Product and Service Planning

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Product Planning • Product: - Anything a customer gets in an exchange (good, bad)

– Need satisfying offerings (Hallmark)– Can be a good or a service– Services are “products” too

GoodTangibleIn advance PossiblePossible Consistent

Some CharacteristicsNature Production simultaneity Storage/ Perishability TransportQuality/ Heterogeneity

Service (def) deed for anotherIntangible“Close” to the customerImpossibleImpossibleInconsistent

Product Planning • Quality (What does it mean?)

– Product’s ability to satisfy customer’s needs/requirements.

– Consistency (McDonalds and what other companies?)

– Relative quality – similar products against each other What do you think are some What do you think are some quality products? Why?quality products? Why?

Consumer Products

• General classification: what types of customers will use them?

• Businesses B2B or consumers B2C• Consumer products:

• For “final” users• Classifying consumer products

• How consumers shop• How consumers think about them

– Perception usage varies (among food items and what other product categories?)

4 Types of Consumer Products1. Convenience

– Little time/effort; frequent purchase– Intense distribution– Substitutes acceptable– Low price (grocery products)

2. Shopping: time comparing alternatives; less frequent purchase, low loyalty– Homogeneous: seen as same; want bargain – Heterogeneous: seen as different; want quality;

salespeople help desired – Marketing: fewer outlets, higher markups

4 Types of B2C Products, cont.3. Specialty: is shopping an end, pleasurable; willingness

makes it specialty• Planned purchase: strong desire and effort

(collectors); alternatives unacceptable• Amount of search (Beanie Babies; xmas toys)• Limited availability is OK; high markups

4. Unsought (tombstones; towing; dentists)• Only want “in a pinch;” infrequent and no effort; lack

knowledge or desire• Promotion; sales (Dentists for phobic patients)• What are your unsought products? What are your unsought products?

What type of product?

What type of product?

B2B Products

• Businesses (B2B):– Use to make other products– Bought and resold– Used for corporate or organization’s use– Less shopping is involved (vs. B2C)– Classify via:

• How buyers think about the product• What type of customer will use the product• How the product is used

Product Items, Lines, and Mixes

• Item: version of a product (Diet Coke)• Line: group of closely related products (Coca-

Colas soft drinks)• Mix: all the products a company offers (water,

energy drinks, soda)• Modify and reposition (Old Navy)

Should Old Navy Reposition???

Branding – Identify product via letters, terms, designs– Branding strategies:

– Brand name – letters associated with product– Trademark/servicemark – words, symbols for

one firm (legally protected)– Co-brand (apple ipod and coach)– Family – one brand, many products

(Hershey’s, Campbell’s)– Generics – no brand (signal of savings)– Dealer/private label: by store– National/manufacturer: by vendor

Hot or not…What are the most equitable brands?

Equitable Brands

1. Apple2. Blackberry3. Google4. Amazon5. Yahoo6. eBay7. Red Bull8. Starbucks

9. Pixar10. Coach11. Whole Foods12. EA Sports/Games13. MTV14. Samsung15. Victoria’s Secret16. Nike

Branding

• Brand equity: financial value of the brand name– Value (are we just paying for the name?)

• Consumer – familiarity • Seller- be authentic, true to your people

– Less promotion (Reese’s)– Legal protection (Coke; Olympic rings)

Better Branding; Less Promotion

Packaging• Defined as:

– Container or wrapping • Elements:

1. Function (fridgepack; pill bottles)2. Promotion (L’eggs pantyhose; square Chanel)

• Issues: - UPC codes needed

– Information: government guidelines (good or bad??)– Waste (kids lunches)– Size (changing??)

Labeling

• Ethics (size of drink and sodium, calories)• Warrantees• Persuasive labeling (little information; focus on

logo)• Informational labeling (helps your buying

decision; lessens cognitive dissonance)• Your examples of each type of labeling?Your examples of each type of labeling?

Summary

• Global branding issues• Cobranding • Trademarks/service marks• Brand equity• Branding strategies• Product packaging/labeling