1、Lesson 7,Product & Service Strategy MKT1003 SEMESTER 1, 2016/17, WEEK 1 By Janet Liau,Three Levels Of Products,What Is a Product?,Levels of Product and Services Core benefits represent what the buyer is really buying. Actual/Tangible product represents the design, brand name, and packaging that deli
2、vers the core benefit to the customer. Augmented product represents additional services or benefits of the actual product, which helps to enhance enjoyment of benefits,Assignment Class participation,What are the core, tangible and augmented products offered by the following three situations?How can
3、these organizations improve their marketing performance as a result of this analysis?,Assignment Class Participation,What Is a Product?,Product and Service Classifications Consumer products Industrial products,What Is a Product?,Product and Service Classifications Consumer products are products and
4、services for personal consumption. Classified by how consumers buy them Convenience product Shopping products Specialty products Unsought products,Classification of consumer goods,What Is a Product?,Product and Service Classifications Convenience products are consumer products and services that the
5、customer usually buys frequently, immediately, and with a minimum comparison and buying effort. Newspapers Candy Fast food,What Is a Product?,Product and Service Classifications Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price,
6、and style. Furniture Cars Appliances,What Is a Product?,Product and Service Classifications Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. Designer watches
7、 Branded fashion wear High-end electronics,What Is a Product?,Product and Service Classifications Unsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying. Life insurance Funeral services Blood donations,Classification of Cons
8、umer Products,Durable products High involvement Small replacement markets Revenues from after sales support,13,Classification of Consumer Products,Non-durable products Low involvement Large replacement markets Merchandising; easy to repurchase,14,Classifying Industrial Products,Entering Goods,Founda
9、tion Goods,Facilitating Goods,Raw Materials- Farm Products- Natural Products(e.g., iron ore, lumber) Manufactured Materials/Parts- Component Materials- Component Parts(e.g., tires, microchips),Installations- Buildings & Land Rights- Fixed EquipmentAccessory Equipment- Light Factory Equipment(e.g., l
10、ift trucks)- Office Equipment,Supplies- Operating Supplies(e.g., lubricants, paper)- Maintenance & Repair Items(e.g., paint) Business Services- Maintenance & Repair Services- Business Advisory Services,Classification of Industrial Products,Entering goods Continuous purchase Costs Quality Delivery,16
11、,Classification of Industrial Products,Foundation goods Long term use and impact Initial price + operation costs Support services,17,Classification of Industrial Products,Facilitating goods Many items and small value Efficiency in management Automation and outsourcing,18,Product Mix,The Product mix
12、is the total variety of products a firm sells. Some firms will sell just one product, whilst others will sell a large number of different products. For example Samsungs product mix includes mobile phones, netbooks, tablets, televisions, fridges, microwaves, printers and memory cards.,Product Mix,Pro
13、duct Mix,Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.,Product Mix,Product width is the number of different product lines
14、 the company carries. E.g Unilever:,Ice-cream,Personal and Beauty Care,Tea,Food Seasoning and Soups,Product Line,Product Line,Product Line,Product Line,Product Mix,The product length shows the number of different product types in a product line. A long product line has lots of different products in
15、it and a short product line has a small number of different products. If there are too many product types in a product line, they will begin to compete with each other, increase costs unnecessarily and even confuse customers. If the product line is too short it will limit customer choice and send cu
16、stomers to competitors with a greater selection of products.,Product Mix,Product depth is the number of versions offered of each product type in the line.,Lipton Iced Tea,Product Mix,Apply to Apple,Product Life Cycle,Products go through cycles with stages. Characteristics are different for different
17、 stages. Different strategies may be required for different stages,Introduction,Growth,Maturity,Decline,New to market Low sales volume,Rapid increase in Sales Volume Market Share,Peak sales Reduced production cost New competitors Product development,Sales decline Reduce production End of product lif
18、e cycle,Product Life Cycle,SOME LIFE CYCLE PATTERNS,Sales Level,Time,FAD,FASHION,STYLE,TYPICAL, 2012 Principles of Marketing: An Asian Perspective,30,Product Life-Cycle,Categories of PLCs product class (gasoline-powered automobiles) product form (SUVs) brand (the Kia Sorrento) Product classes have t
19、he longest life cycles Product forms have the standard PLC shape Product brands PLC can change quickly,Life Cycle Strategies,Introductory Low sales, few competitors. Grow the market through product education. MARCOM budget low or high? Price low or high?,Life Cycle Strategies,Growth Rapidly increasi
20、ng sales, many entrants. Capture share through brand awareness and preference. Range and differentiation. Distribution and availability Production and availability,Life Cycle Strategies,Maturity High penetration rate and fierce competition Sales peak and decline gradually Consolidation of industry M
21、arketing strategies used at Maturity Stage Modify the market Modify the product Repositioning the product For participation, define and and give examples of the strategies above.,Life Cycle Strategies,Decline Sales decline over time. Some competitors exit. Focus on profitable products and segments.
