MODULE 1 PRODUCT POLICY 2

MODULE I PRODUCT POLICY Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 1

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CONGRATULATIONS AND WELCOME TO MM N5!!! “Do not judge me by my successes, judge me by how many times I fell down and got back up again” Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 3

CONTENTS: Module 1 Product Policy M1 Module 2 Place/Distribution M2 Policy Module 3 Pricing Policy M3 Module 4 Promotional Policy M4 Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 4

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PRODUCT POLICY – MODULE 1  INTRODUCTION (SO)  When finishing this module you will be able to understand the role products fulfil in the company’s marketing plan.  Distinguish between different consumer and industrial products.  Understand the importance of continual development of new products.  Explain and interpret the product life cycle (PLC).  Utilise the different possible product strategies  Identify different brands and describe the role of packaging in marketing Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 8

THE NATURE OF PRODUCT POLICY 1) The product serves as the “heart” of the organisation. It is important to note that all marketing activities start with the product. 2) No marketing manager can determine the a price without a product, nor can he/she develop distribution channels without a product The product and product concept i. Definition : A product consists of a collection of tangible(visible) problem solving, need –satisfying attributes which are made available to the market(users) in order to get the to pay attention to it, buy it and use it Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 9

Three Levels of a Product  Consumers often think that a product is simply the physical item that he or she buys. In order to actively explore the nature of a product further, let’s consider it as three different products - the CORE product, the ACTUAL/FORMAL product, and finally the UGMENTED/TOTAL product.  The CORE product is NOT the tangible physical product. You can't touch it. That's because the core product is the BENEFIT of the product that makes it valuable to you. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 10

Three Levels of a Product  The ACTUAL product is the tangible, physical product. You can get some use out of it. The actual product is what the average person would think of under the generic banner of product.  The AUGMENTED product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium. So when you buy a car, part of the augmented product would be the warranty, the customer service support offered by the car's manufacturer and any after-sales service. The augmented product is an important way to tailor the core or actual product to the needs of an individual customer. The features of augmented products can be converted in to benefits for individuals. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 11

The summary: Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 12

THE PRODUCT MIX  Companies seldom only sell one product. In most cases, organisations offer a wide variety of products to the customers.  A product mix (product range) is the set of all products lines and individuals product items that a firm sells.  A product item: is a single object, it is a particular product within the product mix that has its own name. (Coke, Powerade)  A product line: is a group of products that share similar product characteristics  Usually these products satisfy similar customer needs.  They are usually distributed in the same way  They are sometimes packed and wrapped in the same way.  They usually fall in thefrom Downloaded same price class hlayiso.com 9/19/2020 MM N5 MODULE 1 13

CLASSIFICATION OF PRODUCTS AND SERVICES Consumer goods Industrial products Services I. Convenience products I. Raw materials All types of II. Shopping products commercial III. Speciality products II. Installations services (3x5) 15 III. Accessory equipments IV. Operating suppliers V. Partly fabricated VI. Materials and parts VII. Industrial services (6x1) 6 Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 14

EXPLAINATION Consumer goods/products  Can be classified according to durability OR according to buying habits.  Classification of consumer products according to durability  Durable products – are products that last for longer period of time  None-durable – are products with a relatively short lifespan. They are mainly procured to be used only or a few times. These products must also be widely available.  Classification of consumer products according to buying habits  Consumer products can be classified as convenience products, shopping products and specialty products. Two points are distinguished:  The consumer’s knowledge concerning the product before he/she starts shopping and  the satisfaction the shopper gets from the search for and the comparing of products, measured against the time and effort that it requires Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 15

Convenience products (5x2) 10 I. Consumer have comprehensive knowledge of the products II. Normally brands preferences are not strong for these products. III. Convenience products are relatively cheap and buying them require little time and exercise. IV. Convenience products are divided into THREE categories: 1. Impulse products: products bought without planning (newspapers, magazines and sweets). 2. Emergency products: products bought when the need arises (candles, umbrellas and medicine) 3. Staple products: products bought frequently (milk, bread, maize, sugar)  Marketing considerations  Convenience products have to be within easy reach of the consumers.  The quality and prices of competing products are similar.  Convenience products are usually sold on a self-service basis. Thus it is Downloaded the responsibility from hlayiso.com of the manufacturer to create trademark preferences and recognition. 9/19/2020 MM N5 MODULE 1 16

