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1 Chapter 8 Product and Services Strategy Slide 2 2 What is a Product? Product A Product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need. Includes: Physical Objects Services Events Persons Places Organizations Ideas Combinations of the above Slide 3 3 What is a Service? Service A Service is a form of product that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. Examples include: Banking Hotels Tax Preparation Home Repair Services Slide 4 4 Products, Services, and Experiences Pure Tangible Good Pure Service Soap Tangible Good With Accompanying Services Auto With Accompanying Repair Services Hybrid Offer Restaurant Service With Accompanying Minor Goods Airline Trip With Accompanying Snacks Doctors Exam Slide 5 5 Brand Name Quality Level Packaging Design Features Delivery & Credit Installation Warranty After- Sale Service Core Benefit or Service Core Benefit or Service Actual Product Core Product Augmented Product Levels of Product (Fig. 8.1) Slide 6 6 Unsought Products New innovations Products consumers dont want to think about these products Require much advertising & personal selling i.e Life insurance, blood donation Product Classifications Consumer Products Specialty Products Special purchase efforts High price Unique characteristics Brand identification Few purchase locations i.e Lamborghini, Rolex Shopping Products Buy less frequently Higher price Fewer purchase locations Comparison shop i.e Clothing, cars, appliances Convenience Products Buy frequently & immediately Low priced Mass advertising Many purchase locations i.e Candy, newspapers Slide 7 7 Supplies and Services Supplies and Services Materials and Parts Materials and Parts Capital Items Capital Items Product Classifications Industrial Products Slide 8 8 Product Classifications Other Marketable Entities Activities undertaken to create, maintain, or change the attitudes and behavior toward the following: Organizations - Profit (businesses) and nonprofit (schools and churches). Persons Politicians, entertainers, sports figures, doctors and lawyers. Places - Business sites and tourism. Ideas (social ideas marketing) public health campaigns, environmental campaigns, and others such as family planning, or human rights. Slide 9 9 Individual Product Decisions (Fig. 8.2) Product Attributes Branding Packaging Labeling Product Support Services Slide 10 10 Product Quality Product Features Product Style & Design Product Style & Design Ability of a Product to Perform Its Functions; Includes Level & Consistency Help to Differentiate the Product from Those of the Competition Process of Designing a Products Style & Function Developing a Product or Service Involves Defining the Benefits that it Will Offer Such as: Product Attributes Slide 11 11 Advantages of Brand Names Brand Equity Advantages of Brand Names Brand Equity Strong Brand Association Strong Brand Association Attributes Quality & Value Consistency Identification Perceived Quality Name Awareness High Brand Loyalty High Brand Loyalty Branding Slide 12 12 Brand Strategy Line Extensions Brand Extensions Multibrands New Brands Brand Strategy Line Extensions Brand Extensions Multibrands New Brands Brand Sponsor Manufacturers Brand Private Brand Licensed Brand Co-branding Brand Sponsor Manufacturers Brand Private Brand Licensed Brand Co-branding Brand Name Selection Selection Protection Brand Name Selection Selection Protection Major Branding Decisions (Fig. 8.3) Slide 13 13 Line Extension Dannon Yogurt Flavors Multibrands Seiko Lasalle & Pulsar Brand Extension Barbie Electronics New Brands Windex (by acquisition) Brand Name ExistingNew Product Category Existing New Four Brand Strategies (Fig. 8.4) Slide 14 14 Brand Strategy Line Extension Existing brand names extended to new forms, sizes, and flavors of an existing product category. Brand Extension Existing brand names extended to new or modified product categories. Multibrands New brand names introduced in the same product category. New Brands New brand names in new product categories. Slide 15 15 Packaging Activity of designing and producing the container or wrapper for a product. Packaging used to just contain and protect the product. Packing now has promotional value and marketers should: Establish a packaging concept, Develop specific elements of the package, Tie together elements to support the positioning and marketing strategy. Slide 16 16 Labeling Printed information appearing on or with the package. Performs several functions: Identifies product or brand Describes several things about the product Promotes the product through attractive graphics. Slide 17 17 Product - Support Services Companies should design its support services to profitably meet the needs of target customers and gain competitive advantage. How? 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. Slide 18 18 Stretching Lengthen beyond current range Product Line Length Number of Items in the Product Line Product Line Length Number of Items in the Product Line Two-Way Downward Upward Filling Lengthen within current range Product Line Decisions Slide 19 19 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 Consistency Product Mix Decisions Slide 20 20 Intangibility Inseparability Variability Perishability Cant be seen, tasted, felt, heard, or smelled before purchase. 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. Nature and Characteristic of a Service Slide 21 21 Satisfied and Loyal Customers Satisfied and Loyal Customers Greater Service Value Greater Service Value Healthy Service Profits and Growth Healthy Service Profits and Growth Satisfied and Productive Service Employees Satisfied and Productive Service Employees Internal Service Quality Internal Service Quality The Service-Profit Chain Slide 22 22 Marketing Strategies for Service Firms Managing Service Differentiation Develop differentiated offer, delivery and image. Managing Service Quality Empower front-line employees, Become Customer obsessed, Develop high service quality standards, Watch service performance closely. Managing Service Productivity Train current or new employees better, Work on quality as well as quantity, Utilize technology. Slide 23 23 Decide Which Products & Services to Introduce Decide How Much to Standardize or Adapt Packaging Presents New Challenges Service Marketers Face Special Challenges Trend Toward Global Service Companies Will Continue International Product and Services Marketing