Setting Product Strategy. 12-2 At the heart of a great brand is a great product.
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Transcript of Setting Product Strategy. 12-2 At the heart of a great brand is a great product.
Setting Product Strategy
12-2
At the heart of a great brand is a great product
12-3
Product
Anything that can be offered to a market to satisfy a want or need.
12-4
Five Hotel (Product) Levels
• Core benefits—rest and sleep
• Basic product—bed, bathroom, towels, desk, dresser, and closet
• Expected product—clean bed, fresh towels, working lamps, relative degree of quiet
• Augmented product—cable TV
• Potential product—high speed internet connection
12-5
Consumer Goods Classification
Convenience
Unsought
Shopping
Specialty
Emergency
12-6
Industrial Goods Classification
Materials and parts
Supplies/
business servicesCapital items
12-7
Product Differentiation
• Product form• Features• Performance• Conformance• Durability• Reliability• Reparability
• Style• Design• Ordering ease• Delivery• Installation• Customer training• Customer consulting• Maintenance
12-8
Product Line Analysis
Convenience
ItemsMonitors, Printers
Core product
Basic computers
Staples
Faster CPUs
SpecialtiesDigital moviemaking
12-9
Line Stretching
Down-Market StretchDown-Market Stretch
Up-Market StretchUp-Market Stretch
Two-Way StretchTwo-Way Stretch
12-10
Line Filling
12-11
Product-Mix Pricing
• Product-line pricing (pricing points)• Optional-feature pricing (electric window controls)• Captive-product pricing (razor and the razor
blades)• Two-part pricing (fixed free plus a variable cost—
telephone minimum plus long distance)• By-product pricing (after mass of product
produced)• Product-bundling pricing (group of products at a
reduced price of products sold separately)
12-12
Product Line Pricing
12-13
Two-Part Pricing
12-14
Co-branding
12-15
Ingredient Branding
12-16
Packaging: The 5th P
All the activities of designing and producingthe container for a product.
12-17
Packaging has been influenced by…
Self-service(supermarkets)
Self-service(supermarkets)
Consumer affluence (willing to pay for convenience)
Consumer affluence (willing to pay for convenience)
Company/brand image(recognition of company or brand)
Company/brand image(recognition of company or brand)
Innovation opportunityInnovation opportunity
12-19
Functions of Labels
Identifies
Grades
Describes
Promotes
12-20
Warranties and Guarantees
Designing and Managing Services
12-23
Service
Any act of performance that oneparty can offer another that is
essentially intangible and does notresult in the ownership of anything;
its production may or may notbe tied to a physical product.
12-24
Service Sectors
Government(courts, hospitals, etc.)
Private
Nonprofit(museums, churches, etc.)
Manufacturing(accountants, legal staff, etc.)
Business(airlines, banks, etc.)
Retail(cashiers, clerks, etc)
12-25
General Motors’ OnStar Service
12-26
Categories of Service Mix
Pure tangible good—soap, saltPure tangible good—soap, salt
Good w/ accompanying services—cars and computers
Good w/ accompanying services—cars and computers
Hybrid--restaurantsHybrid--restaurants
Service w/ accompanying goods—airlines serve food and drinks
Service w/ accompanying goods—airlines serve food and drinks
Pure service—baby sittingPure service—baby sitting
12-27
Service Distinctions
• Equipment-based (vending machines) or people-based (window washing)
• Service processes (fast-food, buffet)
• Client’s presence required (Brain surgery) or not (car repair)
• Personal needs (personal needs) or business needs (business service)
• Objectives (profit or non-profit) and ownership (private or public)
12-28
Continuum of Evaluation for Different Types of Products
12-29
Distinctive Characteristics of Services
Intangibility
Inseparability
Variability
Perishability
12-30
Mayo Clinic’s Tangible Cues
12-31
Blue Man Group includes 33 different performers
12-32
How to Increase Quality Control
Invest in good hiring and training procedures
Monitor customer satisfaction
Standardize the service-performance process
12-33
Matching Demand and SupplyDemand side• Differential pricing
– Shift demand from peak to off-peak
• Nonpeak demand– cultivate
• Complementary services– Cocktail lounges
• Reservation systems– Manage demand levels
Supply side• Part-time employees
– Hired to serve peak demand
• Peak-time efficiency– Perform only essential tasks
during peak periods• Increased consumer
participation– Consumer fill out their own
medical records• Shared services
– Several hospitals can share medical-equipment purchases
• Facilities for future expansion– Buy surrounding land for
later development
12-35
Factors Leading to Customer Switching Behavior
• Pricing—high, increases, unfair, deceptive• Inconvenience—locations/hours• Core Service Failure—billing errors• Service Encounter Failures--unresponsive• Response to Service Failure—negative • Competition—found better service• Ethical Problems—cheat, unsafe• Involuntary Switching—provider closed
12-36
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
12-37
Determinants of Service Quality
Reliability-dependably and accurately
Responsiveness-prompt service
Assurance-trust and confidence
Empathy-caring
Tangibles-appearance
12-38
Best Practices
• Strategic Concept—customer obsessed
• Top-Management Commitment—service quality
• High Standards-reliable• Self-Service Technologies• Monitoring Systems• Satisfying Customer
Complaints• Satisfying Employees
12-39
Customer Importance and Performance Ratings for an Auto Dealership
12-40
Developing Brand Strategies for Services
Choosing Brand Elements—logos, symbols
Establishing Image
Dimensions--associations
Devising Branding
Strategy—price and quality
12-41
Customer Worries
Failure frequency
(reliability)
Downtime
(dependability)
Out-of-pocket costs
(maintenance and repair)
12-42
Marketing Discussion
Colleges and universities can be classified as service organizations.How can you apply the marketing
principles developed in this chapterto your school? Do you have anyadvice as to how it could become
a better service marketer?
