Presentation on theme: "8-1 Chapter 8 Product and Services Strategy. 8-2 What is a Product? ProductA Product is anything that can be offered to a market for attention, acquisition,"— Presentation transcript:
8-2 What is a Product? ProductA Product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or a need. Includes: –Physical Objects –Services –Persons –Places –Organizations –Ideas –Combinations of the above
8-3 What is a Service? ServiceA Service is a form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and don’t result in the ownership of anything. Examples include: –Banking –Hotels –Tax Preparation –Home Repair Services
8-4 Levels of Product Brand Name Quality Level Packaging Design Features Delivery& Credit Installation Warranty After- Sale Service Core Benefit or Service Core Benefit or Service Actual Product Actual Product Core Product Core Product Augmented Product Augmented Product
8-5 Product Classifications Consumer Products Shopping Products > Buy less frequently > Higher price > Fewer purchase locations > Comparison shop Clothing, cars, appliances Convenience Products > Buy frequently & immediately > Low priced > Mass advertising > Many purchase locations Fast Food, Candy, Newspapers Specialty Products > Special purchase efforts > High price > Unique characteristics > Brand identification > Few purchase locations Lamborghini, Rolex Unsought Products > New innovations > Products consumers don’t want to think about > Require much advertising & personal selling Life insurance, blood donation
8-6 Product Classifications Industrial Products Supplies and Services Supplies and Services Materials and Parts Materials and Parts Capital Items Capital Items
8-7 Activities to create, maintain, or change the attitudes or behavior of target consumers toward the following : Activities to create, maintain, or change the attitudes or behavior of target consumers toward the following : Organizations -Organizations - Profit (businesses) and nonprofit (schools and churches). Person -Person - Political and sports figures, entertainers, doctors, lawyers and business people. Place -Place - Business sites and tourism. Social Ideas -Social Ideas -Reduce smoking, clean air, conservation. Product Classifications Other Marketable Entities
8-8 Individual Product Decisions Product Attributes Product Attributes Branding Packaging Labeling Product Support Services Product Support Services
8-10 Brands Advantages of Brand Names Brand Equity Advantages of Brand Names Brand Equity Loyalty Attributes Quality & Value Consistency Identification Awareness Credibility Defense Against Competition Defense Against Competition
8-11 Brand Strategy New Brands Line Extensions Brand Extensions Multibrands New Brands Line Extensions Brand Extensions Multibrands Brand Sponsor Manufacturer’s Brand Private Brand Licensed Brand Co-branding Manufacturer’s Brand Private Brand Licensed Brand Co-branding Brand Name Selection Selection Protection Selection Protection Major Branding Decisions
8-12 Brand Strategies Line Extension Dannon Yogurt Flavors Multibrands Seiko Lasalle & Pulsar Brand Extension Honda Motorcycles New Brands Windex (by acquisition) Brand Name ExistingNew Product Category Existing New
8-13 Brand Strategy Line ExtensionLine Extension –Existing brand names extended to new forms, sizes, and flavors of an existing product category. Brand ExtensionBrand Extension –Existing brand names extended to new product categories. MultibrandsMultibrands –New brand names introduced in the same product category. New BrandsNew Brands –New brand names in new product categories.
8-15 Product - Support Services Step 1. Survey customers to assess the value of current services and to obtain ideas for new services. Step 2. Assess costs of providing desired services. Step 3. Develop a package of services to delight customers and yield profits to the company. Companies should design its support services to profitably meet the needs of target customers and gain competitive advantage. How?
8-16 Product Line Length Number of Items in the Product Line Product Line Length Number of Items in the Product Line Product Line Decisions Stretching Lengthen beyond current range Filling Lengthen within current range Downward Upward
8-17 Width Width - number of different product lines Length Length - total number of items in product lines Length Length - total number of items in product lines Depth Depth - number of versions of each product Product Mix - all the product lines & items offered Product Mix - all the product lines & items offered Product Mix Decisions Consistency
8-18 Intangibility Inseparability Variability Perishability Can’t be seen, tasted, felt, heard, or smelled before purchase. Can’t be separated from service providers. Quality depends on who provides them and when, where and how. Can’t be stored for later sale or use. Characteristics of Services
8-19 Satisfied and Productive Service Employees Satisfied and Productive Service Employees Greater Service Value Greater Service Value Internal Service Quality Healthy Service Profits and Growth Healthy Service Profits and Growth Satisfied and Loyal Customers Satisfied and Loyal Customers The Service-Profit Chain
8-20 Marketing Strategies for Service Firms Managing Service DifferentiationManaging Service Differentiation –Develop differentiated offer, delivery and image. Managing Service QualityManaging Service Quality –Empower front-line employees, –Become “Customer obsessed”, –Develop high service quality standards, –Watch service performance closely. Managing Service ProductivityManaging Service Productivity –Train current or new employees, –Increase quantity by decreasing quality, –Utilize technology.
8-21 Rest Stop: Reviewing the Concepts Define product and the major classifications of products and services. Describe the roles of product and service branding, packaging, labeling, and product- support services. Explain the decisions that companies make when developing product lines and mixes. Identify the four characteristics that affect the marketing of a service. Discuss the additional marketing considerations that services require.