3.4 The Product/Service Mix March 4 th, 2010. Retail businesses we shop at are part of the service...
Transcript of 3.4 The Product/Service Mix March 4 th, 2010. Retail businesses we shop at are part of the service...
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3.4 The Product/Service Mix
March 4th, 2010
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Retail businesses we shop at are part of the service sector, even though they sell us a tangible product
They do not make the products or add anything to the products they resell
We actually pay for the service they provide
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Example: Old Navy Provides variety and
size selection Fitting rooms Return or exchange
policies Different payment
options Convenient locations Old Navy acts as
middleman between consumer and manufacturer
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What Services Can They Add?
Buying large appliances Buying a sweatshirt at Christmas time Buying a laptop Buying a suit Buying a book at Chapters Shopping at Ikea
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Discussion
Think of a specific business – what services can they add to make it better for those who frequent them?
Example:• Sit down restaurant – kids area
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What Products Can They Add?
Sports venues Movie theatres Universities Salons
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Activity – In Pairs
1) Name a product that was the leading product in the market until it was surpassed by competition. Why do you think this happened?
2) Make a list of 10 products or services you’ve purchased. Why did you choose them over other alternatives? What was the main competitive advantage?
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3.5 The Competitive Market
March 8, 2010
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Competitive Market
New products have potential to dislodge existing products. • Why? Limit to the number of consumers who
use a particular product, or brand.
Consists of specific types of products as well as the companies that manufacture these products
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Competitive Market
Market Size: Amount of money consumers spend annually on these specific products• Eg. Dragons Den – Underwear Market
Market Share: the % one company’s product takes of the total dollars spent by consumers on products within a specific category
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Competitive Market
Market Segment: Categories that marketers break broad segments into• Eg. Sports Drinks
are a segment of the beverage industry. • Gatorade is part of
the sports drinks market category.
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Increasing Market Share
Expand the pie? Or take a bigger chunk of the pie?
Difficult to expand the pie• Medical discoveries
cause this to happen
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Improving Market Share
Few companies experience more than a 1-2 point increase or decrease in market share in a year.
Small shifts are still important Many factors (eg. Negative publicity or
change in tastes) can affect market share