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Chapter 11 Product and Service Strategies Principles of Contemporary Marketing Kurtz & Boone.

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Presentation on theme: "Chapter 11 Product and Service Strategies Principles of Contemporary Marketing Kurtz & Boone."— Presentation transcript:

1 Chapter 11 Product and Service Strategies Principles of Contemporary Marketing Kurtz & Boone

2 CHAPTER 11 Product and Service Strategies Chapter Objectives 1.Define product and distinguish between goods and services and how they relate to the goods-services continuum. 2.Outline the importance of the service sector in today’s marketplace. 3.List the classifications of consumer goods and services and briefly describe each category. 4.Identify each of the types of business goods and services. Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

3 CHAPTER 11 Product and Service Strategies Chapter Objectives 5.Discuss how quality is used by marketers as a product strategy. 6.Explain why firms develop lines of related products. 7.Describe the way marketers typically measure product mixes and make product mix decisions. 8.Explain the concept of the product lifecycle. 9.Describe how a firm can extend a product’s lifecycle, and explain why certain products may be deleted. Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

4 CHAPTER 11 Product and Service Strategies o Product - Bundle of physical, service, and symbolic attributes designed to satisfy a customer’s wants and needs o People buy want satisfaction, not objects o Example: Consumers buy televisions because they want entertainment, not because they want a box with a screen What is a Product? Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

5 CHAPTER 11 Product and Service Strategies o Services - Intangible tasks that satisfy the needs of consumer and business users o Goods - Tangible products that customers can see, hear, smell, taste, or touch o Goods–services continuum - Spectrum along which goods and services fall according to their attributes, from pure good to pure service What are Goods and Services? Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

6 CHAPTER 11 Product and Service Strategies Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

7 CHAPTER 11 Product and Service Strategies o Intangible o Inseparable from the service providers o Perishable o Cannot be standardized o Buyers play important roles in the creation and distribution of services o Wide variations in service standards Characteristics of Services Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

8 CHAPTER 11 Product and Service Strategies Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

9 CHAPTER 11 Product and Service Strategies Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

10 CHAPTER 11 Product and Service Strategies Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

11 CHAPTER 11 Product and Service Strategies Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

12 CHAPTER 11 Product and Service Strategies o Quality is a key component to a firm’s success in a competitive marketplace o The efforts to create and market high-quality goods and services have been referred to as total quality management (TQM) Quality as a Product Strategy Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

13 CHAPTER 11 Product and Service Strategies o ISO 9001:2000 standards implemented by the European Union define international, generic criteria for quality management and assurance ISO o The U.S. member body of ISO is the National Institute of Standards and TechnologyNational Institute of Standards and Technology Worldwide Quality Programs Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

14 CHAPTER 11 Product and Service Strategies o Measuring quality by comparing performance against industry leaders o Involves three main activities: o Identifying manufacturing or business processes that need improvement o Comparing internal processes to those of industry leaders o Implementing changes for quality improvement Benchmarking Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

15 CHAPTER 11 Product and Service Strategies o Determined by five variables: o Tangibles o Reliability o Responsiveness o Assurances o Empathy Quality of Services Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

16 CHAPTER 11 Product and Service Strategies o Product line - Series of related products o Desire to grow o Growth potential is limited if a company focuses on a single product o Example: L. L. Bean began by selling a single style of boots but has grown by selling a variety of productsL. L. Bean Development of Product Lines Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

17 CHAPTER 11 Product and Service Strategies o Assortment of product lines and individual product offerings o Product mix width o Number of product lines a firm offers o Product mix length o Number of different products a firm sells o Product mix depth o Variations in each product that the firm markets The Product Mix Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

18 CHAPTER 11 Product and Service Strategies Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

19 CHAPTER 11 Product and Service Strategies o Increasing frequency of use o Increasing the number of users o Finding new uses o Changing package sizes, labels, or product quality Extending the Product Lifecycle Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

20 CHAPTER 11 Product and Service Strategies o Marketers prune product lines and eliminate marginal products to preserve limited resources o Firms may carry unprofitable items to carry a complete product line o Shortages or raw materials can prompt a firm to discontinue production o Firm may drop products that don’t fit into the direction in which it plans to grow Product Deletion Decisions Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.


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