Shopping products (5x2) 10 1) Consumers prefer to compare the suitability, prices styles ect. 2) Consumer does not have extensive knowledge concerning the product. 3) Consumers shops around before making a final decision. 4) Trademarks play a minor role. 5) Shopping products are not brought often and are usually expensive than convenience products.  Shopping products are divided into TWO groups:  Heterogeneous shopping products: These goods grand status to the buyer, are not standardised and price play a minor role (clothing and jewellery).  Homogeneous shopping products: Products with more or less similar attributes. A price does play a major role when products are compared with one another. Downloaded from (stoves, washing machines and hlayiso.com refrigerators) 9/19/2020 MM N5 MODULE 1 17

Specialty products I. Are consumer goods with unique characteristics II. Consumers insist on a particular brand name and are willing to make a special purchasing efforts III. Consumers have considerable product knowledge before searching for the product. IV. The outstanding characteristic of specialty products is the strong brand loyalty that potential buyers have, and the fact that they will only buy that particular product. (expensive photographic equipment, some cars, watches and designer clothing, wedding rings) Marketing consideration  Usually the manufacturer has only one outlet in a specific area or target market and he deals directly with the chosen retailer.  Brands and trademarks plays a major role and, because of the small number of outlets, it is necessary for the manufacturer and retailers to market aggressively. Downloaded from hlayiso.com  Personal selling is important in the marketing of these products 9/19/2020 MM N5 MODULE 1 18

INDUSTRIAL PRODUCTS  Industrial products are used in the production processes of other products and services. These goods can be classified as follows: Installations are expensive and determining the scale of operation (capacity) of the plant Accessory these industrial products are used to assist in the equipment production process. Their lifespan is shorter than capital equipment, but longer than that of operating suppliers (computers, power tools, copy machines and small fork lifts) Operating are finished and relatively cheap products that are used suppliers directly or indirectly in the production process, dependent upon the process the end product. They do not become part of the final product. Suppliers are divided into THREE groups: Maintenance, Repair and Operating suppliers (MRO suppliers) Maintenance suppliers: paints, light bulbs, floor polish Repair suppliers: filters, bearings needed to fix broken equipment Downloaded from hlayiso.com Operating suppliers: fax paper, paper clips, pens, printing ink cartridges 9/19/2020 MM N5 MODULE 1 19

INDUSTRIAL PRODUCTS Cont… Raw materials have not undergone any processing and will later be used in the production of other products. TWO categories exist: Natural products – wood, coal, iron ore and crude oil. These products are processed to manufacture party fabricated material and parts. Agricultural products – tobacco, maize, wool, milk and meat. These are also manufactured into partly fabricated products and later into end products Partly Partly fabricated materials - are products that have been fabricated processed to some degree and that must undergo further material and processing to be useful products(flour, cement, sugar ect) parts: (These Parts: are products that are used in other products products without any alterations to their form (sim cards, batteries, become part buttons. tires ect) of the final products) Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 20

INDUSTRIAL PRODUCTS Cont… Industrial/business service department and organizations are services used by business to assist in their main activities. (management consultants, cleaning services, advertising agencies , tax consultants) PRODUCT DEVELOPMENT  Products move through a life cycle. This causes a constant demand for new products. Rapid changes in the marketing environment lead to shorter product life cycle – especially consumer products.  The following aspects are the main causes of shorter life cycles: a. Rapid product ageing because of fast technological development b. Rapidly changing markets, mass distribution and mass communication. c. Intensive competition that replace the product item before the end of its technical life span. d. A higher standard of living, where the existing product item cannot give total need satisfaction. e. The solution to the foregoing phenomenon lies in a constant flow of new products items and replacing the old ones as they come to the end of their PLC. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 21

Importance of product development  constant development and marketing of new products has become indispensable to the growth and progress of any business.  Reasons for the constant development of new products are: NB (5x2) 10 1) Business planning starts with the product 2) New products are needed for retention of profit margins 3) New products are essential for business growth 4) Certain environmental variables lead to new products 5) The battle for retail shelf space 6) The high costs and risks of product failures Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 22

Product development:  is a systematic process of proving new products at the lowest possible sacrifices and risks, and with the largest possible advantage to the organisation, but also with the greatest possible need satisfaction for the target market. (Definition).  The new-product matrix – shows the underlying connections and interaction between the two dimensions of a product item, namely the technological and markets dimensions. New products can develop from market dimensions, technological dimensions or a combination of the two dimensions. Management’s motto should all Downloaded from hlayiso.com times be “Innovate or die!” 9/19/2020 MM N5 MODULE 1 23

