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Transcript of Chapter12 buerano
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Setting Product Strategy
Chapter 12
The 4iApproach
In Action
Karla Kristine F. Buerano
Ateneo School of Medicine and Public Health
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Outline
• Characteristics of products • How to differentiate• Importance of product design• Management of product mix and
product lines• Combining Products• Packaging as a marketing tool
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Concept 1
Product characteristics and classification
Core Benefit - Kotler: Hotel – rest Local: Beach – relaxation Medical: Hospital - cure
Product• Anything
that can be offered to a market to satisfy a want or need
Core Benefit
Basic Product
Expected Product
Augmented Product
Potential Product
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Consumer goods: Staples goods
Kotler: Ritz crackers
Local: Skyflakes
RP medical application:Decolgen
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Concept 3
Services Differentiation (p.330)
Kotler: Rolls-Royce PLC – aircraft engines
Local: LBC – easier accessibility
RP medical application:Medical City – focused on patient partnership
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Concept 4
Design – potent way to differentiate and position a company’s product (p.332)
Kotler: Whirlpool
Local: Mandaue Foam
RP medical application: Primary Care – affordable and quality health services
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Concept 5
Service Differentiation: Customer Training (p.331)
Kotler: McDonald’s – training
Local: Mang Inasal
RP medical application:Basic Life Support Training
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Concept 6
Service Differentiation: Maintenance and Repair (p.354)
Kotler: HP
Local: Abenson
RP medical application: Consultations with doctor post-surgery
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Concept 7
Product Systems and Mixes (p.336)
Kotler: Michelin: tires, maps, restaurant-rating
Local: PLDT: wifi, phoneline, video monitoring
RP medical application:Parañaque Doctors: diagnostics, surgery, OPD
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Concept 8
Down Market Stretch (p.340)
Kotler: Kodak – Kodak Funtime
Local: Coke Phils. – RC Cola
RP medical application:Primary Care – Clinic ng Bayan
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Concept 9
Captive-Product Pricing (p.343)
Kotler: AT&T with free cellular phonesLocal: Globe with free cellular phones with
a 2 year planRP medical applications: Clinic ng bayan’s health card with free
consultations exclusive of diagnostics
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Concept 10
Co-branding (p.344)
Kotler: Apple, IBM, and MotorolaLocal: Red Ribbon, Chowking, JollibeeRP medical applications:• Paranaque Doctors and Metro South
Hospital
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Setting Product Strategy
Karla Kristine F. Buerano Chapter 12MD 12-0130
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Outline
• Characteristics of products • How to differentiate• Importance of product design• Management of product mix and
product lines• Combining Products• Packaging as a marketing tool
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Product characteristics and classifications
Product• Anything that
can be offered to a market to satisfy a want or need
Core Benefit
Basic Product
Expected Product
Augmented Product
Potential Product
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Product Classifications
– Durability– Tangibility– Use: Consumer goods and Industrial
goods
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Consumer Goods and Industrial Goods
• Consumer– Convenience goods: Staples, impulse goods, emergency
goods– Shopping goods– Specialty goods– Unsought goods
• Industrial– Materials and parts– Capital items– Supplies– Business services
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Product
• Form – size, shape, and physical structure• Feature • Customization• Performance Quality – low, average, high, or
superior• Durability – measure of expected operating life• Reliability – measure of probability a product
will not malfunction• Repairability – ease of fixing a product• Style – product’s look and feel to the buyer
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Services
• Ordering ease• Delivery• Installation• Customer Training• Customer Consulting• Maintenance and Repair
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Design
• Totality features that affect how a product looks, feels, and functions to a consumer
• Offers functional and aesthetic benefits
Focus on:
Form and feature development
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Product Hierarchy
• Levels– Need family – core need– Product family – satisfies a core need– Product class – “product category”– Product line – products with a similar function– Product type – group of products which share
several forms of the product– Item – distinguishable distinct product line
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Product Systems and Mixes
• Product system – diverse but related items that function in a compatible manner
• Product Mix – set of all products and items offered for sale– Has various product lines– Four dimensions:
• Width – how many different product lines carried• Length – total number of items in the mix• Depth – numbers of variants of each product• Consistency – how closely related the product lines are
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Product line analysis
• Need to know the sales and profits of each product line to determine which items to build, maintain, harvest, or divest.
• Need to know market profile (how line is positioned against competitor’s lines)– Product map – shows which competitors’ items are
competing against the company’s items
• Provides information on two key decision areas – product line length and product mix pricing
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Product line length
• Line stretching– Down-Market Stretch
• Company in the middle market may want to introduce a lower-priced line
– Up-Market Stretch• Company may wish to enter the high end of the market
to achieve more growth
– Two-way Stretch• Company in the middle market may choose to stretch
both ways
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Product Mix Pricing
• Product line pricing• Optional-feature pricing• Captive-product pricing• Two-part pricing• By-product pricing• Product-bundling pricing
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Co-branding and ingredient branding
• Co-branding• Ingredient branding