22、Time your exit. Maintain (hoping that competitors will exit), Harvest or Divest,Adopters Categories,Branding,What are the benefits for buyers?What are the benefits for companies?,Branding,What are the benefits of branding for Buyers? Signals quality, standing for certain benefits and value Simplify
23、information search and decision-making in crowded and complex marketplace Provides Identity,Branding,What are the benefits of branding for Sellers? Identification - stands for certain benefits, values, quality Differentiation/competitive advantage Repeat purchase Loyalty Premium Pricing Profit Brand
24、 Extension Brand Equity Value of company,What is a Brand?,Branding in which an organization uses a “name, phrase, design, symbols, or a combination of these to identify its products and distinguish them from those of competitors” A brand is a set of perceptions and images that represent a company, p
25、roduct or service. While many people refer to a brand as a logo, tag line or audio jingle, a brand is actually much larger. A brand is the essence or promise of what will be delivered or experienced. “The intangible sum of a products attributes: its name, packaging, and price, its history, its reput
26、ation, and the way its advertised” (David Ogilvy) A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumers decision to choose one product or service over another.,Branding,Brand identity includes: A name (e.g. Apple. HP, Mentos) Phrase (“A
27、 Great Way to Fly”, “Just Do it”) Design (e.g. Coke, Pepsi) Symbols (e.g. Nike Swoosh, Apples Bitten Apple, M&Ms characters, Energizer Bunny) Music/Jingle (e.g. Pizza Hut) = Visual Brand Identity,Branding,Brand identity includes (contd): Positioning Personality Behavior Values/Beliefs RelationshipsE
28、xample:,13-41,Firsts in Many,BEST INFLIGHT SERVICE,Branding,Brands are generally developed over time through: Effective communication containing consistent messaging Recommendations from friends, family members or colleagues Interactions with a company and its representatives Real-life experiences u
29、sing a product or service (generally considered the most important element of establishing a brand),Branding,Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service. Competitive Advantage Consumers Top of Mind Awareness and Loya
30、lty Consumers Willing to Pay a Premium Valuation of Non-tangible Asset Brand Extension and Licensing,Branding,Attitude branding is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption of the product at all. Marketing labeled as attitude brandin
31、g include that of Nike, Starbucks, The Body Shop, Safeway, and Apple Inc A great brand raises the bar - it adds a greater sense of purpose to the experience, whether its the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee youre drinking really matters.“ - H
32、oward Schultz (president, CEO, and chairman of Starbucks),Brandname,Choosing the Right Brand Name: Should Suggest Product Benefits (e.g. Energizer, Head and Shoulder, Fairprice) Should Be Memorable, Distinctive and Positive (e.g. Osim, Nike) Should Fit the Company or Product Image (e.g. Nestle) Shou
33、ld Have No Legal or Regulatory Restrictions (e.g. Koufu) Should Be Simple and Emotional (e.g. Bold),Brand Names,47,Brand Names,48,Brand Names,49,Who can build Brands?,Can only big companies have successful brands? Is advertising important for branding?,Copyright 2009 Pearson Education South Asia Pte
34、 Ltd,13-50,11-51,Alternative Brand Architecture Strategies,Alternative Brand Architecture Strategies,Branding Strategy Multi-branding/ Individual BrandingMulti-product/Umbrella Branding/Family Branding Corporate vs product A result of brand extension and line extension Sub-branding,Alternative Brand
35、 Architecture Strategies,Multi-branding/Individual Branding Individual branding: each brand had distinctive name not associated with firm or its other products Questions: What are the examples of companies that practice Individual Branding? Why is it a good strategy? What are the risks?,Alternative
36、Brand Architecture Strategies,Advantages: No association in case of failure Can market several brands in competition with each other Create advancement within firm More control over distribution Disadvantages: High cost of promoting individual brand No capitalization on established reputation Potent
