chapter 12&13 mm
TRANSCRIPT
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Setting Product Strategy
Marketing Management, 13th ed
12
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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 12-2
What is a Product?
A product is anything that can be
offered to a market to satisfy a want or
need, including physical goods,services, experiences, events, persons,
places, properties, organizations,
information, and ideas.
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Figure 12.2 Five Product Levels
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Five Product Levels
Core Components :benefit
Basic product
Expected product : Features
Augmented product : Services
Potential product:
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Product Classification Schemes
Durability
Tangibility
Use
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Durability and Tangibility
Nondurable goods: Intangible goods
consumed in one or few use
Durable goods: Intangible goods thatnormally survive many uses
Services: Are Intangible ,variable,
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Consumer Goods Classification
Convenience
Shopping
Specialty Unsought
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Industrial Goods Classification
Materials and parts
Capital items
Supplies/business services
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Product Differentiation
Product form: size ,color or structure Features
Customization
Performance: levels , low, average , high or superior
Conformance: degree to which the product meets thepromised specifications
Durability: operating life
Reliability; probability of fail in specified time period
Reparability: ease or difficult of fixing a product when itfails
Style: product look and feel to buyer
Design : totality of features that affect how the productlooks
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Service Differentiation
Ordering ease; place an order
Delivery: Time to receive product
Installation: work done to operate product
Customer training
Customer consulting: Data , information
Maintenance and repair
Returns
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7-Levels of Product Hierarchy
Product needto satisfy a need e.g. feet protection
Brand (product family)a name representing a
product or line e.g. Nike
Product classa family of products having similar
function e.g. all shoes
Product linea group of products with closely related
functions e.g. sports shoes
Product typeproducts within a line having similar
form e.g. basket-ball shoes
Item (Stock Keeping Unit)a unit item e.g. one pair
of Nike basket-ball shoe
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The Product Hierarchy
Need family
Product family
Product class
Product line
Product type
Item
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Product Systems and Mixes
Product system: group diverse but related items
Product mix
Product assortment called product mix
Depth: total number of products in Product line
Length : total number of products in product mix
Width: how many different product line
Consistency: how closely the product line are in end use
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Product-MixWidth and Product-Line Length for Proctor&
Gamble Products
PRODUCT-
LINE
LENGTH
Product-Mix Width
Detergents Toothpaste
Disposable
Bar Soap Diapers
Paper
Tissue
Ivory
Snow
(1930)
Dreft
(1933)
Tide
(1946)
Cheer
(1950)
Gleem (1952)
Crest (1955)
Ivory
(1879)
Kirks
(1885)
Lava
(1893)
Camay
(1926)
Pampers
(1961)
Luvs
(1976)
Charmin
(1928)
Puffs
(1960)
Banner
(1982)
Summit
(1992)
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Product Line Analysis
Core product; Basic laptop that produce high
sales
Staples: item lower sales such as memories
no promotion but yields to high profits
Specialties: low sale but that might highly
promoted , on site training , insulation
Convenience items sell in high volumecarrying case and other accessories
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Figure 12.4 Product Map
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Product Line Stretching
Downward stretch by introducing lower range ofthe products e.g. In 1989 the Shangri-La, a chain of deluxe hotels and
resorts in Asia established the Traders Hotels, a sisterbrand to deliver high value, mid-range, qualityaccommodation to the business traveler
Mercedes introduced the baby Merz to cater to theupper class mid-sized range of the market
Upward stretch by entering the high end of themarket e.g. Toyota introduced the Lexus and Nissan introduced the
Infiniti
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Product Line Stretching(contd)
Two-way stretch by filling the whole
line e.g.
Toyota has the Starlet at the lower end;
the Corolla in the executive range; the
Camry in the upper-management range
and the Lexus in the luxury range
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What is the Fifth P?
Packaging, sometimes called the
5th P, is all the activities of
designing and producing the
container for a product.
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Factors Contributing to the
Emphasis on Packaging
Self-service sales
Consumer affluence pay more for attracting
appearance Company/brand image
Innovation opportunity ; a large benifits
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Packaging Objectives
Identify the brand
Convey descriptive and persuasive
information Facilitate product transportation and
protection
Assist at-home storage Aid product consumption
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Designing and
Managing Services
Marketing Management, 13th ed
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What is a Service?
A service is any act of performance
that one party can offer another that is
essentially intangible and does not
result in the ownership of anything; its
production may or may not be tied to a
physical product.
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Service Sectors
Government
Private nonprofit: museum and charities
Business: Banks Manufacturing: legal staff
Retail: customer services
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Categories of Service Mix
Pure tangible good : consumer
products
Good with accompanying services:Computers
Hybrid: Restaurants
Service with accompany goods: Airline Pure service: massage,babysitting
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Service Distinctions
Equipment-based or people-based
Service processes: deliver it
Clients presence required or not:surgery or care repair
Personal needs or business needs
Objectives and ownership: Profit ornonprofit
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Distinctive Characteristics
of Services
Intangibility
Inseparability
Variability
Perishability
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Physical Evidence and Presentation
Place
People
Equipment
Communication material
Symbols
Price
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How to Increase Quality Control
Invest in good hiring and training
procedures
Standardize the service-performanceprocess
Monitor customer satisfaction
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Matching Demand and Supply
Demand side
Differential pricing: air
line season
Nonpeak demand :
Restaurants offers
Complementary
services: Automatedmachine
Reservation systems
Supply side
Part-time employees
Peak-time efficiency
Increased consumerparticipation: bag their
products
Shared services: Expensive
equipment ,hospital Facilities for future expansion
buy surround land
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Improving Service Quality
Listening
Reliability :quality
Basic service
Service design:
arrange information's
Recovery: solve
problems
Surprising customers;
in meeting
Fair play: to customers
& employees
Teamwork
Employee research:
conduct a research Servant leadership
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Figure 13.5 Three Types of Marketing
in Service Industries
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Table 13.1 Factors Leading to
Customer Switching Behavior
Pricing: high
Inconvenience; location
Core Service Failure: bill mistake
Service Encounter Failures: impolite
Response to Service Failure: No
response
Competition: found better service Ethical Problems; cheat
Involuntary Switching: customer moved
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Gaps that Cause Unsuccessful
Service Delivery
Gap between consumer expectation andmanagement perception
Gap between management perception and
service-quality specifications Gap between service-quality specifications
and service delivery
Gap between service delivery and external
communications Gap between perceived service and
expected service
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Figure 13.6 Service-Quality Model
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Determinants of Service Quality
Reliability: performed promise service
Responsiveness: willing to help
Assurance: self confidence ofinformation's
Empathy: caring and attention to
customers Tangibles: equipment
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Table 13.4 Top Customer
Service Providers
USAA
Four Seasons
Hotels
Cadillac
Nordstrom
Wegman Food
Markets Edward Jones
Lexus
UPS
Enterprise Rent-a-
Car
Starbucks
Ritz-Carlton
Amica Insurance Southwest Airlines