many products have symbolic meaning for buyers; some stores capitalize on this value
by striving to create a special experience for customers.
D. Customers also receive benefits from their experiences with the product. When customers
purchase a product, they are buying the benefits and satisfactions they think the product will
provide.
II. Classifying Products
A. Products fall into two general categories:
1. Consumer products are purchased to satisfy personal and family needs; they are categorized
according to how buyers generally behave when purchasing a specific item.
2. Business products are purchased to use in a firm’s operations, to resell, or to use in the
manufacture of other products; they are classified according to their characteristics and
intended uses in an organization.
B. Consumer Products
1. Convenience Products
a. Convenience products are relatively inexpensive, frequently purchased items for which
buyers exert only minimal purchasing effort.
b. The buyer spends little time planning the purchase of a convenience item or comparing
available brands or sellers.
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c. A convenience product normally is marketed through many retail outlets.
d. Because sellers experience high inventory turnover, per-unit gross margins can be
relatively low.
e. Producers of convenience products can expect little promotional effort at the retail level.
f. Packaging is important and may have to sell the product because many convenience
items are available only on a self-service basis at the retail level.
2. Shopping Products
a. Shopping products are items for which buyers are willing to expend considerable effort
in planning and making the purchase.
b. Buyers allocate considerable time comparing stores and brands on prices, product
features, qualities, services, and perhaps warranties.
c. Because shopping products are purchased less frequently, inventory turnover is lower and
marketing channel members expect to receive higher gross margins to compensate for the
lower turnover.
d. A marketer must consider several key issues to market a shopping product effectively,
including how to allocate resources, whether personal selling is needed, and cooperation
within the supply chain.
e. Usually, the producer and the marketing-channel members expect some cooperation from
each other in providing parts and repair services and performing promotional activities.
3. Specialty Products
a. Specialty products have one or more unique characteristics, and buyers are willing to
4. Unsought Products
a. Unsought products are products purchased to solve a sudden problem, products of
which customers are unaware, and products people do not necessarily think about buying.
b. Examples include emergency medical services and automobile repairs.
C. Business Products
1. Business products are usually purchased on the basis of an organization’s goals and
objectives; the functional aspects of the product are more important than the psychological
rewards sometimes associated with consumer products.
2. Installations
a. Installations include facilities, such as office buildings, factories, and warehouses, and
major nonportable equipment such as production lines and very large machines.
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c. Marketers of installations frequently must provide a variety of services, including
training, repairs, maintenance assistance, and may even help finance the purchase.
3. Accessory Equipment
a. Accessory equipment does not become a part of the final physical product but is used in
4. Raw Materials
a. Raw materials are basic natural materials that become part of a physical product.
b. Raw materials are usually purchased in large quantities, according to grades and
specifications.
5. Component Parts
a. Component parts become a part of the physical product and are either finished items
6. Process Materials
a. Process materials are used directly in the production of other products.
b. Unlike component parts, process materials are not readily identifiable and are purchased
according to industry standards or the purchaser’s specifications.
7. MRO Supplies
8. Business Services
a. Business services are the intangible products many organizations use in their operations
and include financial, legal, marketing research, information technology, and janitorial
1. Specific product items in a product line usually reflect the desires of different target markets
or varying needs of consumers.
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2. Marketers must understand buyers’ goals if they hope to come up with the optimal product
1. The width of product mix is the number of product lines a company offers.
2. The depth of product mix is the average number of different products offered in each
product line.
IV. Product Life Cycles and Marketing Strategies
A. Product life cycle is the progression of a product through four stages: introduction, growth,
maturity, and decline (see Figure 11.2).
B. Introduction
1. The introduction stage of the product life cycle begins at a product’s first appearance in the
marketplace, when sales start at zero and profits are negative.
2. Most new product sales begin slowly and seldom generate enough sales to bring immediate
profits.
a. As buyers learn about the new product, marketers should be alert for product weaknesses
and quickly make corrections to prevent the product’s early demise.
b. Marketing strategy should be designed to attract the segment that is most interested in,
most able, and most willing to buy the product.
C. Growth
1. During the growth stage, sales rise rapidly and profits reach a peak and start to decline.
2. This stage is critical to a product’s survival because competitive reactions to the product’s
success during this period will affect the product’s life expectancy.
3. Profits begin to decline late in the growth stage as more competitors enter the market, driving
prices down and creating the need for heavy promotional expenses.
4. As sales increase, management must support the momentum by adjusting the marketing
strategy.
1. During the maturity stage, the sales curve peaks and starts to decline and profits continue to
fall.
2. This stage is characterized by intense competition as many brands are now in the market.
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a. Competitors emphasize improvements and differences in their versions of the product.
b. Weaker competitors are squeezed out or consumers lose interest.
c. The producers who remain in the market are likely to change their promotional and
distribution efforts.
3. Because many products are in the maturity stage of their life cycles, marketers must know
how to deal with these products and be prepared to adjust their marketing strategies.
4. To increase the sales of mature products, marketers may suggest new uses for them.
5. As customers become more experienced and knowledgeable about products during the
maturity stage, the benefits they seek may change as well, necessitating product
modifications.
6. During the maturity stage, marketers must actively encourage resellers, sometimes though
promotions, to support their product.
7. Maintaining market share during maturity can require large promotional expenditures that
focus on differentiating the product from competitors’.
E. Decline
1. During the decline stage, sales fall rapidly.
a. The marketer must consider eliminating items from the product line that no longer earn a
2. In this stage, marketers must determine whether to eliminate the product or try to reposition it
to extend its life.
a. Spending on promotion efforts is usually considerably reduced.
b. During a product’s decline, outlets with strong sales volumes are maintained and
unprofitable outlets are weeded out.
3. An entire marketing channel may be eliminated if it does not contribute adequately to profits.
a. A channel not used previously, such as a factory outlet or Internet retailer, can help
1. The five stages of the adoption process are awareness, interest, evaluation, trial, and adoption
(see Figure 11.3).
a. First stage: Awareness is when a buyer becomes aware of the product’s existence.
b. Second stage: Interest is when the buyer seeks information and is receptive to learning
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e. Fifth stage: Adoption is when the buyer purchases the product and can be expected to use
it again whenever the need for this general type of product arises.
2. Entering the adoption process does not mean the person will eventually adopt the product—
1. Innovators are the first adopters of new products. They enjoy trying new things and do not
mind taking a risk.
2. Early adopters are people who adopt new products early, choose new products carefully,
and are viewed as “the people to check with” by later adopters.
3. Early majority are those people adopting new products just before the average person. They
are deliberate and cautious in trying new products.
4. Late majority includes skeptics who adopt new products because of economic necessity or
social pressure.
5. Laggards are the last to adopt a product. They are suspicious of new products, and when they
finally adopt them, it may have already been replaced by an even newer product.