12 Setting Product Strategy Marketing Management, 13 ed

12
Setting Product Strategy
Marketing Management, 13th ed
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.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-2
Figure 12.2 Five Product Levels
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-3
Five Product Levels
•
•
•
•
•
Core Components :benefit
Basic product
Expected product : Features
Augmented product : Services
Potential product:
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-4
Product Classification Schemes
• Durability
• Tangibility
• Use
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-5
Durability and Tangibility
• Nondurable goods: Intangible goods
consumed in one or few use
• Durable goods: Intangible goods that
normally survive many uses
• Services: Are Intangible ,variable,
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-6
Consumer Goods Classification
•
•
•
•
Convenience
Shopping
Specialty
Unsought
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-7
Industrial Goods Classification
• Materials and parts
• Capital items
• Supplies/business services
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-8
Product Differentiation
•
•
•
•
•
•
•
•
•
•
Product form: size ,color or structure
Features
Customization
Performance: levels , low, average , high or superior
Conformance: degree to which the product meets the
promised specifications
Durability: operating life
Reliability; probability of fail in specified time period
Reparability: ease or difficult of fixing a product when it
fails
Style: product look and feel to buyer
Design : totality of features that affect how the product
looks
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-9
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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-10
7-Levels of Product Hierarchy
• Product need—to satisfy a need e.g. feet protection
• Brand (product family)—a name representing a
product or line e.g. Nike
• Product class—a family of products having similar
function e.g. all shoes
• Product line—a group of products with closely related
functions e.g. sports shoes
• Product type—products 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
11
The Product Hierarchy
Item
Product type
Product line
Product class
Product family
Need family
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-12
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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-13
Product-Mix Width and Product-Line Length for
Gamble Products
Proctor&
Product-Mix Width
Detergents
Toothpaste
Ivory
Snow
(1930)
Gleem (1952)
PRODUCTDreft
LINE
(1933)
LENGTH
Tide
(1946)
Cheer
(1950)
Disposable
Bar Soap
Diapers
Paper
Tissue
Ivory
(1879)
Pampers
(1961)
Charmin
(1928)
Kirk’s
(1885)
Luvs
(1976)
Puffs
(1960)
Crest (1955)
Lava
(1893)
Banner
(1982)
Camay
(1926)
Summit
(1992)
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-14
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 volume
carrying case and other accessories
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-15
Figure 12.4 Product Map
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-16
Product Line Stretching
• Downward stretch by introducing lower range of
the products e.g.
• In 1989 the Shangri-La, a chain of deluxe hotels and
resorts in Asia established the Traders Hotels, a sister
brand to deliver high value, mid-range, quality
accommodation to the business traveler
• Mercedes introduced the “baby Merz” to cater to the
upper class mid-sized range of the market
• Upward stretch by entering the high end of the
market e.g.
• Toyota introduced the Lexus and Nissan introduced the
Infiniti
17
Product Line Stretching(cont’d)
• 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
18
What is the Fifth P?
Packaging, sometimes called the
5th P, is all the activities of
designing and producing the
container for a product.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-19
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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-20
Packaging Objectives
• Identify the brand
• Convey descriptive and persuasive
information
• Facilitate product transportation and
protection
• Assist at-home storage
• Aid product consumption
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
12-21
13
Designing and
Managing Services
Marketing Management, 13th ed
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.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-23
Service Sectors
•
•
•
•
•
Government
Private nonprofit: museum and charities
Business: Banks
Manufacturing: legal staff
Retail: customer services
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-24
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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-25
Service Distinctions
• Equipment-based or people-based
• Service processes: deliver it
• Client’s presence required or not:
surgery or care repair
• Personal needs or business needs
• Objectives and ownership: Profit or
nonprofit
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-26
Distinctive Characteristics
of Services
Intangibility
Inseparability
Variability
Perishability
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-27
Physical Evidence and Presentation
Place
People
Equipment
Communication material
Symbols
Price
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-28
How to Increase Quality Control
• Invest in good hiring and training
procedures
• Standardize the service-performance
process
• Monitor customer satisfaction
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-29
Matching Demand and Supply
Demand side
• Differential pricing: air
line season
• Nonpeak demand :
Restaurants offers
• Complementary
services: Automated
machine
• Reservation systems
Supply side
• Part-time employees
• Peak-time efficiency
• Increased consumer
participation: bag their
products
• Shared services: Expensive
equipment ,hospital
• Facilities for future expansion
buy surround land
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-30
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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-31
Figure 13.5 Three Types of Marketing
in Service Industries
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-32
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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-33
Gaps that Cause Unsuccessful
Service Delivery
• Gap between consumer expectation and
management 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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-34
Figure 13.6 Service-Quality Model
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-35
Determinants of Service Quality
• Reliability: performed promise service
• Responsiveness: willing to help
• Assurance: self confidence of
information's
• Empathy: caring and attention to
customers
• Tangibles: equipment
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-36
Table 13.4 Top Customer
Service Providers
• USAA
• Four Seasons
Hotels
• Cadillac
• Nordstrom
• Wegman Food
Markets
• Edward Jones
• Lexus
• UPS
• Enterprise Rent-aCar
• Starbucks
• Ritz-Carlton
• Amica Insurance
• Southwest Airlines
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
13-37