i t s good and good for you Chapter - Eight & Nine Product, Services, and Brands: Building Customer Value. New Product Development & Product life Cycle Strategies. 8-1
Product or Service can you tell the difference? i t s good and good for you 8-2
Products, Services, and Experiences Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want Service is a product that consists of activities, benefits or satisfaction that is essentially intangible and does not result in the ownership of anything 8-3
Levels of Product and Services Augmented product represents additional services or benefits of the actual product. 8-4
Product and Service Classifications Consumer products Industrial products 8-5
Consumer Goods Classification Staples Convenience Products Goods Impulse Products Emergency Products Shopping Products Goods Specialty Products Goods Homogeneous Shopping Products Heterogeneous Shopping Products Unsought Goods 8-6
Convenience goods Consumer usually purchases frequently, immediately, and with a minimum of effort. Staples are goods consumer purchase on a regular basis. Impulse goods are purchased without any planning or search effort. Emergency goods are purchased when a need is urgent. Shopping goods - Consumer compares quality, price and style. Homogeneous shopping goods are similar in quality but different enough in price. Heterogeneous shopping goods differ in product features and services that may be more important than price. 8-7
Specialty goods Have unique characteristics or brand identification for which a sufficient number of buyers are willing to make special purchasing effort. Unsought goods Consumers does not know about or does not normally think of buying. 8-8
Product and Service Decisions Marketers make product and service decisions at three levels: Individual product decisions Product line decisions Product mix decisions 8-9
Product and Service Decisions Individual Product and Service Decisions 8-10
Product Attributes Product form size, shape, or physical structure Features supplement basic functions Customization individual versus mass Performance level at which the product s primary characteristics operate Conformance degree to which all the produced units are identical and meet the promised specifications Durability product s operating life Reliability probability that a product will not malfunction or fail Repairability the ease of fixing a product when it malfunction or fails Style product s look and feel to the buyer. 8-11
Branding A name, term, sign, symbol or design, or a combination of them, intended to identify the Goods or services of one seller or group of sellers and to differentiate them from those of competitors. Consumers view a brand as an important part of a product, and branding can add value to a consumer s purchase. 8-12
Packaging 8-13
Labeling 8-14
Product Support Services Customer service is another important element of product strategy. Support services are an important part of the customer s overall brand experience. 8-15
Product Line Decisions Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges 8-16
Product Mix Decisions Product mix consists of all the products and items that a particular seller offers for sale» Width» Length» Depth» Consistency 8-17
Product-Mix Pricing Product-line pricing (various levels: $200, $400, and $600) Optional-feature pricing (sunroof, theft protection) Captive-product pricing (require the use of ancillary products: razors, films) Two-part pricing (fixed fee plus variable usage fee: telephone service) By-product pricing (production of certain goods often result in by-products; meat and fat in sausage) Product-bundling pricing offer products only in a bundle: product plus service Copyright 2012 2009 Pearson Education, Inc. 8-18 12-18
Product Line Pricing Copyright 12-19 2012 Pearson Education, Inc. 8-19
Optional-feature pricing 8-20
Captive-product pricing Some products require the use of ancillary products, or captive products. 8-21
Two-part pricing Consisting of a fixed fee plus a variable usage fee. If you talk beyond the plan then you have to pay extra usage fee. 8-22
By-product pricing production of certain goods often result in by-products; meat. Any income earned on the by-products will make it easier for the company to charge at lower price on its main product if competition forces it to do so. 8-23
Product-bundling pricing Sellers often bundle products and features. 8-24
Warranty and Guarantee Warranty is a document that is issued to protect a consumers right. The warranty is basically a promise ensuring the customer specific conditions, facts, or products are true. A guarantee is a document that also protects the right of a consumer. A guarantee promises that something that is sold is of the quality that is promised. Copyright 12-25 2012 Pearson Education, Inc. 8-25
Services Marketing Nature and Characteristics of a Service 8-26
Service Attributes Ordering ease how easy to place an order Delivery how well (e.g., speed, accuracy, and care) product or service is brought to the customer Installation work done to make a product operational Customer training To operate the equipment properly and efficiently Customer consulting data, information, systems, and advice that the seller offers to buyers Maintenance and repair service programs for helping customers keep purchased products in good working order 8-27
Branding Strategy: Building Strong Brands 8-28
The Role of Brands Identify the maker Simplify product handling Organize accounting Offer legal protection 8-29
The Role of Brands Signify quality Create barriers to entry Serve as a competitive advantage Secure price premium 8-30
Brand Equity Brand equity is a phrase used in the marketing industry which describes the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well known name, as consumers believe that a product with a well-known name is better than products with less well-known names. 8-31
The BRANDZ Model Bonding nothing better Advantage better than others Performance can it deliver? Relevance does something for me Presence Do I know about it? 8-32
Co-branding Co-branding, also called brand partnership, is when two companies form an alliance to work together, creating marketing synergy. Copyright 12-33 2012 Pearson Education, Inc. 8-33
Ingredient Branding Ingredient Branding is a marketing strategy where a component or an ingredient of a product or service is pulled into the spotlight and given it s own identity. Everyone is familiar with the now famous Intel Inside, and it s corresponding success. But why does it work? It works because, in general, consumers will pay more for a branded product (name brand vs. generic). Consumers trust established brands. 12-34 8-34
Brand Development Strategies 8-35
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Product Life-Cycle Marketing Strategies Product Life Cycle Stages: Development 8-37
Product Life Cycle Stages: Introduction 8-38
Product Life Cycle Stages: Growth 8-39
Product Life Cycle Stages: Maturity 8-40
Product Life Cycle Stages: Decline 8-41
Product Life Cycle Stages: Decline 8-42
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