Marketing Management Ch 4
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Transcript of Marketing Management Ch 4
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Dr. Karim KobeissiIslamic University of
Lebanon - 2014
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Chapter 4 : he !ro"#ct
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$ h a t i s a ! r o " # c t %
Anything that can be ofered to a market or attention,
acquisition, use, or consumption that might satisy a
want or need.
Includes:
-Goods
- er!ices
- "ersons
- "laces
- #rgani$ations
- Ideas
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&hree 'e!els # "roduct
(.%ore bene)t le!el* thecustomers purchase a
product because o theunctional bene)t theproduct ofers.
+. Actual "roduct le!el* theytake into account how theproducts attributes,eatures, quality, styling,packaging.
. Augmented "roduct le!el*
customers consider the!alue they recei!e rom a!endor ater sales support,warranty, promise o reedeli!ery or installation.
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"roduct as a Good
&oo"sare items that
can be seen and
touched, such as
books, shoes, cars,
and drills.
&oo"s result in
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"roduct as a er!ice
Although ser!ices are /products in a general sense, they
ha!e special characteristics and marketing needs. &he
biggest diferences come rom the act that they are
created through direct interaction with customers.
' ()*+IC) D,)( , *)(UL I ,$)*(I!.
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&he 0ature and %haracteristics o a er!ice
A company must consider our special ser!ice
characteristics when designing marketing
programs:
(1 Intangibility
+1 Inseparability
1 2ariability
31 "erishability
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&he 0ature 4 %haracteristics o a er!ice
1/ (ervice intanibility means that services cannot
be seen taste" felt hear" or smelle" before theyare bo#ht.
5or e6ample, people undergoing cosmetic surgery cannot
see the result beore the purchase. Airline passengersha!e nothing but a ticket and a promise that they andtheir luggage will arri!e saely at the intendeddestination, hopeully at the same time. &o reduceuncertainty, buyers look or 7signals8 o ser!ice quality.
&hey draw conclusions about quality rom the place,people, price, equipment, and communications that theycan see.
&hereore, the ser!ice pro!iders task is to make theser!ice tan ible in one or more wa s and send the ri ht
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)vi"ence anaement at 'tlantis otel- D#bai
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&he 0ature 4 %haracteristics o a er!ice
2/ (ervice inseparability means that services
cannot be separate" from their provi"ers 3hether
the provi"ers are people or machines. I a ser!ice
employee pro!ides the ser!ice, then the employee
becomes a part o the ser!ice. 9ecause the customer is
also present as the ser!ice is produced, provider-
customer interaction is a special eature o ser!ices
marketing.9oth the pro!ider and the customer afect the
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(ervice Inseparability
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&he 0ature 4 %haracteristics o a er!ice
/ (ervice variability means that the 5#ality of
services "epen"s on 3ho provi"es them as 3ell as
3hen 3here an" ho3 they are provi"e".
5or e6ample, some hotelssay, ;arriottha!e
reputations or pro!iding better ser!ice than others. till,
within a gi!en ;arriott hotel, one registration-counter
employee may be cheerul and e!en the quality o a single ;arriott employees
ser!ice !aries according to his or her energy and rame o
mind at the time o each customer encounter.
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(ervice +ariability
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&he 0ature 4 %haracteristics o a er!ice
4/ (ervice perishability means that services cannot
be store" for later sale or #se.
&he perishability o ser!ices is not a problem when demand
is steady. ?owe!er, when demand @uctuates, ser!ice )rms
oten ha!e di
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(ervice !erishability
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&y p e s o " ro d u c t s&he classi)cation o products is essential to
business because it pro!ides one o the actors
or determining the strategies needed to mo!e
them through the marketing system. &he two
ma=or classes are I1 consumer products and II1
business products.
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I. %onsumer "roducts%onsumer products are products purchased or
personal, amily, or household use. &hey are oten
grouped into our subcategories on the basis o
consumer buying habits:
(1 %on!enience products
+1 hopping products
1 pecialty products
31 Bnsought products
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%onsumer "roducts
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II. 9usiness C Industrial "roducts9usiness products are products that companies
purchase to produce their own products or to
operate their business. Bnlike consumerproducts, business products are classi)ed onthe basis o their use rather than customerbuying habits. &hese products are di!ided intosi6 subcategories:
(1 Installations
+1 Accessory >quipment
1 Daw ;aterials
31 %omponent "arts and "rocessed ;aterials
E1 ;aintenance, Depair, and #perating upplies
F1 9usiness er!ices
(1 I ll i
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(1 Installations
Installations are ma=or capital items
that are typically used directly in
the production process o products.
ome installations, such as
con!eyor systems, robotics
equipment, and machine tools, are
designed and built or speciali$ed
situations. #ther installations, such
as stamping machines, large
commercial o!ens, and
computeri$ed a6ial tomography
scan machines, are built to a
standard design but can be
modi)ed to meet indi!idual
requirements.
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+1 Accessory >quipment
"roducts that all into the subcategory
o accessory equipment are less
e6pensi!e and ha!e shorter li!es
than installations. >6amples
include hand tools, computers,
desk calculators, and orklits.
hile some types o accessory
equipment, such as hand tools, are
in!ol!ed directly in the production
process, most are only indirectly
in!ol!ed.
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1 Daw ;aterials
Daw materials are products that are
purchased in their raw state orthe purpose o processing them
into consumer or business
products. >6amples are iron ore,
crude #I', diamonds, copper,timber, wheat, and leather. ome
e.g., wheat1 may be con!erted
directly into another consumer
product cereal1. #thers e.g.,
timber1 may be con!erted into an
intermediate product lumber1 to
be resold or use in another
industry construction1.
