Product Mix and New Offerings

In this chapter, we will address the following questions:

• 1. What are the characteristics of products, and how do marketers classify products? (Page 163)
• 2. How can companies differentiate products? (Page 164)
• 3. How can a company build and manage its product mix and product lines? (Page 166)
• 4. How can companies use packaging, labeling, warranties, and guarantees as marketing tools? (Page 169)
• 5. What strategies are appropriate for introducing new offerings and influencing adoption?
• (Page 170)
• 6. What strategies are appropriate in different stages of the product life cycle? (Page 176)

Marketing Management at Lexus

Since its inception in 1989, Lexus has emphasized top-notch product quality and customer care, as reflected by its long-time slogan, “The Relentless Pursuit of Perfection.” As part of its “Lexus Covenant,” it has vowed to “have the finest dealer network in the industry, and treat each customer as we would a guest in our own home.” To this end, Lexus built its dealership framework from the ground up, hand-picking dealers committed to providing exceptional experience to customers, a system competitors acknowledge is the industry ideal. With its average buyer in his or her mid-50s, Lexus has set its sights on attracting younger buyers by emphasizing more aggressive styling, handling dynamics, and driver engagement. Social media and other promotions and events also create novel customer experiences around food, fashion, entertainment, and travel.1

At the heart of a great brand is a great product offering, which customers judge on three basic elements: product features and quality, service mix and quality, and price. In this chapter we examine product strategy, new product development, and the product life cycle. Chapter 10 explores services, and Chapter 11 discusses price.