Steps in the product development NB: EIGHT steps in the product development processes are as follows: (8x1) 8 1. Organising for new product development (Step 1) 2. Idea generation (Step 2) (5x2) 10 3. Idea screening (Step 3) 4. Product Concept development (Step 4) 5. Profitability analysis (Step 5 ) 6. Physical product development (Step 6) (7x2) 14 7. Test marketing of the new product (Step 7) (5x2) 10 Downloaded from 8. Commercialisation (Step hlayiso.com 8) (6x2) 12 9/19/2020 MM N5 MODULE 1 24

STEP 1: ORGANISING FOR NEW-PRODUCT DEVELOPMENT I. It is important to provide an effective organisation wherein product development can be stimulated, planned, carried out, co-ordinated and controlled. Organising for the development of new products is the first steps in the product development process. II. There are six different organisational arrangements/possibilities for new product that exist. NB 1) Establishment a new company 2) Special tasks forces 3) New-product department (6x2) 12 4) New-product committees 5) New-product managers 6) Product managers Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 25

six different organisational arrangements a) Establishment a i. This is an option if both the market and technology new company are new to the firm ii. The firm does not have the necessary skills, resources or knowledge to develop the product. iii. This strategy is called product diversification. b) Special task I. They comprise of functional experts, eg forces marketing, finance, purchasing II. The task report daily to the top management because they don’t form part of firm. III. Two types of task forces exist: Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 26

Special task forces Two types of task forces exist: Project management: New product venture team: Venture team is a group I. The team has well-define, consisting of expects brought specific task with a deadline together from various laid down. departments. (Definition) II. The composition is unique, I. Their task is to develop requires certain skills. specific product. III. The abilities and skills of the II. They must complete the project leaders have an project within a specific time influence on the success of frame and within limitations of the task force. a pre-determined budget. IV. The team disband after III. Team members are relieved completion of the task. from their other duties. IV. The new product venture team does not disband after Downloaded from hlayiso.com task completion 9/19/2020 MM N5 MODULE 1 27

d) New-product committees A new-product committee is an ad-hoc group whose members manage the product development process. The members usually represent functional interests, such as manufacturing, research and development, finance and marketing. Most committees are use to screen ideas. e) New-product managers They usually come from lower managerial level f) Product managers The product manager of an existing product in the mix can be allocated the task of developing a new product. Sometimes these people also do not have the necessary knowledge of skills to develop new products successfully Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 28

STEP 2: THE DEVELOPMENT OF PRODUCT IDEAS 1. This is a critical step in product development. The task of the product development starts with the obtaining of product ideas. 2. Sources of product ideas are: (NB) a) Consumers: b) The sales force and retailers c) Products of competitors d) Top management e) All employees f) Trade fairs and road shows g) Internet Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 29

STEP 3: IDEA SCREENING 1) Idea screening is the first idea reducing the number of ideas gathered in step 2 2) Ideas are screen in order to sport the good one and drop poor ones ASAP. 3) When doing idea screening we must keep in mind not to harm the image of firm. 4) Examples of screening criteria are as follows: a) Strength and weaknesses of the firm b) Whether the product fits the image of the firm c) Whether it fits the company objectives for growth and profit d) Return of investment e) Downloaded Competitive advantagefrom hlayiso.com gained. 9/19/2020 MM N5 MODULE 1 30

STEP 4: PRODUCT CONCEPT DEVELOPMENT This step comprises THREE sub steps namely: 4.1 The development of the 4.2 Trade mark & product positioning product concept By joining amalgamating Product positioning is to determine possible gaps (joining) unique product features in the market. and certain consumer needs and actions, a product concept is Products or services are 'mapped' together formed. on a 'positioning map'. This allows them to be compared and contrasted in relation to each other. This is the main strength of this tool. Marketers decide upon a competitive position which enables them to distinguish their own products from the offerings of their competition (hence the term positioning strategy). Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 31

4.3 Product concept testing  Product concept is tested by the group of consumers from the target market. (Please note: the product concept is only a description or statements of the proposed product. Therefore, the consumers cannot taste, smell or see it yet.  In this phase the opinion and reactions of consumers regarding the proposed product are tested.  Remember: It is only the product idea that is being tested – there is no physical product yet Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 32

STEP 5: THE PROFITABILITY ANALYSIS I. This step is a review of the expected sales, costs, and projected profit. II. The reason is to find out whether this factors will accomplish the company objectives III. Break-even point is that volume of production where sales revenue equals total costs. Neither a profit or loss is made IV. Profitability analysis of a new product is a very complicated. V. If the proposed product satisfies the profitability requirements, the development team will move onfrom Downloaded to the next step. hlayiso.com 9/19/2020 MM N5 MODULE 1 33