37、ial cannibalization,Alternative Brand Architecture Strategies,Family branding : All names put under one umbrella. Also called Umbrella Branding and Multi-product branding Questions: What are the examples of companies that practice Umbrella Branding? Why is it a good strategy? What are the risks?,Alt
38、ernative Brand Architecture Strategies,Family/Umbrella Branding (contd) Advantages: Easier and less costly to introduce Capitalize on reputation Disadvantages: Failure may cause association Greater burden to maintain consistent quality Dilution The advantages of Sub-branding (a strategy used with Um
39、brella branding)?,Other Branding Strategies,Private branding Private labelling or reseller branding example? Mixed branding give an example? Co-Branding give an example? Local vs Global branding When do you decide on local branding? When do you decide on global branding?,Branding Strategy,Co-brandin
40、g Two companies,58,Branding Strategy,Localized branding Local culture & values Scale Globalized branding Global world and cross border communications Synergy and scale Global identity relevant across all countries Still need to adapt local communications,59,Branding Strategy,Globalized and localized
41、 branding Transition from local to global brand identity,60,Branding Strategy,Brand repositioning Update brand association because old association is obsolete Challenge: gain acceptance of new association,61,Packaging and Labelling,Creating Customer Value and Competitive Advantage Communication Bene
42、fits Information Brand recognition/Equity Functional Benefits Storage, convenience, protection, product quality Perceptual Benefits Differentiation/Appeal/Brand equity Origin,PEZ HEADS DISPENSER WHAT ARE THE PACKAGING BENEFITS?,11-63,LAYS STAX AND PRINGLES WHICH CHIP STACKS UP BETTER?,11-64,Case Stu
43、dy Alleira,Case: Alleira (Download from MKT1003 Workbin Cases Folder) Individual Assignment C Hardcopy Report Due in Class Read and analyze the case and answer Question 1 to 4 at the end of the case.,Case Questions,What constitute a brand identity? What is the brand identity of Alleira? What is your
44、 evaluation of the brand identity of Alleira? How can the brand identity be improved? What are the purposes, benefits and costs of branding as undertaken by Alleira for its batik products and collection? What is the branding strategy of Alleira? What are the advantages and disadvantages of its brand
45、ing strategy? What tools are used and actions are taken by Alleira to communicate to and obtain responses from consumers? Are the tools and actions effective? What improvements would you propose?,Service Marketing,Product Service Mix,Characteristics of Services,Intangibility Inseparability Variabili
46、ty/Inconsistency Perishability/Inventory,Service Challenges,Intangibility due to Experience & Credence Properties What are experience properties? What are credence properties?,Service Evaluation Properties,Service Challenges,What is the key challenge caused by Intangibility? Problems for new comers
47、Cannot evaluate before your experience it (experience properties),Service Challenges,What are the solutions for Intangibility? External Marketing Communicate benefits More concrete message Use of symbols - smth you can see Be careful with contextual factors Manage expectations Manage word of mouth (
48、reviews e.g. hotels),Service Challenges,Inseparability What are the challenges caused by Inseparability? Production and consumption cannot be provided separately/ happen at the same time. Implication: for perishability - service cannot be stored High interaction between consumer and producer at whic
49、h point of contact is the most impt and what are you gonna do during those key points (impt contact point),Service Challenges,Variability What are the challenges caused by Variability Inconsistencies in giving quality,Service Challenges,Solutions for Variability/Inseparability Interactive Marketing Understand customer expectations & implement delivery system (incl recovery procedure, feedback and audit) Internal Marketing Have careful selection of staff Regular training Internal Communication and Motivation SOP standard operating procedure,
