BRAND MANAGEMENT

ASSIGNMENT

ON

THEODORE LEVITT’S MODEL:

“THE TOTAL PRODUCT CONCEPT”

BY

SYNDICATE 8(Systems & Finance)

SITM, Pune.

BODELE PARAG 09020541015KAUSHAL CHHAYA 09020541017NAVSANGEET KAUR 09020541038PADADE ABHILESH 09020541039SOMTANU SARKAR 09020541048

SHADAB BAIG 09020541129

Introduction:

The most valuable asset in any business organization is the strength of its relationships with its customers. Long-term relationships are the basis for enhanced profitability. Such relationships will, however, only exist as long as the customer perceives there to be superior benefit arising from the arrangement. In today’s market place the customer has become more demanding as expectations for product performance and service provision continue to increase. The power of the brand or corporate image has diminished as sophisticated customers have come to recognize that there is almost always a choice. To win and retain customers requires an understanding of what those customers value and a focus on the processes whereby that value can consistently be delivered. Clearly there is an equation between the value that customers perceive they are getting and the price they are prepared to pay. Hence the challenge is to identify ways in which customer value can be enhanced through marketing strategies that go beyond the traditional focus on brands and images.

The transition from brand value to customer value:

There has been considerable discussion in recent years concerning a purported decline in the strength of brands. Evidence of the growing penetration of private labels and the willingness of customers to select from a portfolio of brands or suppliers adds to the view that the nature of brand loyalty has certainly changed. Whilst there can be no question that strong brands are still a significant asset to a business, whether they are consumer brands or ‘corporate brands’, it seems that in today’s marketing environment there is a need to deliver more than just an image.

Theodore Levitt introduced the idea of the ‘The Total Product Concept’, and this concept still holds good today. Essentially, the notion of the ‘The Total Product Concept’ is that it is not sufficient to focus marketing effort on the tangible product features alone. Product features are quickly imitated or cloned by competitors, and in any case, as Levitt would argue, ‘customers don’t buy products, they buy benefits’. Instead the marketer needs to identify other ways in which value can be delivered to the customer over and above the intrinsic elements embedded in the product itself.

The Total Product Concept:

Theodore Levitt (1980) distinguishes between Generic product, Expected product, Augmented Product and Potential Product.

Generic (Core) Product:

Generic means ‘type’. Generic product is the basic product. This first product level = core product = core benefit. What is the basic requirement of buyer? For example, the core benefit of buying a drill is making holes and the core benefit of a car is transportation.

The Expected Product:

People are not satisfied with the core benefit of a product or service. They expect additional things

This product level comprises all the attributes offered in the actual product. It includes the design of the product, packaging, quality levels, features and brand names. If these features exceed the buyer’s expectations they will be satisfied. For Example, A CD or DVD player is expected to offer a certain quality of sound, a choice of battery, control lights, look sophisticated.

The Augmented Product:

Competition forces firms to offer more than the expected products. The augmented product has to offer additional aspects or elements that support the core and actual product features Customer service, delivery, after-sales service, guarantee. Many products are marketed at augmented product level – USP. The Augmented Products can be augmented by:

Image Assistance Credit Delivery Installation Service Guarantees Example: Dell computers Problem: Today‘s Augmented Products become Tomorrow’s Expected Products

The potential product:

Comprises all the augmentations and transformations a product might undergo in the future. The emphasis is put on future product improvements to keep the product competitive. The marketers must be creative, innovative. The potential product has to include everything that might be done to attract and keep customers.

Essential aspects of a product:

Product benefits: all the elements of an offer which consumers perceive as meeting their needs and wants and provide satisfaction through

Performance and Image Product Attributes: Quality, Features, Styling, Design, Branding, Packaging The Marketing Support Services: After Sales Service, Installation, Delivery,

Guarantee

Example: DELL COMPUTERS

Think about how Dell sells laptop computers—they let customers "build" their own computers on their Web site. By providing an easy way of selecting how much memory or disk space is desired, Dell simplifies a very complex task and provides exactly what the customer requested. Talk about self-segmentation! Dell can reach customers that want a laptop built for games for under $1000—and show them exactly what they are looking for at the moment they want it. The Web is a great way to mask the complexity of a customized manufacturing process.

Dell has one simple concept: to sell computer systems directly to customers. Dell’s customers are global wide and range from individuals, small businesses, large businesses, and institutional organizations, such as schools and hospitals.