STEP6: PRODUCT DEVELOPMENT AND TESTING I. The product concept is now form into a physical object (prototype) II. It is a very important step because: III. It is the first time a physical (concrete) object is being developed IV. It is an expensive exercise V. The team can now determine whether the product will satisfy the consumer needs.  Two activities are executed during step 6 simultaneously: the physical product development Downloadedand testing from NB hlayiso.com 9/19/2020 MM N5 MODULE 1 34

6.1 The physical product development:  It consists of seven steps: NB 1. Technical research, engineering and technical testing: the experimental models are first developed and the final product follows later. 2. Dimensional and quantitative standardisation: The characteristics of the product, in order to make use of the advantages of standardisation, eg in packaging and production process. 3. Consumer preference testing: Focus groups and surveys can be used in this regard and it time consuming. 4. The firm must decide on after sales service if applicable and the duration and extent of warranties 5. Patents must be registered: the new product must comply with all legal regulations, eg product safety, labelling, and prescription regarding pollution. 6. The product must be sent to SABS for evaluation and approval. 7. Downloaded A brand name from and decision must be selected hlayiso.com on packaging must be made, this includes the inter alia, shape; size; colour; materials. 9/19/2020 MM N5 MODULE 1 35

6.2 Physical product testing 1) This is continuous process through-out physical product development 2) Ensures whether the product will comply with real needs of the consumers in the market. 3) Consumers preferred the proof of whether the product has been technically tested and it is therefore safe to use it. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 36

STEP 7: TEST MARKETING OF THE NEW PRODUCT Note: Please note the difference between market testing and test marketing  Market testing: The product is introduced to a selected audience, in a controlled environment, who gives their opinion about the product.  Test Marketing: The product is marketed (marketing mix) in a limited area of the market  Definition: is a marketing research method whereby a product and its proposed marketing strategy are tested for the first time under normal competitive circumstances in a small, but representative test market. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 37

FIVE DECISIONS REGARDING TEST MARKETING  The marketing management should deal with FIVE DECISIONS REGARDING TEST MARKETING. NB: 1) They must decide whether the test marketing is really necessary. 2) Managements must decide on the objectives of test marketing. 3) Who will execute test marketing; the company has two options whether to conduct themselves or to use external research company. 4) The marketing manager should know which procedure and method will be used during test marketing; how many laces/cities/towns/consumers are to be involved and how long will take. The available skills to conduct test marketing. 5) After test marketing results are available; therefore the company must decide about mass production and mass marketing. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 38

STEP 8: COMMERCIALISING THE NEW PRODUCT I. This step is where the new product is introduced into the market. II. The company must decide on date for introducing the product and when to launch. III. Management faces the lots of challenges during this stage: IV. Distribution must be organised. V. Price decision must be made. VI. market communication strategy must be developed VII. SalesDownloaded from representative hlayiso.com be trained or appointed if possible 9/19/2020 MM N5 MODULE 1 39

The decision to commercialisation sets several tasks in motion: NB 1. Ordering product materials and equipments 2. Starting production 3. Building inventories 4. Shipping the product to the field distribution 5. Training the sales force 6. Announcing the new product to the trade 7. Advertising to potential customers Note: during this phase, new equipment and manufacturing plants should be acquired for full-scale production. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 40

The PLC graph Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 41

Factors influencing PLC External factors Internal factors 1) Government behaviour 1) Supply source (raw materials) 2) Changes in consumer habits and preferences 2) People and management skills 3) Economic climate 3) Available production 4) Behaviour of competitors facilities 5) Technological development 4) Marketing skills 6) Distribution channels used 5) Technological knowledge Downloaded from hlayiso.com 6) Financial abilities 9/19/2020 MM N5 MODULE 1 42

5.1 INTRODUCTION: 1. A product like cycle is similar to that of a human being, it can be illustrated as follows: 2. After product development, it is also “born”, - the process of commercialisation. Like a baby. The young product creates lots of problems, therefore is called problem child (also the ‘wild cat’) this is in the introductory phase of the PLC. 3. Phase two in the PLC is similar to being a teenager. The product grows rapidly and stars are found in the growth phase of the PLC. 4. In the maturity phase of the PLC, the product is called cash cow similar to the role that mature adults are performing. They pay so that the teenagers and babies (stars and problem child) can grow. 5. Lastly similar to human life, the product becomes old (obsolete) this happens in the decline phase, and eventually is taken from the market place and it dies. This is called a dog. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 43

P INTRODUCTORY PHASE: (problem child/wild cat) 1. Purchase resistance. 2. Little direct competition exists in this phase. 3. Slow growth in sales due to inadequate shelf space. 4. Problems in production may occur. 5. High production cost due to capital investment. (5x2) 10 6. Profit is low due to sales volume Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 44

