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Marketing for MOST Module 07 – Product Strategies Ritsumeikan Asia Pacific University : Takamoto, Akihiro October, 2003.

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Presentation on theme: "Marketing for MOST Module 07 – Product Strategies Ritsumeikan Asia Pacific University : Takamoto, Akihiro October, 2003."— Presentation transcript:

1 Marketing for MOST Module 07 – Product Strategies Ritsumeikan Asia Pacific University : Takamoto, Akihiro October, 2003

2 Marketing for MOST: Module 7 – Product Strategies Product Strategies 1.What is a Product 2.Product Classification 3.Product Strategy 4.Branding 5.Brand / Product Positioning 6.Service 7.Intangible Products 8.Product Life Cycle 9.Innovation 10.Practice

3 Marketing for MOST: Module 7 – Product Strategies What is a Product Reaching a clear understanding of what a product is, is essential to the deep understanding of Marketing.

4 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies What is a Product A product is, to the potential buyer, a complex cluster of value satisfactions.

10 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 its having passed the bar exam.

13 Marketing for MOST: Module 7 – Product Strategies What is a Product The previous figure represents the expected product as everything inside the smallest circle, including the generic product. This represents the customers 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 Marketing for MOST: Module 7 – Product Strategies What is a Product The augmented product offers the customer more than they think they need or have become accustomed to expect.

15 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies What is a Product The 3 Levels of Product according to P. Kotler:

17 Marketing for MOST: Module 7 – Product Strategies Product Classification Classification of a Product

18 Marketing for MOST: Module 7 – Product Strategies Product Classification Classification of Goods

19 Marketing for MOST: Module 7 – Product Strategies Product Classification Product Classification by the ratio of tangible and intangible components. Examples: Soap Clothes Purely Tangible Cars TVs Mostly Tangible Restaurant Computer Half and Half Air Tickets Sightseeing Tour Mostly Intangible Medicare Music Concert Purely Intangible

20 Marketing for MOST: Module 7 – Product Strategies Product Strategy Individual product decisions Product Attributes –(Product Quality, Product Features, Product Style and Design) Branding Brand extensions Packaging Labeling

21 Marketing for MOST: Module 7 – Product Strategies Product Strategy Product Line Decision –Product line stretching –Downward –Upward –Both directions Product Line Filling

22 Marketing for MOST: Module 7 – Product Strategies Product Strategy High Low PRICE PRODUCT BENEFIT DOWNWARD STRETCHING

23 Marketing for MOST: Module 7 – Product Strategies Product Strategy High Low PRICE PRODUCT BENEFIT UPWARD STRETCHING

24 Marketing for MOST: Module 7 – Product Strategies Product Strategy High Low PRICE PRODUCT BENEFIT TWO-WAY STRETCHING

25 Marketing for MOST: Module 7 – Product Strategies Product Strategy High Low PRICE PRODUCT BENEFIT PRODUCT LINE FILLING

26 Marketing for MOST: Module 7 – Product Strategies Product Strategy WIDTH PRODUCT MIX DECISIONS DEPTH LENGTH Product AProduct BProduct CProduct D

27 Marketing for MOST: Module 7 – Product Strategies Brand Strategy A brand is a name, term, design, symbol, or other feature that identifies one sellers 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies Brand Strategy The Six dimensions of a brand according to Philip Kotler: Values Uses Culture Personality Attributes Benefits (functional and emotional)

30 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies Brand Strategy (David Aarker)

32 Marketing for MOST: Module 7 – Product Strategies Brand Strategy The Value of Brand Loyalty (David Aarker)

33 Marketing for MOST: Module 7 – Product Strategies Brand Strategy Creating and Maintaining Brand Loyalty (David Aarker)

34 Marketing for MOST: Module 7 – Product Strategies Brand Strategy The Brand Awareness Pyramid (David Aarker)

35 Marketing for MOST: Module 7 – Product Strategies Brand Strategy The Value of Brand Awareness (David Aarker)

36 Marketing for MOST: Module 7 – Product Strategies Brand Strategy (David Aarker)

37 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies Brand/Product Positioning

41 Marketing for MOST: Module 7 – Product Strategies Brand/Product Positioning

42 Marketing for MOST: Module 7 – Product Strategies Brand/Product Positioning

43 Marketing for MOST: Module 7 – Product Strategies Brand/Product Positioning

44 Marketing for MOST: Module 7 – Product Strategies Brand/Product Positioning Affluent Market Perceptions:

45 Marketing for MOST: Module 7 – Product Strategies Brand/Product Positioning

46 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies Service 4 Characteristics of Service: Variable InseperablePerishable Intangible SERVICE

48 Marketing for MOST: Module 7 – Product Strategies Service Service intangibility: A major characteristic of servicesthey cannot be seen, tasted, felt, heard, or smelled before they are bought.

