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Marketing for MOST Module 07 – Product Strategies

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1 Marketing for MOST Module 07 – Product Strategies
技術経営コンソーシアム 開発担当者 :Ritsumeikan Asia Pacific University 教授: Takamoto, Akihiro 更新日 October, 2003

2 Product Strategies What is a Product Product Classification
Product Strategy Branding Brand / Product Positioning Service Intangible Products Product Life Cycle Innovation Practice

3 Reaching a clear understanding of what a product is, is essential
What is a Product Reaching a clear understanding of what a product is, is essential to the deep understanding of Marketing.

4 What is a Product A Product is more than a tangible thing.
It is not merely manufactured goods. A Product is more than a simple set of tangible features.

5 What is a Product An automobile is not simply a tangible machine for movement, visibly or measurably differentiated by design, size, color, options, horsepower, or miles per gallon. It is also a complex symbol denoting status, taste, rank, achievement, and aspiration.

6 But the customer buys even more than these.
What is a Product But the customer buys even more than these. The enormous efforts of the auto companies to cut the time between placement and the delivery of an order and to select, train, supervise, motivate, and enhance their dealerships suggest that these too are integral parts of “the product” people buy and are therefore ways by which they may be differentiated.

7 What is a Product In the same way a computer is not simply a machine for data storage, processing, calculation, or retrieval. It is also an operating system with special software protocols for use and special accompanying possibilities for and promises of maintenance and repair.

8 Products are problem-solving tools.
What is a Product People buy products (whether purely tangible products, purely intangible products, or hybrids of the two) in order to solve problems. Products are problem-solving tools.

9 a complex cluster of value satisfactions.
What is a Product A product is, to the potential buyer, a complex cluster of value satisfactions.

10 What is a Product The ‘product’ is what the product does; it is
the total package of benefits the customer receives when he buys

11 What is a Product The dots inside each ring represent specific activities or tangible attributes. For example, inside the “Expected Product” are delivery conditions, installation services, post-purchase services, maintenance, spare parts, training, packaging convenience, and the like.

12 What is a Product The “generic product” is
the rudimentary substantive “thing” without which there is no chance to play the game of market participation. For the steel producer it is the steel itself. In the case of a bank, it is loanable finds. For a realtor, it is “for sale” properties. For a retailer it is a store with a certain mix of vendables. For a lawyer it’s having passed the bar exam.

13 What is a Product The previous figure represents the “expected product” as everything inside the smallest circle, including the “generic product.” This represents the customer’s minimal expectations. Though these vary by customers, conditions, industries, and the like, every customer has minimal purchase conditions that exceed the generic product itself.

14 The “augmented product” offers the customer
What is a Product The “augmented product” offers the customer more than they think they need or have become accustomed to expect.

15 What is a Product The “potential product” consists of everything potentially feasible to attract and hold customers. Whereas the “augmented product” means everything that has been or is being done, the “potential product” refers to what may remain to be done, that is, what is possible.

16 The 3 Levels of Product according to P. Kotler:
What is a Product The 3 Levels of Product according to P. Kotler:

17 Product Classification
Classification of a Product

18 Product Classification
Classification of Goods

19 Product Classification
Product Classification by the ratio of tangible and intangible components. Examples: Air Tickets Sightseeing Tour Medicare Music Concert Soap Clothes Cars TV’s Restaurant Computer Purely Tangible Mostly Tangible Half and Half Mostly Intangible Purely Intangible

20 Product Strategy Individual product decisions Product Attributes
(Product Quality, Product Features, Product Style and Design) Branding Brand extensions Packaging Labeling

21 Product Strategy Product Line Decision Product Line Filling
Product line stretching Downward Upward Both directions Product Line Filling

22 Product Strategy DOWNWARD STRETCHING High PRICE Low PRODUCT BENEFIT

23 Product Strategy UPWARD STRETCHING High PRICE Low PRODUCT BENEFIT Low

24 Product Strategy TWO-WAY STRETCHING High PRICE Low PRODUCT BENEFIT Low

25 Product Strategy PRODUCT LINE FILLING High PRICE Low PRODUCT BENEFIT

26 Product Strategy PRODUCT MIX DECISIONS Product A Product B Product C
Product D LENGTH DEPTH WIDTH

27 Brand Strategy A brand is a name, term, design, symbol, or other feature that identifies one seller’s good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller.

