Chapter 8: Products and Services Strategy

Chapter 8: Products and Services Strategy

8-1 8-1 PRINCIPLES OF MARKETING Chapter Chapter 88 Product and Services Strategy What What is is aa Product? Product? 8-2 8-2 Anything Anything that that can can be be offered offered to to aa market market for for attention, attention, acquisition, acquisition, use use or or consumption. consumption. Satisfies Satisfies aa want want or or aa need. need. Includes: Includes: Physical

Physical Products Products Services Services Persons Persons Places Places Organizations Organizations Ideas Ideas Combinations Combinations of of the the above above Core Core Product Product Actual Actual Product Product Warranty Design AfterSale Service Features Core Core Benefit Benefit or or Service Service

Quality Level Delivery & Credit Brand Name Packaging Installation Augmented Augmented Product Product Levels Levels of of Product Product 8-3 8-3 Product Product Classifications Classifications Consumer Consumer Products Products Convenience Products > > > > Buy frequently & immediately Low priced Many purchase locations Includes: Staple goods Impulse goods Emergency goods

Specialty Products > > > > Special purchase efforts Unique characteristics Brand identification Few purchase locations Shopping Products > Buy less frequently > Gather product information > Fewer purchase locations > Compare for: Suitability & Quality Price & Style Unsought Products > New innovations > Products consumers dont want to think about > Require much advertising & personal selling 8-4 8-4 Product Product Classifications Classifications Industrial Industrial Products Products 8-5 8-5 Materials

Materials and and Parts Parts Capital Capital Items Items Supplies Supplies and and Services Services Product Product Classifications Classifications Other Other Marketable Marketable Entities Entities Marketed Marketed to to create, create, maintain, maintain, or or change change the the attitudes attitudes or or behavior behavior toward toward the the following: following: Organizations Organizations -- Profit Profit (businesses)

(businesses) and and nonprofit nonprofit (schools (schools and and churches). churches). Person Person -- Political Political and and sports sports figures, figures, entertainers, entertainers, doctors doctors and and lawyers. lawyers. Place Place -- Business Business sites sites and and tourism. tourism. Social Social -- Reduce Reduce smoking, smoking, clean clean air, air, conservation. conservation. 8-6 8-6 Product Product Support Support Services Services

Labeling Labeling Packaging Packaging Branding Branding Product Product Attributes Attributes Individual Individual Product Product Decisions Decisions 8-7 8-7 Product Product Attribute Attribute Decisions Decisions Quality Quality Design Design 8-8 8-8 Features Features Awareness Awareness Credibility

Credibility Attributes Attributes Advantages of Brand Names Identification Identification Association Association Brand Equity Loyalty Loyalty Quality Quality & & Value Value Consistency Consistency Brands Brands 8-9 8-9 Line Line Extensions Extensions Brand Brand Extensions Extensions Multibrands

Multibrands New Brands Brand New Strategy Brands Brand Strategy Manufacturers Manufacturers Brand Brand Private Private Brand Brand Licensed Licensed Brand Brand Co-branding Brand Sponsor Co-branding Brand Sponsor Selection Selection Brand Name Protection Brand Protection Name Selection Selection Major Major Brand Brand Decisions Decisions 8-10

8-10 Brand Brand Strategy Strategy 8-11 8-11 Multibrands New Brands New New Line Extension Existing Existing Brand Extension Brand Name Product Category Brand Brand Strategy Strategy Line Line Extension Extension Existing Existing brand brand names names extended

extended to to new new forms, forms, sizes, sizes, and and flavors flavors of of an an existing existing product product category. category. Brand Brand Extension Extension Existing Existing brand brand names names extended extended to to new new product product categories. categories. Multibrands Multibrands New New brand brand names names introduced introduced in in the the same same product product category. category.

New New Brands Brands New New brand brand names names in in new new product product categories. categories. 8-12 8-12 Packaging Packaging Sales Tasks 8-13 8-13 Competitive Advantages Packaging Packaging Product Safety Labeling Labeling Identifies Promotes Describes Product Product -- Support

Support Services Services 8-14 8-14 Companies should design its support services to profitably meet the needs of target customers. How? Step Step 1. 1. Survey Survey customers customers to to determine determine satisfaction satisfaction with with current current services services and and any any desired desired new new services. services. Step Step 2. 2. Assess Assess costs costs of of providing providing desired desired services. services. Step Step 3. 3. Develop Develop aa package package of

of services services to to delight delight customers customers and and yield yield profits. profits. Product Product Line Line Decisions Decisions 8-15 8-15 Product Product Line Line Length Length Number Number of of Items Items in in the the Product Product Line Line Stretching Filling Lengthen beyond current range Lengthen within current range

Downward Upward Depth Depth -- number number of of versions versions of of each each product product Length Length -- total total number number of of items items within within the the lines lines Consistency Product Product Mix Mix -all all the the product product lines lines offered offered Width Width -- number number of

of different different product product lines lines Product Product Mix Mix Decisions Decisions 8-16 8-16 Characteristics Characteristics of of Services Services 8-17 8-17 Intangibility Intangibility Cant be seen, tasted, felt, heard, or smelled before purchase. Inseparability Inseparability Cant be separated from service providers. Quality depends on who provides them and when, where and how. Cant be stored for later sale or use. Variability Variability Perishability Perishability

Greater Greater Service Service Value Value Satisfied Satisfied and and Productive ProductiveService Service Employees Employees Satisfied Satisfiedand andLoyal Loyal Customers Customers Health HealthService Service Profits Profitsand andGrowth Growth Internal Internal Service Service Quality Quality The The Service-Quality Service-Quality Chain Chain 8-18

8-18 Marketing Marketing Strategies Strategies for for Service Service Firms Firms Managing Managing Service Service Differentiation Differentiation Develop Developoffer, offer,delivery deliveryand andimage imagewith withcompetitive competitive advantages. advantages. Managing Managing Service Service Quality Quality Empower Empoweremployees employees Become BecomeCustomer Customerobsessed obsessed Develop Develophigh highservice servicequality qualitystandards standards Watch

Watchservice serviceperformance performanceclosely closely Managing Managing Service Service Productivity Productivity Train Traincurrent current or or new newemployees employees Increase Increasequantity quantityby bydecreasing decreasingquality quality Utilize Utilizetechnology technology 8-19 8-19

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