49 Marketing for MOST: Module 7 – Product Strategies Service Service inseparability: A major characteristic of servicesthey are produced and consumed at the same time and cannot be separated from their providers, whether the providers are people or machines.

50 Marketing for MOST: Module 7 – Product Strategies Service Service variability: A major characteristic of servicetheir quality may vary greatly, depending on who provides them and when, where, and how.

51 Marketing for MOST: Module 7 – Product Strategies Service Service perishability: A major characteristic of servicesthey cannot be stored for later sale or use.

52 Marketing for MOST: Module 7 – Product Strategies Service Three Levels of Service: Proactive Reactive Primary

53 Marketing for MOST: Module 7 – Product Strategies Intangible Products People Organisation Place Nation University Orchestra There is nothing to which the principles of Marketing cannot be applied!

54 Marketing for MOST: Module 7 – Product Strategies Intangible Products Everyone is living by selling something. Life is selling; Selling is Life If that is true, why dont you master marketing that is far more powerful than selling? –(Aki Takamoto)

55 Marketing for MOST: Module 7 – Product Strategies Intangible Products Ogilvy on Jamaica

56 Marketing for MOST: Module 7 – Product Strategies Product Lifecycle –Sales and Profits (Paul Kotler)

57 Marketing for MOST: Module 7 – Product Strategies Product Lifecycle –(Paul Kotler)

58 Marketing for MOST: Module 7 – Product Strategies Product Lifecycle Varying Wave-lengths of Product Life Cycle Sales Time

59 Marketing for MOST: Module 7 – Product Strategies Product Lifecycle Product Life-cycles of Typing Machines Sales Time Manual Typewriter Electric Typewriter Word Processor Personal Computer

60 Marketing for MOST: Module 7 – Product Strategies Product Lifecycle Various Product Life-cycles patterns Sales Time

61 Marketing for MOST: Module 7 – Product Strategies Product Lifecycle Question: –Find examples corresponding to various P.L.C lifecycles. –Show some other patterns of P.L.C.

62 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies Innovation Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

64 Marketing for MOST: Module 7 – Product Strategies Innovation Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

65 Marketing for MOST: Module 7 – Product Strategies Innovation Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

66 Marketing for MOST: Module 7 – Product Strategies Innovation Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995

67 Marketing for MOST: Module 7 – Product Strategies Financial Screens Size of Opportunity Impact on existing business Return Potential Consumer Screens Need Intensity Uniqueness / Differentiation Innovation Innovation Evaluation and Screening Questions according to T.D. Kuczmarski Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995 Strategic Screens Fit with Strategic Objectives Exploits Internal Strategies Source of Competitive Advantage

68 Marketing for MOST: Module 7 – Product Strategies Strategic Screens Fit with Strategic Objectives Exploits Internal Strategies Source of Competitive Advantage Innovation Innovation Evaluation and Screening Questions according to T.D. Kuczmarski Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995 Financial Screens Size of Opportunity Impact on existing business Return Potential Consumer Screens Need Intensity Uniqueness / Differentiation

69 Marketing for MOST: Module 7 – Product Strategies Strategic Screens Fit with Strategic Objectives Exploits Internal Strategies Source of Competitive Advantage Innovation Innovation Evaluation and Screening Questions according to T.D. Kuczmarski Source: Innovation, Thomas D Kuczmarski, American Marketing Association, 1995 Consumer Screens Need Intensity Uniqueness / Differentiation Financial Screens Size of Opportunity Impact on existing business Return Potential

70 Marketing for MOST: Module 7 – Product Strategies Innovation

71 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies 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 Marketing for MOST: Module 7 – Product Strategies Practice Read the comments made by APU Students on Brand, Product and Service and discuss themBrandProduct Service What are your comments in relation to the contents of this module?


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