The Augmented Product Features of DELL:

Image:

o The study "The 2005 Technology Brand Scorecard," Forrester Research surveyed more than 4,000 U.S. households about 22 technology brands and then used the results to grade each brand on brand trust, brand potential and brand adoption. One of the strongest showings came from computer-maker Dell, which got an overall A-plus.

o What Laptop Awards 2009: Best Gaming Laptop 2009: Alienware M17x :

Best Laptop for Power & Features 2009: Dell Studio XPS 16 Best Ultraportable Laptop 2009: Dell Adamo 2009 Editor’s Choice Award: Dell Studio 15

Product Customization & Segmentation:

Dell has one simple concept: to sell computer systems directly to customers. Dell’s customers are global wide and range from individuals, small businesses, large businesses, and institutional organizations, such as schools and hospitals. Customers can buy the product with features of their own choice. Thus Dell provides a broad range of customized products which tends to higher satisfaction levels of customers.

Dell caters to following market segments with dedicated brands:

o Home & Home Office (Dell Inspiron™, Dell XPS™)o Small & Medium Business (Dell Latitude™)o Large Business (Dell Precision™ Workstations)o Gaming (Dell Alienware™)

Assistance: o Dell Support: Online Support, Live Chat, Community, RSS Feeds, Discussion

Forums, Blogs

Dell Financing Options: o Helps conserve cash flow, Flexibility to acquire new technology at any time, Pay

off your balance at any time, No down payment, initiation fee or annual fee, Make Payments Online, Paperless Statements

Delivery:

Installation:

Dell Installation Services provides the expert knowledge and the resources to get your new systems up and running quickly. Dell Certified Technicians use proven methodologies to minimize installation time. Dell Installation Services include:

o Server Installation Serviceso Switch Installation Serviceso Storage Installation Serviceso Dell Custom Installation Services

Marketing Mix for Dell Computers:

Traditionally, companies rely on marketing to provide information to their target market about their product and possibly attract the market that they are targeting. However, that may not suffice nowadays. Studies have indicated that “functional, process, and relationship benefits” are among the most significant elements needed for marketing superiority in these contemporary times. Basically, being competitively superior depends highly on how well a company manages its marketing mix. The marketing mix is the proverbial four Ps (product, price, place, and promotion) often pointed out in business lectures and organisational studies.

In the context of Dell Inc, their product is predominantly computer-hardware with rather competitive prices as compared with the other top manufacturers and distributors in the industry. In terms of promotional endeavours, Dell Inc has been among the leaders in using contemporary marketing schemes. These promotional activities range from print ads, billboards, television advertisements, Internet advertisement, and even contemporary marketing techniques like sponsorships in professional sports and product placements in television and films. One distinct characteristic of the marketing mix of Dell is its place, or what it is normally referred to as the distribution channels of the company. This appears to be one of the distinguishing factors that put Dell among the top of the computer-hardware food-chain.

Driving Wheel: Promotional Endeavours:

In terms of promotional endeavours, Dell Inc has been among the leaders in using contemporary marketing schemes. These promotional activities range from print ads, billboards, television advertisements, Internet advertisement, and even contemporary marketing techniques like sponsorships in professional sports and product placements in television and films.

Dell advertisements have appeared in several types of media including television, the Internet, magazines, catalogs and newspapers. Some of Dell Inc's marketing strategies include lowering prices at all times of the year, offering free bonus products (such as Dell printers), and offering free shipping in order to encourage more sales and to stave off competitors. In 2006, Dell cut its prices in an effort to maintain its 19.2% market share. However, this also cut profit-margins by more than half, from 8.7 to 4.3 percent. To maintain its

low prices, Dell continues to accept most purchases of its products via the Internet and through the telephone network, and to move its customer-care division to India and El Salvador.

A popular United States television and print ad campaign in the early 2000s featured the actor Ben Curtis playing the part of "Steven", a lightly mischievous blond-haired kid who came to the assistance of bereft computer purchasers. Each television advertisement usually ended with Steven's catch-phrase: "Dude, you're gettin' a Dell!"

A Dell advertising campaign for the XPS line of gaming computers featured in print in the September 2006 issue of Wired. It used as a tagline the common term in Internet and gamer slang: "FTW", meaning "For The Win". However, Dell Inc. soon dropped the campaign.

In the first-person shooter game F.E.A.R. Extraction Point, several computers visible on desks within the game have recognizable Dell XPS model characteristics, sometimes even including the Dell logo on the monitors.

In 2007 Dell switched advertising agencies in the US from BBDO to Mother. In July 2007, Dell released new advertising created by Mother to support the Inspiron and XPS lines. The ads featured music from the Flaming Lips and Devo who re-formed especially to record the song in the ad "Work it Out".

Dell recently began using the slogan "Yours is here" to show that it customizes computers to fit customers' requirements.