Chapter 8 Product and Services Strategy. What is a Product? Anything that can be offered to a market...
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Transcript of Chapter 8 Product and Services Strategy. What is a Product? Anything that can be offered to a market...
Chapter 8
Product and Services Strategy
What is a Product?What is a Product?• Anything that can be offered to a market for
attention, acquisition, use or consumption.• Satisfies a want or a need.• Includes:
–Physical Products–Services–Persons–Places–Organizations–Ideas–Combinations of the above
What is a Service?
• A ServiceService is a form of product that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.
• Examples include:– Banking
– Hotels
– Tax Preparation
– Home Repair Services
Products, Services, and Experiences
Pure Tangible
Good
Pure Service
Soap
Tangible Good With
Accompanying Services
Auto With Accompanyi
ng Repair Services
Hybrid Offer
Restaurant
Service With
Accompanying Minor Goods
Airline Trip With
Accompanying Snacks
Doctor’s Exam
Product Levels
BrandName
Quality
Packaging
Styling
Features
Delivery& Credit
Installation
Warranty
After-Sale
Service
CoreBenefit
orService
CoreBenefit
orService
Actual ProductActual Product Core ProductCore Product
Augmented ProductAugmented Product
Fig 8-1
Unsought ProductsUnsought Products
New innovations Products consumers don’t want to think about these products Require much advertising &personal selling i.e Life insurance, blood donation
Product ClassificationsConsumer Products
Specialty ProductsSpecialty Products
Special purchase efforts High price Unique characteristics Brand identification Few purchase locations i.e Lamborghini, Rolex
Shopping ProductsShopping Products
Buy less frequently Higher price Fewer purchase locations Comparison shop i.e Clothing, cars, appliances
Convenience ProductsConvenience Products
Buy frequently & immediately Low priced Mass advertising Many purchase locations i.e Candy, newspapers
Suppliesand
Services
Suppliesand
Services
Materialsand
Parts
Materialsand
Parts
CapitalItems
CapitalItems
Product ClassificationsIndustrial Products
Business Services:
This advertisementfrom ServiceMasteroffers servicesranging fromcustodial, grounds ,technology, andenergy management.
Cl ic k or pre ss spa cebar to return.
Product ClassificationsOther Marketable Entities
• Activities undertaken to create, maintain, or change the attitudes and behavior toward the following:– Organizations - Profit (businesses) and nonprofit
(schools and churches).– Persons – Politicians, entertainers, sports figures,
doctors and lawyers.– Places - Business sites and tourism.– Ideas (social ideas marketing) – public health
campaigns, environmental campaigns, and others such as family planning, or human rights.
Place Marketing:Vacation spotsare the subject of most place marketing
Click or p ress space bar to re tu rn.
Individual Product Decisions (Fig. 8.2)
Product Attributes
Branding
Packaging
Labeling
Product Support Services
Product Quality Product Quality
Product FeaturesProduct Features
Product Style & Design
Product Style & Design
Ability of a Product to Perform Its Functions;
Includes Level & Consistency
Ability of a Product to Perform Its Functions;
Includes Level & Consistency
Help to Differentiate the Product from Those of the
Competition
Help to Differentiate the Product from Those of the
Competition
Process of Designing a Product’s Style & Function
Process of Designing a Product’s Style & Function
Developing a Product or Service Involves Defining the Benefits that it Will Offer Such
as:
Product Attributes
Design over per formance:
The iMac has less features than many computer s, but its unt radit ional design gr abbed it a number two spot on the best -sell ing computer list only a month af ter it s introduct ion.
Click to return.
Advantagesof
Brand Names
BrandEquity
Advantagesof
Brand Names
BrandEquity
Strong Brand Association
Strong Brand Association
AttributesAttributes
Quality & ValueQuality & ValueConsistencyConsistency
IdentificationIdentification
Perceived QualityPerceived QualityName AwarenessName Awareness
High Brand Loyalty
High Brand Loyalty
Branding
This Land-O-Lakes ad shows the depth of the brand.
Brand StrategyLine Extensions
Brand ExtensionsMultibrandsNew Brands
Brand StrategyLine Extensions
Brand ExtensionsMultibrandsNew Brands
Brand SponsorManufacturer’s Brand
Private BrandLicensed Brand
Co-branding
Brand SponsorManufacturer’s Brand
Private BrandLicensed Brand
Co-branding
Brand Name SelectionSelectionProtection
Brand Name SelectionSelectionProtection
Major Branding Decisions (Fig. 8.3)
Line ExtensionDannon Yogurt Flavors
MultibrandsSeiko Lasalle & Pulsar
Brand ExtensionBarbie Electronics
New BrandsWindex (by acquisition)B
rand
Nam
e
Existing New
Product Category
Existing
New
Four Brand Strategies (Fig. 8.4)
Good Brand Names:
Suggest product benefits
Become distinctive
Are free from poor foreignlanguage meanings
Suggest product qualities
Are easy to pronounce,recognize, remember
Packaging• Activity of designing and producing
the container or wrapper for a product.
• Packaging used to just contain and protect the product.
• Packing now has promotional value and marketers should:– Establish a packaging concept,– Develop specific elements of the
package,– Tie together elements to support the
positioning and marketing strategy.
This business-to-business ad offers to provideecologically sound packaging.
Besides its impact on theenvironment, what aspectsof packaging canhelp/hinder product sales?
How have these products become known by their packaging:•Cracker Jacks?•Capri Sun?
Labeling
• Printed information appearing on or with the package.
• Performs several functions:– Identifies product or brand
– Describes several things about the product
– Promotes the product through attractive graphics.
A classic labeling example .
What about thi s l abe l he lps to se ll the pr oduc t?
Click or press spacebar to r et urn.
Product - Support Services
Companies should design its support services to profitably meet the needs of target
customers and gain competitive advantage.
How?
Step 1. Survey customers to assess the value of current services and to obtain ideas for new services.Step 2. Assess costs of providing desired services.Step 3. Develop a package of services to delight customers and yield profits to the company.
Product Line LengthProduct Line LengthNumber of Items in the Product Line
Product Line LengthProduct Line LengthNumber of Items in the Product Line
Product Line DecisionsProduct Line Decisions
StretchingStretching
Lengthen beyond current range
FillingFilling
Lengthen within current range
Downward
Upward
WidthWidth - number of different
product lines
WidthWidth - number of different
product lines
LengthLength - total number of itemswithin the lines
LengthLength - total number of itemswithin the lines
Depth Depth - number of versions of each product
Depth Depth - number of versions of each product
Product Mix - Product Mix - all the product
lines offered
Product Mix - Product Mix - all the product
lines offered
Product Mix DecisionsProduct Mix Decisions
Co
nsi
sten
cy
IntangibilityIntangibility
InseparabilityInseparability
VariabilityVariability
PerishabilityPerishability
Can’t be seen, tasted, felt, heard, or smelled before purchase.
Can’t be separated from service providers.
Quality depends on who provides them and when, where and how.
Can’t be stored for later sale or use.
Nature and Characteristic of a Service
Marketing Strategies for Service Firms
• Managing Service Differentiation– Develop differentiated offer, delivery and image.
• Managing Service Quality– Empower front-line employees,– Become “Customer obsessed”,– Develop high service quality standards,– Watch service performance closely.
• Managing Service Productivity– Train current or new employees better,– Work on quality as well as quantity,– Utilize technology.
Service Differentiation
Offer
Image
Delivery
Service Firm Marketing Strategies
Additional Ps to service marketing:– People– Physical evidence– Process
Interactive marketing– Functional quality– Technical quality