THE GROWTH PHASE (Star) a. Consumers buy more of the product. b. Increased number of competitors. c. Growth in sales is experienced d. Production methods are improved. e. Better utilisation of equipment. f. Profit is high (5x2) 10 Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 45

MATURITY PHASE (Cash cow)  In this stage the sales are relatively low because the early and late majority they are already in the market. 1. Sales stays more or less the same for period of time 2. More intense competition occurs. 3. The profit tends to decrease due to the price competition. 4. MARKETING STRATEGY 5. Aims: 6. To seek new market segment 7. To reposition the brand 8. Revise the ingredients of the product, lower the prices. 9. Existing consumers can be motivated to use the product again 10. New customers can be gain for existing products 11. Price decision: Price deals such as discount are used to Downloaded counteract from hlayiso.com by competitors. 9/19/2020 MM N5 MODULE 1 46

DECLINING PHASE (Dog) A. Permanent drop in sales: B. Eliminating of the product: C. Reduction in marketing costs: D. Price drops initially, E. Competition decline F. MARKETING STRATEGY: (NB)  Retain the present marketing strategy  To modify and repositioning the product  Eliminate the product. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 47

REPOSITIONING 1. Marketing management can attempt to prevent the totally disappearance of the product from the market by giving it a new life cycle. 2. This can be done in the following ways: I. New uses of the product can be developed with existing consumers. II. Use promotions to increase sales III. Gain new consumers to broaden the market. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 48

PRODUCT MIX DECISION/ PRODUCT STRATEGIES (NB)  Definition: Product strategies: Comprises of intentional and purposeful managerial decisions regarding the timeous and economical adaptation of the product mix to existing conditions in the marketing environment, as well as to expected changes. Product mix decision: regarding the entire product mix, management can make decision on product diversification and product specialization. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 49

PRODUCT MIX DECISION:  Product diversification refers to the expansion of the product mix, by adding new product item or product line to the existing mix.  Product specialization refers to the elimination of product items or product lines to the existing mix. The opposite of the product diversification.  Simplifications: comprises the purposeful limitation of variety of dimensions, shapes and other attributes which are possible to the product.(a business decides to manufacturer only black leather chairs)  Standardisation: setting /acceptance of specific dimensions, norms and standards according to which products must be manufactured. Standards can be laid down by group of business, an industry or by authorities.  Differentiation: the firmfrom Downloaded to distinguish its products strivehlayiso.com physically or psychologically from competitive products. 9/19/2020 MM N5 MODULE 1 50

Product aging (obsolescence)  Product aging (obsolescence) - Obsolete products are products that have become out-of-date. FOUR types can be identified I. Physical obsolescence occurs when a product physically wears out and becomes unsuitable for use. II. Psychological obsolescence: arise from the development of a new competitive product, which can either provide greater needs satisfaction to the consumer or perceived as such. III. Planned obsolescence: results from a specific marketing or production strategy. New products are purposefully developed to last only a specific physical life span. IV. Technological obsolescence: this occurs when product become obsolete due to the development of a Downloaded from hlayiso.com more technologically advanced product. 9/19/2020 MM N5 MODULE 1 51

NEW PRODUCT  new products are products that are totally new to the business and that are seen and experienced as totally different products. (Definition)  FOUR TYPES OF NEW PRODUCTS EXIST(NB): I. Products that are truly original and unique (the first washing machines, dvd’s, microwave oven and TV’s smart phones). II. Products that differ totally from present and existing products because of original products. III. Products that are new to the business but not necessarily new to the target market. IV. Products that are new to the target market, not necessarily new to the enterprise. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 52

THE WIDTH, DEPTH AND RELATIONSHIP OF THE PRODUCT RANGE 1. The width of the product mix consists of an amount of product lines that exist in the product mix of an enterprise. 2. The depth of product mix consists of the number of product items in each product line. 3. The relationship of the product mix is referred to as consistency that may exist between the different product lines. The uses, production requirements, distribution channels and marketing strategies are compared to determine the relationship of the product mix Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 53

THE BRANDING: I. Brand is a name, sign, symbol, design or combination of these variables intended to identify and differentiate the goods and services of one seller from its competitors. II. A brand, therefore, identifies the manufacturer or the seller of a product. III. The brand conveys a massage to the consumer. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 54

