Page 373 - Marketing Management

350 PART 5 SHAPING THE MARKET OFFERINGS

functional and aesthetic benefits to consumers and can stretching (down-market, up-market, or both) or line fill-
be an important source of differentiation. ing, by modernizing its products, by featuring certain
products, and by pruning its products to eliminate the
6. Most companies sell more than one product. A prod-
uct mix can be classified according to width, length, least profitable.
depth, and consistency. These four dimensions are 8. Brands are often sold or marketed jointly with other
the tools for developing the company’s marketing brands. Ingredient brands and co-brands can add
strategy and deciding which product lines to grow, value, assuming they have equity and are perceived as
maintain, harvest, and divest. To analyze a product fitting appropriately.
line and decide how many resources to invest in it, 9. Physical products must be packaged and labeled. Well-
product line managers need to look at sales and prof- designed packages can create convenience value for
its and market profile.
customers and promotional value for producers.
7. A company can change the product component of its Warranties and guarantees can offer further assurance
marketing mix by lengthening its product via line to consumers.

Applications

Marketing Debate Marketing Discussion
With Products, Is It Form or Function? Product & Service Differentiation
The “form versus function” debate applies in many arenas, Consider the different means of differentiating products and
including marketing. Some marketers believe product per- services. Which ones have the most impact on your
formance is the be-all and end-all. Other marketers maintain choices? Why? Can you think of certain brands that excel
that the look, feel, and other design elements of products on a number of these different means of differentiation?
are what really make the difference.
Take a position: Product functionality is the key
to brand success versus Product design is the key to
brand success.

Marketing Excellence Caterpillar was founded in 1925 when two California-
based tractor companies merged. The name “Caterpillar,”
however, dates back to the early 1900s when Benjamin
>>Caterpillar Holt, one of the company’s founders, designed a tractor
crawler with wide, thick tracks instead of wheels. These
tracks prevented the machine from sinking into California’s
deep, rich soil, which was impassable when wet. The new
farm tractor crept along the farmland in such a way that
one observer said it “crawled like a caterpillar.”
Holt sold the tractor under the Caterpillar brand, and
once the merger occurred, the newly formed company
became Caterpillar Tractor Company. Since then, Caterpillar
Inc., or CAT, has grown into the largest manufacturer of
earth-moving equipment and engines in the world. With over
300 different machines for sale, Caterpillar offers product
solutions for eight industries: residential, nonresidential, in-
dustrial, infrastructure, mining and quarrying, energy, waste,
and forestry. Its distinctive yellow machines are found all
over the globe and have helped make the brand a U.S. icon.