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 services Capital 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 Items Monitors, Printers Core product Basic computers Staples Faster CPUs Specialties Digital moviemaking
12-9 Line Stretching Down-Market Stretch Up-Market Stretch Two-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 5 th P All the activities of designing and producing the container for a product.
12-17 Packaging has been influenced by… Self-service (supermarkets) Self-service (supermarkets) Consumer affluence (willing to pay for convenience) Company/brand image (recognition of company or brand) Company/brand image (recognition of company or brand) Innovation opportunity
12-18 Innovations in Packaging
12-19 Functions of Labels Identifies Grades Describes Promotes
12-20 Warranties and Guarantees
Designing and Managing Services
12-22 IBM has moved from a goods business to a service business
12-23 Service Any act of performance that one party can offer another that is essentially intangible and does not result in the ownership of anything; its production may or may not be 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, salt Good w/ accompanying services— cars and computers Hybrid--restaurants Service w/ accompanying goods— airlines serve food and drinks Pure 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 Supply Demand 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
12-34 Consumer-Friendly Services
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 chapter to your school? Do you have any advice as to how it could become a better service marketer?