CONCEPTS USED IN CONNECTION WITH BRANDS: 1. Brand name (trade name) consists of words, letters and numbers that one can speak. Reebok, Absa, Toyota, 6 to 6. 2. Brand mark is that part of brand that appears in the form of symbol, design, specific colouring or lettering, e.g a well-known Adidas symbol. 3. Trademark is a legal term, It is a brand that is given legal protection, since it has been registered by a seller and can only be used by him/her (NB: these trademarks are brands and therefore include all aspects of brands already been discussed). 4. The master brand refers to a brand so dominant in consumer’s mind that they think of it immediately when a product category, use situations, product attribute or consumer benefits is mentioned. 5. A slogan is a striking and Downloaded easily from remembered phrase hlayiso.com used in advertising, 9/19/2020 MM N5 MODULE 1 55

CHOICE OF A TRADEMARK/BRANDMARK: 1. The brand name forms part of the product image and should therefore be distinguishable and meaningful. It is a symbol of the product and should enhance the product image. 2. A good trade name can chosen according to the following criteria: NB a. It is short and simple, but still interesting, b. It is easy to spell, read and pronounce, c. It is easy to recognise and remember, d. It is original and distinguishable, e. It is not offensive f. It does not become outdated g. It tell something about the product, Downloaded from hlayiso.com h. It creates an image of exclusiveness, 9/19/2020 MM N5 MODULE 1 56

5. 8.3 ADVANTAGES/IMPORTANCE OF BRANDS A. For the consumer: 1. It helps to identify the product at the point of purchase. 2. It assures consumers of a uniform quality standard. 3. Parts are more easily obtained if the brand is known. 4. If the consumer knows the brand, it speeds up the purchase process. 5. It serves as a warning if the consumer was previously dissatisfied about the product performance. 6. The consumer has greater freedom of choice as to where to buy his/her products Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 57

5. 8.3 ADVANTAGES/IMPORTANCE OF BRANDS Cont... 1. For the marketer: I. Manufacturers can use brands to control their market share. II. Brands can simplify and make product diversification easier. III. Brands forms the cornerstone of marketing communication decisions IV. Success brands add value to the product V. The seller of the product is protected against competition from other brands Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 58

TYPES OF BRANDS: BRANDING DECISIONS  Producers have to decide whether or not to sell their entire output under their own name and whether to sell any or all of their output under intermediary’s brands (reseller’s brands). 1. PRODUCER BRANDS/ MANUFACTURERS BRAND/NATIONAL BRANDS  The brand of producer appears on the product  The price are very expensive  The market share can be better controlled  Product diversification and product differentiation are simplified ◦ Example (Koo, All Gold, Kellogs and Nokia) Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 59

TYPES OF BRANDS: BRANDING DECISIONS Cont.... 1. RESELLER’S BRAND/DEALER’S BRAND 2. The name of the wholesaler or retailer appears on the product 3. The name of the manufacturer is unknown 4. They are of poor quality 5. There is battler of shelf space between producer brands and dealer brands. 6. (House brand by Checkers/Shoprite, No Name brand by Pick ‘n Pay, OK, Spar and Logic by Game). A. FAMILY BRANDS (COLLECTIVE BRANDS) I. The total product mix of a manufacturer is marketed under a common brand. II. (DEFYDownloaded from machines, – stoves, washing hlayiso.com fridges, microwave and dishwasher). 9/19/2020 MM N5 MODULE 1 60

TYPES OF BRANDS: BRANDING DECISIONS Cont.... INDIVIDUAL BRANDS i. Most manufacturers may prefer to use different names for different products. This practice is referred to as individual branding. ii. Companies use individual brands when their products vary greatly in used or performance, or aim at different target markets or are of different quality. iii. (SA Breweries Ltd with Castle Lager, Black Label etc and Volkswagen with Polo, Jetta, Beetle, Caddy, Touareg etc).  Each of these individual brands has its own target Downloaded market, fromand price, promotion hlayiso.com distribution strategy. 9/19/2020 MM N5 MODULE 1 61

THE PHASES IN TRADE MARK ACCEPTENCE Phase 1 - Trade mark awareness Consumer regards the product as similar to others, because they do not recognize/remember the trade mark. Maybe the consumer has not heard about the trade mark yet. Phase 2 - Trade mark recognition During this phase consumers have heard about the trade mark or maybe have seen it being advertised on television. Phase 3 - Trade mark preference Consumers are satisfied Downloaded withhlayiso.com from the product’s attributes based on previous experience. MM N5 MODULE 1 62 9/19/2020

THE PHASES IN TRADE MARK ACCEPTENCE Phase 4 - Trade mark insistence The consumers insist on the specific trade mark and refuse all substitutes. They will shop around until they find the specific trade mark. Phase 5 - Trade mark acceptance/rejection Acceptance: the trade mark is accepted by consumers, as it meets their requirements. Rejection: consumers reject the trade mark, because they find it unacceptable due to poor product image, poor performance or quality Downloaded from hlayiso.com 63 9/19/2020 MM N5 MODULE 1

