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What is a Product? Multidimensional, sum of all its features, bundle of utility
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Product Component Model Repair and maintenance SUPPORT SERVICES COMPONENT CORE COMPONENT Installation Instructions Other related services Deliveries Warranty Spare parts Legal Trademark Brand name Legal Product platform Design features Functional features Legal PACKAGING COMPONENT Price Quality Package Styling Irwin/McGraw-Hill 12-6
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Product Marketing Decisions Numerous Affected by Environmental Factors Affected by internal Strengths and Weaknesses
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Types of Product Decisions (1) Product Positioning Positioning refers to the act of locating a brand in customers minds relative to competitive products in terms of product attributes and benefits
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Positioning Map: Automobiles For Generation Yers More Edgy Less Edgy ExpensiveInexpensiv e Scion Kia Sorrento $13k Cube Civic $20K
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Types of Product Decisions: (2) Product Mix Decisions Def.: Set of all products and items that a particular seller offers to buyers. Decisions include selection of width, length, depth, and consistency
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Product Mix / Assortment E.g. P&G DetergentsToothpaste Ivory SoapCrest DreftGleam Tide Cheer Oxydol Dash Gain Bold Era
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(3) Product Line Decisions A product line is a group of products that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same channels Decisions include Product Line length, modernization, featuring, pruning
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(4) Brand Name A companys unique designation or trademark, which distinguishes its offering from other product category entries
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(5)The Logo Graphic design element that is related to the brand name Companies use logos with or without brand names Not all brand names possess a distinct logo but many do e.g., the Nike swoosh, Ralph Laurens Polo
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(6) Packaging Decisions Color Design and Shape Physical Materials Product Information on Package
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What is a Service? Any act that one party can offer to another that is essentially intangible and does not result in the ownership of anything. May or may not be tied to a physical product
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Major Categories U.S. Exports of Services Category Percentage Services Total 28.5 Travel (hotels, etc) 8.7 Transportation (fares, freight, and port services) 7.5 Commercial, professional, and technical services (advertising, accounting, legal, construction, engineering) 1.7 Financial services (banking and insurance) 1.5 Education and training services (most foreign student tuition) 1.0 Entertainment (movies, books, records) 0.8 Other categories (telecommunications, information, health care) 7.3 Irwin/McGraw-Hill 13-2 Source: U.S. Department of Commerce, http://www.doc.gov. 2001http://www.doc.gov
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Service Marketing Decisions Product Mix Product Line Brand Name Logo Store Layout
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Types of Service Marketing Decisions Product Positioning
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Montevideo, Uruguay
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What is an Industrial Product? Goods intended for industrial use, i.e. creating other goods & services –Materials & parts (enter manufacturers product completely, e.g. oil, lumber, tires, small motors) –Capital Items (long lasting, facilitate developing finished product, e.g. buildings, generators, lift trucks) –Supplies & business services (short lasting, e.g. pens, brooms, maintenance & repair services)
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Major Categories U.S. Exports Industrial 13-3 Irwin/McGraw-Hill Source: U.S. Department of Commerce, http://www.doc.gov. 2001http://www.doc.gov Category Percentage Merchandise Total 71.5 Food, feeds, and beverages (wheat, fruit, meat) 4.8 Industrial supplies (crude oil, plastics, chemicals, metals) 15.1 Capital goods (construction equipment, aircraft, computers telecommunication) 32.1 Automotive vehicles, engines, and part 7.7 Consumer goods (pharmaceuticals, tobacco, toys, clothing) 8.2 Other categories 3.6
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To Standardize or Adapt Product/Service? That is the Question.
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Products & Services for Consumers Two Approaches for International Product Development –Adaptation – The strategy of altering products to meet the needs of local markets –Global Standardization – The standardization of products across markets & ultimately the standardization of the marketing mix worldwide
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Global Standardization vs. Local Adaptation – Continuum Continuum not One or the other Global Standardization - Ideal, theoretical Regional Standardization – uniform marketing within a particular region, EU Globalize components, e.g. Brand Name, Logo, Image, Positioning, physical product,
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Globalization A little boy from Japan flies to the United States with his parents, and on the way in from the airport they pass the "miracle mile" most places have now. The little boy turns to his parents and says, "Hurray! They have McDonald's here in America too!"
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Globalization Braun (Gillette) sells kitchen appliances using same marketing mix across continents with minor mandatory adaptations (voltage, cycles)
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Pro Globalization Arguments Global Consumers – Needs of consumers are becoming more homogenous world wide Global Brand Awareness facilitated by travel, communication, internet Results in lower price due to standardized product research, economies of scale, promotion
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Adaptation - Love Hotels in Japan You'll find "Love Hotels" all over Japan, places designed for folks to get together. The rooms offer a fantasy of luxury and escape from crowded tiny apartments where families or neighbors might spy on licit or illicit physical pleasures. You can tell the love hotels by their bright-lit neon signs with funny names, often English inflected: Hotel Elmer, Hotel Carrot, Hotel Charm, Hotel Princess, Hotel Chrystal. And the signs out front will list two or three prices: short stays, long stays, overnight stays. In the lobby, you won't see any people. Only a large room menu on the wall. If a photo of a room is lit up, the room is available. You like that room, press a button next to the photo. A faceless person behind dark glass hands you a key after you hand them your cash.
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L ove Hotel
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Price Information Stay ¥ 4500 ($40)-- OPEN Rest ¥ 3600 ($30)-- CLOSE AM 10:00-PM 5:00 PM 3:00-PM 6:00 ¥ 2600 AM 10:00-PM 4:00 ($20)
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Which Components of the Product May Require Adaptation? Irwin/McGraw-Hill 12-7 Core Component Physical Product Features Design *Positioning Psychological Packaging Component Style Brand Name Packaging Quality Labeling Price Trademarks Support Services Component Repair Warranties Maintenance Deliveries Instructions Spare Parts Installation
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Alu-Fanny: French Foil wrap Crapsy Fruit: French cereal Kum Onit: German pencil sharpeners Plopp: Scandinavian chocolate Pschitt: French lemonade Atum Bom: Portuguese tuna Kack: Danish sweets Mukk: Italian yogurt Pocari Sweat: Japanese sport drink Poo: Argentine curry powder Would They Sell in the United States? Irwin/McGraw-Hill 12-9
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Detergent Powder (Hand laundry detergent) Strong cleaner, well-known in international markets packaged in 150, 480 gram and 20 kilogram sizes Shampoo Makes hair shiny, for normal hair, packaged in 400 gram size Adapt or Standardize?
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How could this product be adapted to U.S.? Product? Package? Support Services?
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Services Adaptation important because it involves people to people contact
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Industrial Products Industrial Products Require Less Adaptation –Industrial goods share similar buying motives worldwide Industrial Products main U.S. export
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