product services place_strategy
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Product services place_strategyTRANSCRIPT
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Product and Services StrategyPlace Strategy
©Copyright 2004, Pearson Education Canada Inc.8-2
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nToday’s Learning Objectives
• Describe the roles of product and service branding, packaging, labelling, and names
• Identify the four characteristics that affect the marketing of a service & discuss the additional marketing considerations that services require
• Identify the typical marketing strategies marketers apply for products in the different stages of the product Life Cycle
©Copyright 2004, Pearson Education Canada Inc.8-3
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n Course completion
• Course contract revision and plan for the rest of the semester
• Instead of Marketing News Presntations – just hand in your article and short write up. Due by week of April 10th. May hand in earlier.
©Copyright 2004, Pearson Education Canada Inc.8-4
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n Market Plan Project – Next Steps
• How is it going ? • At this point you should have done the following:
– Conduct your SWOT as a group– Rethink and finalize your concept/product idea in light
of your research and SWOT & creativity exercises– Set marketing objectives – these are one year
objectives so they need to be SMART– Select your primary and secondary target market –
describe them – their need, characteristics, purchasing/usage habits related to your category
– Develop your market positioning strategy – write a positioning statement
©Copyright 2004, Pearson Education Canada Inc.8-5
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n Marketing Planning
• What is a goal?
• What is an objective?
• What are typical marketing objectives related to?• Marketing objectives can include:
– Sales, profit, market share, ROI– Awareness, trial, purchase, repeat purchase, attitude– Distribution coverage– Marketing promotion efficiency targets, e.g. response
rates
©Copyright 2004, Pearson Education Canada Inc.8-6
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Objective: Statements of desired outcomes resulting from a plan.
Strategies: Outline in broad-strokes how the objectives will be achieved.
Plans: All the specific details needed to execute the strategies.
Objectives, Strategies and Plans
©Copyright 2004, Pearson Education Canada Inc.8-7
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n Example• Objective:
– To obtain 60% market share of the ketchup market in Canada
• Strategies:1. Promotion - By maintaining brand awareness via
year round TV promotion support 2. Product-By launching a new package format3. Distribution -By supporting the retail network with
innovative category management systems
• Plans: for Promotion– ad creative plan, media plan & schedule
©Copyright 2004, Pearson Education Canada Inc.8-8
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n Product
• Evaluate a product in pairs or threes – select one from the box
©Copyright 2004, Pearson Education Canada Inc.8-9
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nLevels of Product
Corebenefit
or service
Augmentedproduct
ActualProduct
(features)
CoreProduct
(benefits)
Installation
Warranty After-sale service
Delivery and credit
Packaging
Brandname
Features
Quality level Design
Figure 8-1
©Copyright 2004, Pearson Education Canada Inc.8-10
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n Exercise on Features and Benefits
• List five features of your product and a corresponding benefit to the consumer of each feature
• A feature is something about the product- it colour, design, materials it is made from etc
• A Benefit is what the product does for the customer
©Copyright 2004, Pearson Education Canada Inc.8-11
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nIndividual Product Decisions
1. Product attribute decisionsProduct quality (level and consistency), features,
style and design2. Product Brand Name Decisions
Brand equity, line and brand extensions, manufacturer’s versus private brands, licensing, co-branding
3. Packaging RolesProtect contents, identify and promote the product
and brand, be a self merchandiserLabelling - Ingredients, directions for use, identify
and promote4. Product support services
Repair and maintenance, accessories
©Copyright 2004, Pearson Education Canada Inc.8-12
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nIndividual Product Decisions (continued)
• What are the purposes of a package?
• Look at your package and discuss at least 3 purposes it serves.
• Is there any competitive advantage in the package you are studying?
©Copyright 2004, Pearson Education Canada Inc.8-13
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nWhat is a Brand?
• A Brand is the use of name, term, symbol, or design or combination of these to identify a product
• Why brand a product or service?– By creating perceived differences among
products and developing a loyal customer franchise through branding, marketers create “ value “
©Copyright 2004, Pearson Education Canada Inc.8-14
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nFour Brand Strategies
LineExtension
-new flavour, size
BrandExtension
-Using the name in a new category
MultibrandsNew
Brands
Existing
New
Brand name
Existing
New
Product category
Figure 8-4
©Copyright 2004, Pearson Education Canada Inc.8-15
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n Brand names should:
• Suggest something about the product• Be easy to pronounce, recognize, and remember• Be distinctive• Be extendable• Translate to other languages• Be capable of registration and legal protection
©Copyright 2004, Pearson Education Canada Inc.8-16
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n Brand Equity
Brand association
Brand loyalty
Brand awareness
Perceived quality
Source: Reprinted with permission of The Free Press, a Division of Simon & Schuster Adult Publishing Group, from Brand Leadership, by David A. Aaker and Erich Joachimsthaler, p. 17. Copyright © 2000 by David A. Aaker andErich Joachimsthaler.
