Transcript Product and Service

PRODUCT AND SERVICES
STRATEGY
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WHAT IS A PRODUCT?
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Product and Service
# Pure tangible goods
# Pure services
# Tangible goods with accompanying services
# Hybrid offer
# Service with accompanying minor goods
Experiences
* Experiences are memorable
* Experiences are personal and take places in
the consumer’s mind
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Levels of products
Installation
Packaging
Brand
name
Core Feature
AfterDelivery
benefit
sale
and
or
service
credit Quality service
Design
level
Warranty
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Augmented
product
Actual product
Core product
PRODUCT CLASSIFICATIONS
Based on the types of consumers –
Product
Consumer
product
Industrial
product
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Consumer products
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Consumer products are those bought by final
consumers for final consumption.
Convenience
product
Shopping
product
Specialty
product
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Unsought
product
1. Convenience product
Marketing considerations
Customer
buying
behavior
Price
Frequent purchase, little planning, little
comparison or shopping effort, low
customer involvement
Low price
Distribution
Widespread distribution, convenient
location
Promotion
Mass promotion by the producer
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2. Shopping product
Marketing considerations
Customer
buying
behavior
Price
Less frequent purchase, much planning and
shopping effort, comparisons of brands on
different attributes
Higher price
Distribution
Selective distribution in fewer outlets
Promotion
Advertising and personal selling by producers
and resellers
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3. Specialty product
Marketing considerations
Customer
buying
behavior
Price
Strong brand preference and loyalty,
special purchase effort, little comparisons
of brands, low price sensitivity
High price
Distribution
Exclusive distribution in only one or a few
outlets per market area
Promotion
More carefully targeted promotion by
both producers
and resellers
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4. Unsought product
Marketing considerations
Customer
buying
behavior
Little product awareness, knowledge (or, if
aware, little or even negative interests)
Price
Varies
Distribution
Varies
Promotion
Aggressive advertising and personal
selling by producers and resellers
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Industrial products
Industrial products are those purchased for
further processing or for use in conducting a
business.
Materials
and parts
Capital
items
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Supplies
and
services
1.
Materials and parts
–
–
2.
Raw materials (Farm products and Natural
products)
Manufactured materials and parts
(component materials and component parts)
Capital items
–
–
Installations (Building and equipments)
Accessory equipments (factory equipment
and office equipment)
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3. Supplies and services
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Supplies –
– Operating supplies (paper, pencils)
– Repair and maintenance items (paint)
Business Services -– Maintenance and repair services
(computer repair)
– Business advisory services (legal,
advertising, management consulting)
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Other marketable entities
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Organization marketing – To create, maintain or
change the attitudes and behavior of target consumers
toward an organization.
Person marketing -- To create, maintain or change
the attitudes and behavior of target consumers toward
particular person.
Place marketing -- To create, maintain or change
the attitudes and behavior of target consumers toward
particular places.
Idea marketing/Social marketing – To increase
the acceptability of a social idea, cause or practice
within targeted groups.
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INDIVIDUAL PRODUCT DECISIONS
Product
attributes
Branding
Packaging
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Labeling
Product
support
services
1.

Product Attributes
Product quality –
Two dimensions
Quality level/Performance quality
Quality consistency/Conformance quality
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Product features
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Product style and design
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2.
Branding
A brand is a name, sign, symbol, or design, or a
combination of these, that identifies the maker or
seller of a product or service.
Brand equity is the value of a brand, based on the
extent to which it has –
– High brand loyalty
– Name awareness
– Perceived quality
– Strong brand associations
– Other assets such as patents, trademarks
and channel
relationships
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Major branding decisions
Brand name
selection
Selection
Protection
Brand
sponsor
Brand
strategy
Manufacturer’s
brand
Private brand
Licensing
Co-branding
Line
extensions
Brand
extensions
Multibrands
New brands
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a.
Brand name selection
Desirable qualities for a brand name –
 It should suggest something about the product’s
benefit and qualities.
 It should be easy to pronounce, recognize and
remember.
 It should be distinctive.
 It should translate easily into foreign languages.
 It should be capable of registration and legal
protection.
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b.
Brand sponsor
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Manufacturer’s brand (national brands)
Private brand (store brand/distributor
brand)
Licensing (many companies license
names or symbols created by other
manufactures, names of celebrities and
others)
Co-branding (using the established
brand names of two different companies
on the same products)
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c.
Brand strategy
Product category
Existing
Brand
name
New
Existing
New
Line
extension
Brand
extension
Multibrands
New brands
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3.
Packaging
Packaging involves designing and producing the
container or wrapper for a product.
The package may include –
a.
b.
c.
Primary container:
The tube of toothpaste.
Secondary package: The cardboard box
containing the tube of
toothpaste.
Shipping package:
The box carrying six dozen
tubes of toothpaste.
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4.
Labeling
Labels may range from simple tags attached to
products to complex graphics that are part of the
package.
The functions –
a. Identify the product or brand
b. Describe several things about the product
c. Promote the product through attractive
graphics
5.
Product support services
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PRODUCT MIX DECISIONS
A product mix/product assortment consists of all the
product lines and items that a particular seller offers
for sale.
Four important dimensions –
1.
Width-
The number of different product lines the
company carries.
2.
Length-
The total number of items the
carries within its product lines.
3.
Depth-
The number of versions offered to each
product in the line.
4.
Consistency- How closely related the various product
lines are in end use, production,
channels
or some other way.
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companies
Example: P & G
Product mix width
Product
line
length
Detergents
soap
Toothpaste
Diapers
Paper
tissue
Tide
Lava
Crest
Pampers
Puffs
Cheer
Camay
Banners
gain
Safeguard
Charmin
bold
Oil of Olay
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SERVICE MARKETING
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Services by Governments:
Hospitals, military services, police & fire
departments, postal services, schools.
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Services by Private nonprofit organizations:
Museums, charities, colleges, hospitals.
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Services by business organizations:
Airlines, banks, hotels, real estate firms, advertising
agencies.
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Nature and characteristics of a
service
Intangibility
Inseparability
Services cannot be seen,
tasted, felt, heard or
smelled before purchase
Services cannot be
separated from their
providers
Services
Perishability
Variability
Quality of services
depends on who
provides them and when
where and how
Services cannot be
stored for later sale or
use
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