Transcript Chapter 1 - Personal homepages

Chapter 8
Product and Services Strategy
8-1
Road Map: Previewing the Concepts
Define product and the major classifications of
products and services.
Describe the roles of product and service
branding, packaging, labeling, and product
support services.
Explain the decisions companies make when
developing product lines and mixes.
Identify the four characteristics that affect the
marketing of a service.
Discuss the additional marketing considerations
for services.
8-2
What is a Product?
A PRODUCT is anything that can be offered to a
market for attention, acquisition, use, or
consumption and that might satisfy a want or need.
Includes:
Physical Objects
Services
Events
Persons
Places
Organizations
Ideas
Combinations of the above
8-3
What is a Service?
A SERVICE 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
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Products, Services, and Experiences
Tangible Good
Pure
With
Tangible Accompanying
Good
Services
Soap
Hybrid
Offer
Service
With
Accompanying
Minor Goods
Pure
Service
Auto With
Airline Trip
Accompanying Restaurant
With
Doctor’s
Repair
Accompanying Exam
Services
Snacks
8-5
Levels of Product (Fig. 8-1)
8-6
Product Classifications: Consumer
Convenience Products
Shopping Products
 Buy frequently & immediately
 Buy less frequently
Specialty Products
Unsought Products
 Special purchase efforts
 New innovations
 Low priced
 Mass advertising
 Many purchase locations
i.e Candy, newspapers
 High price
 Unique characteristics
 Brand identification
 Few purchase locations
i.e Lamborghini, Rolex
 Higher price
 Fewer purchase locations
 Comparison shop
i.e Clothing, cars, appliances
 Products consumers don’t
want to think about
 Require much advertising &
personal selling
i.e Life insurance, blood donation
8-7
Product Classifications: Industrial
Materials and Parts
Raw materials, manufactured
materials, and parts
Capital Items
Industrial products that aid in
buyer’s production or operations
Supplies and Services
Operating supplies, repair/
maintenance items
8-8
Product Classifications:
Other 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, new residents, and tourism.
Ideas (social ideas marketing) – Public health campaigns,
environmental campaigns, and others such as family
planning, or human rights.
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Individual Product Decisions
(Fig. 8-2)
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Product Attributes
Developing a Product or Service Involves Defining
the Benefits that it Will Offer Such as:
Product Quality
Ability of a Product to Perform Its
Functions; Includes Level &
Consistency
Product Features
Differentiates the Product from
Competitors’ Products
Product Style
& Design
Process of Designing a Product’s
Style & Usefulness
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Branding
Advantages to
Branding
Buyers:
• Identification
• Quality and value
Sellers
• Tells a story
• Provides legal protection
• Helps segments markets
Brand Equity
Higher brand loyalty
Name awareness
Perceived quality
Strong brand
associations
Patents, trademarks,
channel relationships
8-12
Brands and Brand Symbols
(p. 292)
Powerful brands such
as these have brand
equity:
Coca-Cola brand - $69
billion
IBM brand - $53 billion
Offers defense
against fierce price
competition.
8-13
Major Branding Decisions
(Fig. 8-3)
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Four Brand Strategies (Fig. 8-4)
Product Category
Existing
Brand Name
Existing
New
New
Line Extension
Dannon Yogurt Flavors
Brand Extension
Barbie Electronics
Multibrands
Seiko Lasalle & Pulsar
New Brands
Windex (by acquisition)
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Brand Strategy
Line Extension
Existing brand names extended to new forms, sizes,
and flavors of an existing product category.
Brand Extension
Existing brand names extended to new or modified
product categories.
Multibrands
New brand names introduced in the same product
category.
New Brands
New brand names in new product categories.
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Consider the following thought questions,
formulate an answer, pair with the student on
your right, share your thoughts with one
another, and respond to questions from your
instructor.
We can find Coke in six or more varieties; Tide in
Ultra, Liquid, and Unscented versions; and Crest
Gel with sparkles for kids.
List some of the issues these brand extensions
raise for the manufacturers, retailers, and
consumers.
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Packaging
Designing and producing
the container or wrapper
for a product.
Steps in developing a good
package:
Packaging concept,
Develop specific elements of
the package,
Elements must support
product’s position and
marketing strategy.
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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
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Product Support Services
Companies use product support services as a major
tool in gaining 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.
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Product Line Decisions
Product Line Length
Number of Items in the Product Line
Stretching
Filling
Lengthen beyond
current range
Lengthen within
current range
Downward
Both
Directions
Upward
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Product Mix Decisions
Procter & Gamble's Product Mix
Baby Care
Beauty Care
Fabric & Home
Care
Food &
Beverage
 Width – number of different product lines
 Length – total number of items the
company carries within product lines
 Depth – number of versions offered of
each product in line
Health Care
Six Toothpastes
in Line
Crest Multicare
Crest Cavity
Protection
Crest Tartar
Protection
8-22
Nature and Characteristic of a
Service (Fig. 8-5)
8-23
Illustrate how a movie theater can deal
with the intangibility, inseparability,
variability, and perishability of the
services it provides.
8-24
The Service-Profit Chain
(Fig. 8-6)
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Marketing Strategies for Service
Firms
Managing Service
Differentiation
Develop differentiated offer,
delivery, and image.
Managing Service Quality
Empower front-line
employees,
Become “Customer obsessed,”
Set 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
Well-designed Web
site
8-26
International Product and
Services Marketing
Decide Which Products & Services to Introduce
Decide How Much to Standardize or Adapt
Packaging Presents New Challenges
Service Marketers Face Special Challenges
Trend Toward Global Service Companies Will Continue
8-27
Rest Stop: Reviewing the Concepts
Define product and the major classifications of
products and services.
Describe the roles of product and service
branding, packaging, labeling, and product
support services.
Explain the decisions companies make when
developing product lines and mixes.
Identify the four characteristics that affect the
marketing of a service.
Discuss the additional marketing considerations
for services.
8-28