10-11
Brand Equity
©Copyright 2004, Pearson Education Canada Inc.8-17
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nKotler’s 5 Dimensions that make a
strong brand1. Should bring to mind certain attributes such as
product's features or style2. Should suggest one or more benefits e.g. Apple's user
friendliness3. Should be able to visualize the brand’s characteristics
as if the brand were a person. E.g. Apple would be in his 20”s, IBM in his 60’s
4. Should suggest something about a company's values? Is it innovative, a service icon or socially conscious?
5. Suggests a picture of the brands users- are they young and enthusiastic? Are they a family? Are they older and established?
©Copyright 2004, Pearson Education Canada Inc.8-18
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n Brand Loyalty
• Four levels – Unknown (consumers are unaware of it)– Familiarity (recognize name and some image)– Preference (will choose it if it is available)– Insistence (will accept no alternatives and will
search extensively for it)
• What is the other level?
©Copyright 2004, Pearson Education Canada Inc.8-19
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nCharacteristics of Services
IntangibilityCannot be seen, tasted, felt or smelled before
purchasing
VariabilityService quality depends
on who provides and under what conditions
InseparabilityProduction and,
consumption, and from the provider
PerishabilityCannot be stored,
for resale or later use
Figure 8-5
©Copyright 2004, Pearson Education Canada Inc.8-20
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n Westjet
Discuss the marketing strategies that Westjet uses to handle these 4 characteristics of services
– Intangibility– Perishability– Inseparability– Variablility
©Copyright 2004, Pearson Education Canada Inc.8-21
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n3 Main Marketing Tasks for Services
1. Service differentiation – provide value to customers
2. Service quality- internal management philosophy and employee satisfaction
3. Productivity – efficiency and cost effectiveness
©Copyright 2004, Pearson Education Canada Inc.8-22
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n Recommended Reading
• by Harry Beckwith
– “Selling the Invisible”
– “What Clients Love”
• “Raving Fans” – Kenneth Blanchard
©Copyright 2004, Pearson Education Canada Inc.8-23
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n Break
©Copyright 2004, Pearson Education Canada Inc.8-24
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n Why is NPD so important?
– Follow changing market demands
– Remain competitive
– Keep up to changing technology
– Replace dying products
– Diversify product offering to reduce risk
©Copyright 2004, Pearson Education Canada Inc.8-25
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nThe New Product Adoption Process
• Adoption process– The mental process through which an individual passes
from first hearing about an innovation to final adoption– Not all consumers want to risk trying new products when
they are first introduced
• Stages in the process– Awareness– Interest– Evaluation– Trial– Adoption
©Copyright 2004, Pearson Education Canada Inc.8-26
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nNew Product Adoption Rates
Time of adoption of innovations
2.5%
Innovators
34%Early
majority
34%Latemajority
Earlyadopters
13.5%
16%Laggards
Source: reprinted with permission of the Free Press, a Division of Simon & Schuster, from Diffusion of Innovations, Fourth Edition, by E.M. Rugers, 1983.
Figure 6-5
©Copyright 2004, Pearson Education Canada Inc.8-27
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nInfluences on the Rate of Adoption
• Five characteristics influence the rate of adoption of new product innovations:– Relative advantage
• How much better than existing alternatives?
– Compatibility• Fit current values and
experiences?– Complexity
• Ease of understanding?– Divisibility/Trialability
• Can it be tried on a limited basis?– Communicability
• Can the innovation be observed and communicated?
©Copyright 2004, Pearson Education Canada Inc.8-28
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nProduct Life-Cycle Strategies
Profits
Sales
Development Introduction Growth Maturity Decline
SalesProfit
($)
Loss($)
Figure 9-2
©Copyright 2004, Pearson Education Canada Inc.8-29
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nSummary of PLC/Marketing Mix
R & D Introduction Growth Maturity DeclineSales Low Increasing Peaking Declining
Costs High R&D High Average Low Low
Profits Negative Negative Rising High Declining
Customers Innovators Early adopters Middle majority Laggards
Competitors Few Growing Stable number Declining
Marketing Product Maximize Market share Reduce costs
Objectives trial market share and profit milk brand
Product In development Basic Extensions Diversify brand Phase out weak
Price tbd Skimming or Penetrate Be price Cut
penetration market competitive price
Distribution tbd Selective Intensive Increase Reduce outlets
Advertising tbd Educate Awareness Brand Reduce
awareness interest differences and remind
Promotion tbd Heavy to Reduce Increase for Reduce costs
encourage trial heavy consumer brand switching minimum level
Table 9-2
©Copyright 2004, Pearson Education Canada Inc.8-30
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n Product Section of Project Plan
• Product positioning strategy – include a positioning statement
• Core benefit/competitive advantage
• Features – packaging, features, added benefits
• Brand name(s) & rationale