1. Marketing II / Session 1 16.03.2016 Martin Samek martin.samek@lbs.ac.at

2. Lauder Business School Spring Term 2016 Written final exam in Session 12; 90 Minutes, open-ended questions, 40% contribution to final grade Two written (groups of two) assignments until: Session 8; Session 13; 30% contribution per assignment Groups of two students each need to discuss in form of an essay a given question per assignment. Assignment a) Product and Price Assignment b) Place and Promotion Each essay needs to be structured in introduction, main text and conclusion (a deeper structure/chapters of 2nd and 3rd level are also allowed). A minimum of 15 pages (fonts and layout according to LBS standards) is required per essay. You will be asked to elaborate on an example of your choice about the applicable concepts of pricing and product strategies respectively distribution channels and networks a s well as integrated marketing communication (promotion). 2 Marketing II/ Session 1

3. Lauder Business School Product 3 Marketing II/ Session 1

4. Lauder Business School GOODS AND SERVICES CONTINUUM 4 Marketing II / Session 1

5. Lauder Business School TANGIBILITY 5 Marketing II / Session 1 Goods are more tangible than services Pure goods are tangible - socks Pure service are intangible - medical procedure A mix has tangible and intangible components - rental cars

6. Lauder Business School SEARCH, EXPERIENCE, CREDENCE 6 Marketing II / Session 1 Search Qualities May be evaluated prior to purchase - socks Experience Qualities Require trial or consumption before evaluation - restaurants Credence Qualities Difficult to judge even post-consumption - medical procedures

7. Lauder Business School PERISABILITY & INSEPERABILITY 7 Marketing II / Session 1 Services are simultaneously produced and consumed Perishability: Services are more perishable than goods Marketers must try to even out demand Inseparability: Services are more impacted by the interaction between the service provider and the customer than goods

8. Lauder Business School VARIABILITY 8 Marketing II / Session 1 Services are more variable than goods Due to changing needs, abilities, etc. in the service provider and customer Self-service and equipment can decrease variability Try to reduce bad variability Errors in the system Try to improve good variability Customization for customers’ unique needs

9. Lauder Business School GOODS & SERVICES 9 Marketing II / Session 1 Differences between goods and services influence business decisions - Advertising, branding, pricing, logistics, etc. Thinking beyond traditional services… - Professional services - Purchase experiences - On-line shopping

10. Lauder Business School CORE AND VALUE-ADDED OFFERINGS 10 Marketing II / Session 1 When designing a product one needs to define the product’s core offerings and the value-added

11. Lauder Business School CORE AND VALUE-ADDED OFFERINGS 11 Marketing II / Session 1 Core is essential to the product offering Core elements are expected by customers If core elements are substandard, dissatisfaction can be triggered Value-added is supplemental and can be used for differentiation Marketers can affect level of satisfaction through value-addeds For example, luxurious rooms may lead to high satisfaction

12. Lauder Business School DYNAMIC STRATEGIES 12 Marketing II / Session 1 Core businesses might change as the industry changes or as the firm’s competencies change Ask… What business are we in? What benefits do we want to provide to the consumer? Who is our competition? Example: IBM

13. Lauder Business School PRODUCT MIX 13 Marketing II / Session 1 Product mix A company’s product lines Breadth Number of product lines Depth Number of products in a line

14. Lauder Business School PRODUCT MIX 14 Marketing II / Session 1 Example: Example: SamsungSamsung Faber-Castell

15. Lauder Business School PRODUCT MIX 15 Marketing II / Session 1 Product line manager can prune or supplement existing lines Extensions into breadth and depth must be done for strategic reasons Shouldn’t try to be all things to all people Are the new launches consistent with brand’s/company’s positioning? If not, can the brands be directed to different target segments without diluting the existing position?

16. Lauder Business School PRODUCT LINE STRATEGIES 16 Marketing II / Session 1