3.4 The Product/Service Mix

March 4th, 2010

Retail businesses we shop at are part of the service sector, even though they sell us a tangible product

They do not make the products or add anything to the products they resell

We actually pay for the service they provide

Example: Old Navy Provides variety and

size selection Fitting rooms Return or exchange

policies Different payment

options Convenient locations Old Navy acts as

middleman between consumer and manufacturer

What Services Can They Add?

Buying large appliances Buying a sweatshirt at Christmas time Buying a laptop Buying a suit Buying a book at Chapters Shopping at Ikea

Discussion

Think of a specific business – what services can they add to make it better for those who frequent them?

Example:• Sit down restaurant – kids area

What Products Can They Add?

Sports venues Movie theatres Universities Salons

Activity – In Pairs

1) Name a product that was the leading product in the market until it was surpassed by competition. Why do you think this happened?

2) Make a list of 10 products or services you’ve purchased. Why did you choose them over other alternatives? What was the main competitive advantage?

3.5 The Competitive Market

March 8, 2010

Competitive Market

New products have potential to dislodge existing products. • Why? Limit to the number of consumers who

use a particular product, or brand.

Consists of specific types of products as well as the companies that manufacture these products

Competitive Market

Market Size: Amount of money consumers spend annually on these specific products• Eg. Dragons Den – Underwear Market

Market Share: the % one company’s product takes of the total dollars spent by consumers on products within a specific category

Competitive Market

Market Segment: Categories that marketers break broad segments into• Eg. Sports Drinks

are a segment of the beverage industry. • Gatorade is part of

the sports drinks market category.

Increasing Market Share

Expand the pie? Or take a bigger chunk of the pie?

Difficult to expand the pie• Medical discoveries

cause this to happen

Improving Market Share

Few companies experience more than a 1-2 point increase or decrease in market share in a year.

Small shifts are still important Many factors (eg. Negative publicity or

change in tastes) can affect market share