Product and Services Strategy

(1)

8-1

Chapter 8

Product and Services

Strategy

(2)

8-2

What is a Product?

•

Anything that can be offered to a market

for attention, acquisition, use or

consumption.

•

Satisfies a want or a need.

•

Includes:

–

Physical Products

–

Services

–

Persons

–

Places

–

Organizations

–

Ideas

–

Combinations of the above

•

Anything that can be offered to a market

for attention, acquisition, use or

consumption.

•

Satisfies a want or a need.

•

Includes:

–

Physical Products

–

Services

–

Persons

–

Places

–

Organizations

–

Ideas

(3)

8-3

Levels of Product

(4)

8-4

Product Classifications

Consumer Products

Shopping Products

> _{Buy less frequently} > _{Gather product}

information

> _{Fewer purchase locations} > _{Compare for:}

• _{Suitability & Quality} • _{Price & Style}

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}

Unsought Products

> _{New innovations}

> _{Products consumers don’t} want to think about

(5)

8-5

Product Classifications

Industrial Products

Supplies

and

Services

Supplies

and

Services

Materials

and

Parts

Materials

and

Parts

Capital

Items

Capital

(6)

8-6

•

Marketed to create, maintain, or change the

attitudes or behavior toward the following:

•

Organizations - Profit (businesses) and

nonprofit (schools and

churches).

•

Person - Political and sports figures,

entertainers, doctors and lawyers.

•

Place - Business sites and tourism.

•

Social - Reduce smoking, clean air,

conservation.

•

Marketed to create, maintain, or change the

attitudes or behavior toward the following:

•

Organizations - Profit (businesses) and

nonprofit (schools and

churches).

•

Person - Political and sports figures,

entertainers, doctors and lawyers.

•

Place - Business sites and tourism.

•

Social - Reduce smoking, clean air,

conservation.

Other Marketable Entities

(7)

8-7

Individual Product Decisions

Prod

uct

A

ttri

but

es

butes

ttri

A

uct

Prod

Bran

din

g

din

Bran

g

Packagi

ng

Packagi

ng

Label

in

g

ing

Label

Prod

uct S

upp

ort S

ervices

rt S

uppo

uct S

Prod

(8)

8-8

Product Attribute

Decisions

Product Attribute

Decisions

Quality

Features

Design

(9)

8-9

Brands

Advantages

of

Brand Names

Brand

Equity

Loyal

ty

Loyal

ty

Att

ribu

te

s

tes

ribu

Att

Qual

ity

& V

alu

e

alu

V

&

ity

Qual

e

Con

sist

ency

sist

Con

ency

Iden

tif

icat

ion

tion

ica

tif

Iden

Aw

areness

Aw

areness

Cred

ibi

lit

y

bilit

Credi

y

Asso

ciat

io

n

io

ciat

Asso

(10)

8-10

Bran

d S

trat

egy

tegy

tra

d S

Bran

Lin

e E

xte

nsi

on

s

Bra

nd

Ex

ten

sio

ns

Mult

ib

ran

ds

New

B

ran

ds

Lin

e E

xte

nsi

on

s

Bra

nd

E

xte

nsi

on

s

Mult

ib

ran

ds

New

B

ran

ds

Bran

d S

pon

sor

pon

d S

Bran

sor

Ma

nu

fact

ure

r’s

B

ran

d

Priv

ate

B

ran

d

Lic

en

sed

B

ran

d

Co

-b

ran

din

g

Ma

nu

factu

rer

’s

Bra

nd

Priv

ate

B

ran

d

Lic

en

sed

B

ran

d

Co

-b

ran

din

g

Brand

N

am

e S

elect

ion

ectio

Sel

ame

N

Brand

n

Sel

ecti

on

Pro

tec

tio

n

Sel

ecti

on

Pro

tec

tio

n

Major Brand Decisions

(11)

8-11

Brand Strategy

Line

Ext

ensi

on

Mu

lti

bran

ds

Brand

Ext

ensi

on

New

Brand

s

B

ra

n

d

N

am

e

Existing

New

Product Category

Existing

(12)

8-12

Brand Strategy

•

Line Extension

–

Existing brand names extended to new

forms, sizes, and flavors of an existing

product category.