PACKAGING DECISIONS AND LABELLING IMPONTANCE OF PACKAGING 1. Packaging also forms part of the product decision of a business 2. Packaging is essential for the protection, storage and physical handling of product. 3. Packaging can also be usefully applied in certain marketing consideration like product differentiation, consumer comfort and marketing communication  Definition: Packaging can be define as the activities that derive from product decisions about the design, manufacturing and filling the container or wrapper with the product item, so that the product item can be effectively protected, stored, handled, transported, identified and Downloaded successfully marketed. from hlayiso.com 9/19/2020 MM N5 MODULE 1 64

THE FUNCTIONS OF PACKAGING 1. Enclosure and protection  Protective packaging reduces the costs for retailers by cutting breakage and spoilage losses. Temper-proof packaging safeguard consumers. 2. Market development  A new package may be an important innovation for a firm and stimulate sales.  Packaging can be used as point –of-sale advertising in self- service stores. 3. To increase profitability  Often a product is packaged so uniquely and alluringly that the consumer is prepared to pay premium price for it. Cosmetics and perfume in unique containers as well as specialDownloaded editions wines. from hlayiso.com 9/19/2020 MM N5 MODULE 1 65

THE FUNCTIONS OF PACKAGING Cont.. 4. Packaging plays an important role in marketing communication Packaging contributes to the product image in the mind of the consumer. The design, brand, colour and general packaging play an important role in the marketing communication of the product. In self-service store, packaging must sell the product – referred to as the “silence persuader”. 5. Packaging facilities market segmentation Certain packaging, which differs in colour, form, size and design, can be used by businesses to market their products to certain market segments. 6. Packaging can be used to differentiate products. Sometimes, packaging is the only method of product differentiation, especiallyDownloaded for generic products. from The only way to distinguish between hlayiso.com Huletts sugar and Selati sugar is by means of packaging. 9/19/2020 MM N5 MODULE 1 66

7. PACKAGING STRATEGIES (8) 7.1 SPECIALITY PACKAGING  Here, an image of exclusivity and “specialness” is granted to the product. 7.2 RE-USABLE PACKAGING a) The container of a product can be designed in such a way that it can be used again after the contents have been used for their original purpose. b) The objective of reusable packaging is to motivate the consumer to buy the product to get hold of the container. c) Reusable containers are filled either with the same product or with something else. 7.3 COMBINATION PACKAGING  Here, products with a high relationship are packed together  When new products are introduced, combination packaging is often used.  This method can also be used for special price offers Downloaded from hlayiso.com  The combinations of products have a lower price than buying the products separately. 9/19/2020 MM N5 MODULE 1 67

PACKAGING STRATEGIES Cont… 7.4 MULTIPLE PACKAGING  A number of the same product is packaged together 7.5 KALEIDOSCOPIC PACKAGING  Kaleidoscopic packaging is a technique where the layout on the packaging constantly changes.  The main purpose of kaleidoscopic packaging is to create consumer demand.  Consumers do repeat buying to collect all the different points.  (Examples: Different pieces of a puzzle printed on the back Downloaded of breakfast from hlayiso.com cereal packs). 9/19/2020 MM N5 MODULE 1 68

PACKAGING STRATEGIES Cont… 7.6 UNIT PACKAGING  With unit packaging, the products are packed in individual units as needed by the consumer.  Retailer then sells single units to the consumer.  Wholesalers and retailers save quite an amount of money on unit packaging 7.7 RECYCLABLE AND BIODEGRABLE PACKAGING  Consumers are becoming increasingly concerned about the environment. Organisations must pay serious attention to recyclable packaging and biodegradable packaging. Downloaded  Biodegradable from –hlayiso.com packaging refers to packaging that can be decomposed by bacteria and fungi and 9/19/2020 MM N5 MODULE 1 69

PACKAGING MATERIALS 1) Bottles: Can be used for all types of fluids, medicines, aftershaves, cool drinks. Bottles differ in size and volume. 2) Carton containers: Are used widely and for many products. e.g long life milk, cookies, some spices. fast foods, fruit and many others 3) Wood: Plays a major role in many packaging aspect. A good example of this is the use of wooden crates for the transportation of fruits, wines and glass. 4) Containers: the biggest benefit of containing is protection of manufacturer’s products from damage. Transportation costs are also reduced to some extent. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 70