28 Brand Strategy A product is something that is made in a factory;
A brand is something that is bought by a customer. A product can be copied by a competitor; A brand is unique. A product can be quickly outdated; A successful brand is timeless. Stephen King/WPP Group, London

29 Brand Strategy The Six dimensions of a brand according to Philip Kotler: Benefits (functional and emotional) Attributes Uses Values Personality Culture

30 Brand Strategy Brand Equity
A set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firms customers. (David Aarker)

31 Brand Strategy (David Aarker)

32 Brand Strategy The Value of Brand Loyalty (David Aarker)

33 Brand Strategy Creating and Maintaining Brand Loyalty (David Aarker)

34 Brand Strategy The Brand Awareness Pyramid (David Aarker)

35 Brand Strategy The Value of Brand Awareness (David Aarker)

36 Brand Strategy (David Aarker)

37 Brand/Product Positioning
General Motors: “We make a car for every ‘person, purse, and personality’ ” Chrysler: “Advantage: Chrysler” Ford: “Quality is job one” Mazda: “Just feels right”

38 Brand/Product Positioning
Jaguar: “A blending of art and machine” Saab: “The most intelligent car ever built” Lincoln Town Car: “What a luxury car should be” Bentley: “The closest a car can come to having wings”

39 Brand/Product Positioning
Mercedes: “Engineered like no other car in the world” BMW: The ultimate driving machine “Our cars are not made to offer something to everyone but something more to some.”

40 Brand/Product Positioning

41 Brand/Product Positioning

42 Brand/Product Positioning

43 Brand/Product Positioning

44 Brand/Product Positioning
Affluent Market Perceptions:

45 Brand/Product Positioning

46 Service What is a Service?
A service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

47 Service SERVICE 4 Characteristics of Service: Variable Perishable
Inseperable Intangible

48 Service Service intangibility:
A major characteristic of services—they cannot be seen, tasted, felt, heard, or smelled before they are bought.

49 Service Service inseparability:
A major characteristic of services—they are produced and consumed at the same time and cannot be separated from their providers, whether the providers are people or machines.

50 Service Service variability:
A major characteristic of service—their quality may vary greatly, depending on who provides them and when, where, and how.

51 Service Service perishability:
A major characteristic of services—they cannot be stored for later sale or use.

52 Service Three Levels of Service: Proactive Reactive Primary

53 Intangible Products People Organisation Place Nation University
Orchestra There is nothing to which the principles of Marketing cannot be applied!

54 Intangible Products “Everyone is living by selling something. Life is selling; Selling is Life” If that is true, why don’t you master marketing that is far more powerful than selling? (Aki Takamoto)

55 Intangible Products Ogilvy on Jamaica

56 Product Lifecycle Sales and Profits (Paul Kotler)

57 Product Lifecycle (Paul Kotler)

58 Product Lifecycle Sales Time
Varying Wave-lengths of Product Life Cycle Sales Time

59 Product Lifecycle Sales Time Product Life-cycles of Typing Machines
Manual Typewriter Electric Typewriter Word Processor Personal Computer Time

60 Product Lifecycle Various Product Life-cycles patterns Sales Time

61 Product Lifecycle Question:
Find examples corresponding to various P.L.C lifecycles. Show some other patterns of P.L.C.

62 Innovation Innovation Defined: According to Webster:
A new idea, method or device a novelty According to Kuczmarski A mindset, a pervasive attitude Or a way of thinking focused beyond the present into the future. Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

63 Innovation Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

64 Innovation Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

65 Innovation Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

66 Innovation Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

67 Innovation Innovation Evaluation and Screening Questions according to T.D. Kuczmarski Strategic Screens Fit with Strategic Objectives Exploits Internal Strategies Source of Competitive Advantage Consumer Screens Need Intensity Uniqueness / Differentiation Financial Screens Size of Opportunity Impact on existing business Return Potential Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

68 Innovation Innovation Evaluation and Screening Questions according to T.D. Kuczmarski Strategic Screens Fit with Strategic Objectives Exploits Internal Strategies Source of Competitive Advantage Consumer Screens Need Intensity Uniqueness / Differentiation Financial Screens Size of Opportunity Impact on existing business Return Potential Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

69 Innovation Innovation Evaluation and Screening Questions according to T.D. Kuczmarski Strategic Screens Fit with Strategic Objectives Exploits Internal Strategies Source of Competitive Advantage Consumer Screens Need Intensity Uniqueness / Differentiation Financial Screens Size of Opportunity Impact on existing business Return Potential Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

70 Innovation

71 Innovation Discipline of Innovation
(Peter Drucker) Entrepreneurship refers to a certain type of activity: INNOVATION Innovation – the effort to create a purposeful focused change.

72 Innovation Innovation Opportunities within a company
Unexpected occurrences – Rogaine, heart medicine Incongruities – growth of e-business & no profits (consulting) Process needs – efficiency; Industry and Market changes Further Innovation Opportunities Demographic Changes – baby boomers, retirement homes etc. Changes in Perception – 4 wheel drive, perception is now that many people need it, previously few people felt the need. New Knowledge – superstars, but a small % of new business. Peter Drucker

73 Practice Read the comments made by APU Students on Brand, Product and Service and discuss them What are your comments in relation to the contents of this module?


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