•

Brand Extension

–

product categories.

•

Multibrands

–

New brand names introduced in the same

product category.

•

New Brands

–

New brand names in new product categories.

•

Line Extension

–

forms, sizes, and flavors of an existing

product category.

•

Brand Extension

–

product categories.

•

Multibrands

–

New brand names introduced in the same

product category.

•

New Brands

(13)

8-13

Packaging

Promotes

Identifies

Competitive

Advantages

Describes

Sales

Tasks

Product

Safety

Packaging

Labeling

Packaging

(14)

8-14

Product - Support Services

•

Step 1. Survey customers to determine

satisfaction with current services and any

desired new services.

•

Step 2. Assess costs of providing desired

services.

•

Step 3. Develop a package of services to delight

customers and yield profits.

•

Step 1. Survey customers to determine

satisfaction with current services and any

desired new services.

•

Step 2. Assess costs of providing desired

services.

•

Step 3. Develop a package of services to delight

customers and yield profits.

Companies should design its support services to

profitably meet the needs of target customers.

(15)

8-15

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

(16)

8-16 8-16

Wid

th -

nu

mb

er

of

diffe

ren

t p

ro

du

ct

lin

es

Wid

th -

nu

mb

er

of

diffe

ren

t p

ro

du

ct

lin

es

Len

gth

-

to

tal

nu

mb

er

of

ite

ms

with

in

th

e l

in

es

Len

gth

-

to

tal

nu

mb

er

of

ite

ms

with

in

th

e li

nes

Dep

th

-

nu

mb

er

of

ver

sio

ns

of

eac

h p

ro

du

ct

Dep

th

-

nu

mb

er

of

ver

sio

ns

of

eac

h p

ro

du

ct

Pro

du

ct

Mix

-

all

th

e p

ro

du

ct

lin

es

off

ere

d

Pro

du

ct

Mix

-

all

th

e p

ro

du

ct

lin

es

offe

red

Product Mix Decisions

(17)

8-17

Int

ang

ibi

lit

y

lit

gibi

tan

In

y

Insep

arabilit

y

ilit

arab

Insep

y

Vari

abili

ty

abili

Vari

ty

Peri

shab

ilit

y

ty

shabili

Peri

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

(18)

8-18 8-18 Sa tis fie d a nd Pro duc tiv e S erv ice Empl oy ee s Sat isf ied and Prod ucti ve S erv ice Empl oy ee s Gre ate r S erv ice Va lu e Gre ate r S erv ice Va lu e

In

tern

al Se

rvi

ce

Qu

ali

ty

ali

Qu

ce

rvi

al Se

tern

In

ty

He alt h S erv ice Pro fit s a nd G rowth He alt h S erv ice Pro fit s a nd G rowth Sa tis fie d and Loy al Cu stom ers Sa tis fie d and Loy al Cu stome rs

The Service-Quality Chain

(19)

8-19

Marketing Strategies for Service

Firms

Marketing Strategies for Service

Firms

•

Managing Service Differentiation

–

Develop offer, delivery and image with competitive

advantages.

•

Managing Service Quality

–

Empower employees

–

Become “Customer obsessed”

–

Develop high service quality standards

–

Watch service performance closely

•

Managing Service Productivity

–

Train current or new employees

–

Increase quantity by decreasing quality

–

Utilize technology

•

Managing Service Differentiation

–

Develop offer, delivery and image with competitive

advantages.

•

Managing Service Quality

–

Empower employees

–

Become “Customer obsessed”

–

Develop high service quality standards

–

Watch service performance closely

•

Managing Service Productivity

–

Train current or new employees

–

Increase quantity by decreasing quality