9.4 LABELLING  The main objective for the use of labels is to present information to the client/consumer. Labels carry the following information: directions on the use of the product, indication of the quality, washing instructions, the name of the manufacturer and special warnings. Labels perform the following tasks: NB 1) They inform the consumer about the grade/quality of the product 2) It describes the ingredients. 3) It may contain a warning 4) It disclose the net content 5) It can suggest direction for use 6) It disclose the namefrom Downloaded and the location of the hlayiso.com manufacturer 9/19/2020 MM N5 MODULE 1 71

THREE TYPES OF LABELS ARE DISTINGUISHED NB 1. Brand/trademark labels – Displaying the brand name of the product or retailer, Woolworth’s label on clothing 2. Informative labels: - These labels can use words or visual symbols to present information (caretaking, warnings, instructions, nutrition’s etc). 3. Grading labels: - Here the quality of the product appears on the label. (grade A1, Prima A, Grade B lamb, M, L, XL etc). Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 72

BAR CODING AND ELECTRONIC SCANNING  Bar coding is the special numbering of a product item so that an electronic device can read it.  A Bar code mainly containing a series of bars with spaces of varying width in between. These bars and spaces are predetermined according to certain standards and structure.  Laser scanners and other optical devices are used to read the bars and spaces. The standard number consists of 13 digits and is adaptable to the numbering systems for product items that are used in Europe, Japan, Australia and New Zealand. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 73

Image of barcode Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 74

Barcode History  The concept for the barcode was developed by Norman Joseph Woodland, who drew a series of lines in the sand to represent Morse code, and Bernard Silver.  A patent was granted in 1966 and NCR became the first company to develop a commercial scanner to read barcode symbology.  A pack of Wrigley’s gum was the first item ever scanned, at Marsh’s supermarket in Troy, Ohio, hometown. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 75

13 digits bar code (Explanation)  The first three digits show the numbering bank, which is administrated by the South African Numbering Association (SAANA).  The following four digits are given to the manufacturer or member by SAANA.  The next five digits are used by the manufacturer to identify the product item.  The last digit is a control digit, which is calculated over the previous 12 digits to assure that the code has been correctly compiled.  A shorter version –the EAN 8 - consists of eight digits and is used on Downloaded small from packages. hlayiso.com 9/19/2020 MM N5 MODULE 1 76

IMPLEMENTATION OF BAR CODING Bar codes nowadays form part of the packaging. At the point-of-purchase, an optical scanner is used to “read” the code and number is conveyed to a central terminal (computer). The computer identifies the product item and its price and the information is printed out at the cash register. Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 77

BENEFITS OF BAR CODING AND ELECTRONIC SCANNING For the manufacturer I. Standard product item numbers: By making use of standardised product item numbers, communication in all distribution channels is improved and mistakes caused by inaccurate product descriptions are reduced. II. Acceptance by retailers: nowadays retailers prefer bar coded products items III. Feedback about sales: sales of new products can be monitored easily. IV. Identification of market inclinations: The timely and accurate information from retailers can show market tendencies quickly V. Feedback about the achievements: of the new product. Downloaded Feedback from hlayiso.com about achievements can help the manufacturer to plan his product effectively 9/19/2020 MM N5 MODULE 1 78

BENEFITS OF BAR CODING AND ELECTRONIC SCANNING Cont.. For the retailer I. Better utilisation of shelf space: space can be allocated to achieve products II. Improve stock control: using bar code, the retailer can stock optimal goods. III. Accurate price recovery and indication: The affixing of wrong prices to products is now eliminated and correct prices of the product items can be recovered from the client IV. Improved cash register productivity: resulting in saving on personnel costs V. Improved cashier services: bar coding expedites cashier services. VI. Eliminating purposeful price Downloaded reduction from by cashiers hlayiso.com VII. Improved control over shoplifting: 9/19/2020 MM N5 MODULE 1 79

BENEFITS OF BAR CODING AND ELECTRONIC SCANNING Cont.. For the consumer: 1) Descriptive cash slip: After paying for purchase, a slip is handed to the customer on which descriptions and prices of all products purchased appeared 2) Price comparisons: The cash slip can be used to do price comparisons between retailers. 3) Shopping list: The retail slip can be used as shopping lists in future purchases 4) Faster service at the cash register: the speed of payments can rapidly increased 5) Accurate price determinations: the buyer makes the decision to buy according to the price appearing on the shelf. Downloaded from hlayiso.com 6) Fewer sorry-no-stock situations 9/19/2020 MM N5 MODULE 1 80

THE END OF MODULE 1 & SOMEBODY IS GOING TO GET HURT REAL BAD! Downloaded from hlayiso.com 9/19/2020 MM N5 MODULE 1 81