Chapter 11 Products and Services for Consumers

11.1 product concepts and component Product Concepts A product is a good, service, or idea - Tangible Attributes Intangible Attributes Product classification - Consumer goods - Industrial goods Life Span Based Product Classification Durable Non-Durable Disposable

Product Component Model SUPPORT SERVICES COMPONENT PACKAGING COMPONENT  Repair and maintenance  Deliveries CORE COMPONENT  Trademark  Price  Product platform  Design features  Functional features  Legal  Installation  Warranty  Quality  Brand name  Package  Instructions  Spare parts  Legal  Styling  Other related services  Legal

11.2 Global Markets and Product Development domestic market extension concept Domestic Product extension multi-domestic market concept Differentiated products for each unique market global market concept Global products marketed worldwide

11.3 Quality Market-Perceived Quality Performance Quality Swiss France “Mad Cow” Swiss France

4Rs - redesign, reduce,recycle,reuse 11.4 Packaging and Green Marketing Packaging serves three major functions: protection, promotion, and user convenience. Package aesthetics must be a consideration in terms of the promotional role of packaging: prudent choice of colors and package shapes、pattern; package size Green Marketing 4Rs - redesign, reduce,recycle,reuse

11.5 Brands Bundle of images and experiences in the customer’s mind A promise made by a particular company about a particular product A quality certification Differentiation between competing products

A strong brand is a global marketing asset. The Most Valuable Brands 11.5a Brand Equity A strong brand is a global marketing asset. The Most Valuable Brands

11.5a Brand Equity An asset that represents the value created by the relationship between the brand and customer over time. The added value that accrues to a product as a result of investments in the marketing of the brand.

11.5b Brand Strategies Global Brands National Brands Global/National Brand Mix Private Brand

Global brands worldwide use of: ‘brand equity’ name sign (logos) symbols ‘brand equity’ the main asset of some corporations use this equity to create worldwide image (which may proceed products) e.g. Top 20 Global Brands

Global brands have the same name and similar image and positioning throughout the world Operated under the same global brand strategy While flexible Marketing combination.

National brand Brand locally Importance of nationalistic pride Be rebuilt as global brand

Global/National Brand Mix same or different names across borders ? dual strategy -Global brand - many country-specific brands Example: Unilever Nestlé

1.1a Globalization Jack Welch : 1990s Globalization

brands local but technology global Nestlé Brand expansion strategy: - acquiring well-established national brands - using global brands brands local but technology global and people regional Global/National Brand Mix It depends-the market dicates. ‘global brands where possible, national brands where necessary’

Private brands private (distributor’s ) brands owned by the retailers increasingly common in many sectors (supermarkets) Wal-Mart vs Proctor & Gamble who controls channels? source of their respective power? which brand is better known? private brands may enjoy significant competitive advantages higher margins preferred shelf space strong in-store promotion

Products and Culture A product is more than a physical item. It is a bundle of satisfactions (or utilities) that the buyer receives. Cultural Influences: A close study of the meaning of a product shows to what extent the culture determines an individual’s perception of what a product is and what satisfaction that product provides. When analyzing a product for a second market, the extent of adaptation required depends on cultural differences in product use and perception between the market the product was originally developed for and the new market. Irwin/McGraw-Hill

11.6a Innovative Products and Adaptation product life cycle and acceptance of new products some examples: telegrams/ telex/ fax machines/ cellular phones/ e-mail

In stageⅠof innovation, the technology of a new product is newly invented;the new product is really R&D intensive product;there is no export. In stage Ⅱof technology diffusion, the technology is mature and the production process becomes standard;the product becomes capital and skilled-labor intensive product;the innovation country exports to other countries to satisfy the rapidly increased demands abroad. In StageⅢ of technology stagnation, the technological cycle comes to the end;the product becomes labor intensive. The less developed countries take the advantage of low-wage labor and become the main producers and exporters

1.1a Globalization Jack Welch : 1990s Globalization

11.6b Diffusion of Innovations starts with new products distributed through channels over a (variable) time period among members of a social system Three extraneous variables affecting the rate of diffusion of an object: the degree of perceived newness The perceived attributes of the innovation The method used to communicate the idea

Degree of Newness -no real change for consumer Congruent Innovations -no real change for consumer Continuous Innovation - minor variations of existing product Dynamically Continuous Innovation - changes in life style Discontinuous Innovation - truly new product/ use/ behavior

Characteristics of Innovations factors affecting adoption rate Characteristics of Innovations  Relative Advantage over older products  Compatibility  Complexity  Trialability Observability (Kellogg is India - ‘breakfast’?)

11.7 Marketing Consumer Services Globally Product - tangible goods - intangible services commercial services

11.7a Services Opportunities in Global Market Top Consumer Services Exports Tourism 5. Telecommunications Transportation 6. Entertainment Financial Services 7. Information Education 8. Health Care

11.7b Unique Characteristics of Services Intangibility; Inseparability; Heterogeneity; Perishability Inseparable in that its creation cannot be separated from its consumption. Heterogeneous in that it is individually produced and is thus virtually unique. Perishable in that once created it cannot be stored but must be consumed simultaneously whit its creation.

11.7c Four Barriers That Face Consumer Services Marketers Protectionism Controls on Transborder Data Flows Protection of Intellectual Property Cultural Requirements for Adaptation