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31 %omponent "arts and "rocessed ;aterials
%omponent parts are items that are
purchased to be placed in the )nal
product without urther processing.
"rocessed materials, on the other
hand, require additional processing
beore being placed in the end
product. ;any industries, including
the auto industry, rely hea!ily on
component parts. Automakers use
such component parts as batteries,sunroos, windshields, and spark
plugs. &hey also use se!eral
processed materials, including
steel and upholstery abric.
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E1 ;aintenance, Depair, and #perating upplies
;aintenance, repair, and operating
;D#1 supplies are requently
purchased e6pense items. &hey
contribute indirectly to the
production o the end product or
to the operations o the
business. ;D# supplies include
computer paper, light bulbs,
lubrication oil, cleaning supplies,
and o
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F1 9usiness er!ices
9usiness ser!ices reer to the ser!ices
purchased by companies to assist
in the operation o the )rm. &hey
include )nancial, marketing
research, promotional, legal, and
=anitorial ser!ices. &he decision to
hire an outside business to perorm
needed ser!ices is oten predicated
on how requently the ser!ice is
needed, the speciali$ed knowledge
required, and the relati!e costs o
pro!iding the ser!ice internally
!ersus contracting with an outside
)rm.
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9 di
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9randing
' bran" is a name term sin symbol
"esin or a combination of these
that i"enti6es the pro"#cts or
services of one seller or ro#p of
sellers an" "i7erentiates them from
those of competitors.
A brand name carries many associations in
peoples minds that make up its image.
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!ac8ain
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!ac8ain!ac8ain refers to the activities of "esinin
an" pro"#cin the container or 3rapper for apro"#ct. &raditionally, the primary unction o the
package was to hold and protect the product. In
recent times, howe!er, numerous actors ha!e made
packaging an important marketing tool as well.
Increased competition and clutter on retail store
shel!es means that packages must now perorm
many sales tasksrom attracting attention, to
describing the product, to making the sale.
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'abeling
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'abelingLabels rane from simple tas attache" to
pro"#cts to comple9 raphics that are part
of the pac8ain. &hey perorm se!eral
unctions. At the !ery least, the label identifes
the product or brand. &he label might also help
to promote the brand, support its positioning,
and connect with customers. For many
companies, labels ha!e become an important
element in broader marketing campaigns.
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"roduct - upport er!ices
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"roduct upport er!ices
tep (. ur!ey customers to determine
satisaction with current ser!ices and anydesired new ser!ices.
tep +. Assess costs o pro!iding desired
ser!ices.
tep . He!elop a package o ser!ices todelight customers and yield pro)ts.
Companies should design its support services to profitably
meet the needs of target customers.
How?
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9rand trategy
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9rand trategy
'ine >6tension >6isting brand names e6tended to new orms,
si$es, and @a!ors o an e6isting productcategory.
9rand >6tension
>6isting brand names e6tended to new productcategories.
;ultibrands 0ew brand names introduced in the same
product category. 0ew 9rands
0ew brand names in new product categories.
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Product Line Decisions
Product Line Decisions
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Product Line LengthNumber of Items in the Product Line
Product Line LengthNumber of Items in the Product Line
Product Line DecisionsProduct Line Decisions
StretchingLengthen beyond
current range
illingLengthen within
current range
!ownward
"pward
Product Line Decisions
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Product Line DecisionsA company lengthens its product line in two ways: by line
stretching and line )lling.
Line stretchin occ#rs 3hen a company lenthens its pro"#ct line beyon" its c#rrent
cateory:
a.Do3n-mar8et (tretch: a company positioned in the middle market may want to introduce a
lower price line i.e. ;ercedes successully introduced its %-%lass cars at J.JJJ without in=uring
its ability to sell other ;ercedes cars or (JJ.JJJ and up.
b.Up-mar8et (tretch: a company enters the high social class segment or more market growth,
higher margins, as ull line manuacturers e.g. &oyota 'e6us.
c.3o-3ay (tretch: a company ser!ing the middle market might decide to stretch their line in
both lower and high social class i.e. ?oliday Inn orldwide perormed )!e diferent segments Kthe upscale %rown "la$a, the traditional ?oliday Inn, the budget ?oliday Inn >6press, and the
business-oriented ?oliday Inn elect and ?oliday Inn uites
. Line 6llin occ#rs 3hen a company a""s more items 3ithin the present cateory. &he
moti!es are to o!ercome the missing items in the line, reach the incremental pro)ts, utili$e
e6cess capacity, plug holes to keep out competitors.
Hown market tretch
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Hown-market tretch:;ercedes
(- Class C - Class
?ead 4 houlders 'ine 5illing
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?ead 4 houlders 'ine 5illing
"roduct ;i6 4 "roduct 'ine
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"roduct ;i6 4 "roduct 'ine
!ro"#ct i9: All the products a gi!en
company produces orm the product mi6.
!ro"#ct Line : A product line would be a
group o these products associated by
category or unction1. A company could
ha!e one line or se!eral lines, but all the
products within this line or lines would
orm the "roduct ;i6.
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"roduct 'ine Hepth 4 "roduct ;i6 idth
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"roduct 'ine Hepth 4 "roduct ;i6 idth
!ro"#ct Line Depth: the number o
products items in a speci)c product line.
!ro"#ct i9 $i"th: &he number o
product lines an organi$ation ofers.
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ene6ts of Increasin !ro"#ct i9 $i"th
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ene6ts of Increasin !ro"#ct i9 $i"th