setting product strategy. 12-2 at the heart of a great brand is a great product
TRANSCRIPT
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Setting Product Strategy
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12-2
At the heart of a great brand is a great product
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Product
Anything that can be offered to a market to satisfy a want or need.
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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
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12-5
Consumer Goods Classification
Convenience
Unsought
Shopping
Specialty
Emergency
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12-6
Industrial Goods Classification
Materials and parts
Supplies/
business servicesCapital items
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Product Differentiation
• Product form• Features• Performance• Conformance• Durability• Reliability• Reparability
• Style• Design• Ordering ease• Delivery• Installation• Customer training• Customer consulting• Maintenance
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12-8
Product Line Analysis
Convenience
ItemsMonitors, Printers
Core product
Basic computers
Staples
Faster CPUs
SpecialtiesDigital moviemaking
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12-9
Line Stretching
Down-Market StretchDown-Market Stretch
Up-Market StretchUp-Market Stretch
Two-Way StretchTwo-Way Stretch
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12-10
Line Filling
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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)
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Product Line Pricing
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Two-Part Pricing
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12-14
Co-branding
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12-15
Ingredient Branding
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Packaging: The 5th P
All the activities of designing and producingthe container for a product.
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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
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Functions of Labels
Identifies
Grades
Describes
Promotes
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12-20
Warranties and Guarantees
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Designing and Managing Services
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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.
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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)
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12-25
General Motors’ OnStar Service
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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
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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)
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Continuum of Evaluation for Different Types of Products
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Distinctive Characteristics of Services
Intangibility
Inseparability
Variability
Perishability
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12-30
Mayo Clinic’s Tangible Cues
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12-31
Blue Man Group includes 33 different performers
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How to Increase Quality Control
Invest in good hiring and training procedures
Monitor customer satisfaction
Standardize the service-performance process
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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
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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
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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
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Determinants of Service Quality
Reliability-dependably and accurately
Responsiveness-prompt service
Assurance-trust and confidence
Empathy-caring
Tangibles-appearance
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Best Practices
• Strategic Concept—customer obsessed
• Top-Management Commitment—service quality
• High Standards-reliable• Self-Service Technologies• Monitoring Systems• Satisfying Customer
Complaints• Satisfying Employees
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Customer Importance and Performance Ratings for an Auto Dealership
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12-40
Developing Brand Strategies for Services
Choosing Brand Elements—logos, symbols
Establishing Image
Dimensions--associations
Devising Branding
Strategy—price and quality
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12-41
Customer Worries
Failure frequency
(reliability)
Downtime
(dependability)
Out-of-pocket costs
(maintenance and repair)
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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?