june 13, 2015product and services strategies 1 products and services based on marketing: an...

April 18, 2023 Product and Services Strategies1

Products and Services

Based onMarketing: An Introduction, 6th edition by Philip Kotler & Gary Armstrong


Product

Something that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or a need.


Product


Three levels of product


Core, Actual and Augmented Product

Customers perceive the Sony camcorder as a complex bundle of tangible and intangible features and services that deliver a core benefit - A convenient, high-quality way to capture important moments.


Product Classifications

Consumer Products

Industrial Products


Consumer Products

Products bought by final consumers for personal consumption


Consumer Products


Industrial Products

Products bought by individuals and organizations for further processing or for use in conducting business.


Industrial Products

Materials and parts Capital items Supplies and services.


Individual Product Decisions

P rod u c t A ttrib u tes B ran d in g P ackag in g L ab e lin g P rod u c t-S u p p ort se rvices

Individual P roduct D ec is ions


Product Attributes

Product Quality Product Features Product Design


Product Quality

Two dimensions:PerformanceConformance

– In performance terms:Rolls-Royce is better than FordRolex is better than Timex

– In conformance terms:Rolls-Royce quality is as consistent as Ford qualityRolex quality is as consistent as Timex quality


Product Quality for Motorola

“Quality means the world to us”

TQM - Total quality management

Improve customer value


Product Features

Stripped down Added features

Feature value to customer vs.Feature cost to the company


Product Style and Design

Style + Performance Bose, B&O, Braun


Brand

A name, term, sign, symbol, or design, or combination of these, intended to identify the goods or services of one seller or group of sellers and differentiate them from those of its competitors

Nike, Philips


Powerful Brand Names


Branding

B ran d E q u ity B ran d N am e S e lec tion

M an u fac tu re r's P riva te L icen s in g C o - B ran d in g

B ran d S p on sor

B ran d in g


Brand Equity

The value of a brand based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations, and other assets such as patents, trademarks and channel relationships.

IBM $17 bn, Coca-cola $39 bnMarlboro$39 bn, Kodak $12 bn


Brand Name Selection

Brand Name should: Suggest something about the product benefits

and qualities: Duracell Be easy to pronounce, recognize, and

remember: TIDE Be distinctive: Kodak, Shell


Brand Name should: ‘work’ in languages used in target markets Be ‘registerable’

Brand Name Selection


Brand Owner (or Sponsor)

Manufacturer’ BrandBrand created and owned by the producer of a product or a service.Ex: IBM, KelloggManufactures have to pay Slotting fees

Private Brand or (middleman, distributor or store brand)Brand created and owned by a reseller of a product or service.Ex: Continente, Pingo Doce


Licensing

Looney Tunes generates more than $1 bn annually


Co- Branding

The practice of using established brand names belonging to different companies on the same productPhilips & Whirlpool,Credit card issued by Ordem dos Engenheiros & American Express


Brand Strategy

L in e E xten s ion B ran d E xten s ion M u ltib ran d s N ew B ran d

B ran d S tra teg y


Line Extension

Using a successful brand name to introduce additional items in a given product category under the same brand name Classic vs. Diet CokeDanone vs. Corpos Danone


Brand Extensions

Using a successful brand name to launch a new or modified product in a new category.Honda motorbikes, cars, and outboard engines (for boats)


Multibrands

A strategy under which a seller develops two or more brands in the same product category:Philips & AristonToyota & LexusVW & Skoda


New brands

The same manufacturer but different brands for different products:Philips & Signaal (for defense)


Packaging

Includes design and production of:– Primary container– Secondary container– Shipping container


Packaging

Packaging supports sales by:– Attracting buyer’s attention– Promoting the product– Describing the product

(legal requirements)


Packaging concept or strategy

Packaging strategy states: What the package should be, or What the package should do for the product.

Decisions must be made on specific aspects, including size, shape, materials, color, text and brand name.

Must be consistent with the product advertising, pricing and distribution.


Labeling

Identifies brand:Sunkist oranges

Identifies grade Describes benefits Uses attractive graphics


Labeling

Checklist for essential information: Unit price Use-by date Nutritional value Low fat, light, high fiber

Often regulated by law


Product-Support Services

Services that augment actual products

More and more companies use product-support services as a major tool in gaining competitive advantage.

An active customer service department creates customer satisfaction and loyalty and helps the company find ways to distinguish itself from competitors.



Whirlpool, Procter& Gamble use 1-800 numbers

Cadillac holds regular focus-group interviews with owners.



Estimate the cost and the benefit of product-support services


Product Line Decisions

A group of products that are closely related because they function in a similar manner, are sold to the same customer groups and marketed through the same type of outlets, or fall within given price ranges.


Product Line Length

Number of items in the product line.

Companies looking for high market share and growth usually carry longer lines.

Companies looking for short-term profit generally carry shorter lines of selected items.


Increasing Product Line Length

Stretching. Downward or upward

Xerox stretched downwards with the small copier.

Filling.

Solar-powered Sony Walkman line


Product Mix Decisions

The set of all product lines and items that a particular seller offers for sale to buyers.


Product Mix Selected From P&G



Line Width Number of different product lines

Line lengthTotal number of items that the company carries



Line consistencyHow closely related the various product lines are in end use, production requirements, distribution channels, etc.

Line depthNumber of versions of each product. Example: Crest comes in three sizes and two formulations

june 13, 2015product and services strategies 1 products and services based on marketing: an...

Documents

services strategies

levels of product slide

product style

augmented product customers

timex quality slide

braun slide

branding slide

philips slide