PRODUCT AND SERVICE STRATEGY
PRODUCT AND SERVICES STRATEGY
PRODUCT is anything that can be offered to a market for attention,
acquisition, use or consumption that might satisfy a want or need.
SERVICE is an activity or benefit that one party can offer to another
That is essentially intangible and does not result in the ownership of anything
EXPERIENCE: Products are tangible, services are intangible but
experiences are memorable.
LEVELS OF PRODUCT
1: Core product - Core benefit or services - benefits the product will provide to the consumer
2: Actual product - built around the core product, quality, features, designs, brand name and packaging.
3: Augmented product ± additional consumer services and benefits e.g. warranty, installation, after sale service
CONSUMER PRODUCTS, products bought by final consumer for personal consumption.
a: Convenience products: Consumer products that the customer buys frequently, immediately and with a minimum of comparison and buying efforts. b: Shopping products: Consumer goods that the customer, in the process of selection and purchase, characteristically compares on such bases as suitability, quality, price and style c: Specialty products: consumer products with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort d: Unsought products: Consumer products that the consumer either does not know about or knows about but does not normally think of buying ±
Product classifications - contd
INDUSTRIAL PRODUCTS: Products bought by individuals and organizations for further processing or for use in conducting a business.
1: Material and parts. 2: Capital items . 3: Supplies and services
ORGANIZATIONS, PERSONS AND IDEAS
1: Corporate image building 2: Personal marketing 3: Place marketing 4: Idea marketing 5: Social marketing: The design, implementation and control of programs seeking to increase the acceptability of a social idea, cause or practice among a target group.
INDIVIDUAL PRODUCT DECISIONS
While developing and marketing individual products and services the important decisions are product attributes, branding, packaging, labeling and product support services
Product Attributes: Quality: The ability of a product to perform its functions. It includes the product¶s overall durability, reliability, precision, ease of operation, repair and other valued attributes Product features Product style and design
Brand is a name, term, sign, symbol or design or a combination of these, that identifies the maker or seller of product or service. Brand is a part of the product. It adds value to the product Brand Equity is value of a brand, based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand association and other assets such as patents, trademarks and channel relationships.
BRAND NAME SELECTION IS VERY VERY SERIOUS BUSINESS
Brand name should suggest something about the product¶s benefit ± Easy to pronounce Distinctive Translate easily to foreign language
Brand be legally protected
1: Manufacturer¶s brand 2: Private Brands
Slotting fee by retailers
3: Licensed brands 4: Co-brands
A COMPANY HAS FOUR OPTIONS TO DECIDE ON BRAND STRATEGY
1: LINE EXTENSION ± introduction of additional items in a given product category under the same brand name 2: BRAND EXTENSION ± using a successful brand name to launch a new or modified product in a new category 3: MULTIBRANDS - same category with new or additional brands -
4: NEW BRANDS ± new brand for new product category
FOUR BRAND STRATEGIES
Packaging is activity of designing and producing the container or wrapper for a product Primary Packaging Secondary Packaging Shipping Package Labeling
Purpose of packaging 1: Protection 2: Dispensing 3: Advertising etc. Decisions regarding specific elements like size, shape, material, color, text and brand mark Childproof packaging Temper proof packaging Environmental concerns Packaging reduction/going green/aseptic packaging
Label includes simple tag to complex graphic printed on the package
Identifies the brand or product Promote the sale of the product ± attractive design etc. Manufactured by«.. Usage instructions Where was the product manufactured MRP ± Maximum retail price Legality Price Manufacturing/expiry date Ingredients Nutritional information
PRODUCT SUPPORT SERVICES
Periodic Consumer Survey Users data, Internet services
PRODUCT LINE DECISIONS A group of products that are closely related because they functions 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 line length Product line stretching, upward, downward or both ways
(This is by bigger companies to plug competitors entry)
PRODUCT MIX DECISIONS Product mix or product assortment consists of all the product lines and items that a particular seller offers for sale.
Width ± No. of different product lines ± HPC, food, cosmetics Length ± total number of items within product lines Depth ± version offered in each product Consistency ± how close various products lines are
SERVICE is an activity or benefit that one party can offer to another that is essentially tangible and does not result in the ownership of anything.
Nature and Characteristics of a Service INTANGIBILITY: services cannot be seen, tasted, felt, heard or smelled before the purchase INSEPARABILITY: cannot be separated from their provider VARIBILITY: quality of services depends on who provides them and when, where and how PERISHABILITY: cannot be stored for later sale or use
MARKETING STRATEGIES FOR SERVICE FIRMS
The Service-Profit Chain
Internal service quality---satisfied and productive service employees---greater service value---satisfied and loyal customers---healthy service profits and growth
INTERNAL MARKETING ± marketing by a service firm to train and effectively motive its customer-contact employees and all the supporting serviced people to work as a team to provide customer satisfaction. INTERACTIVE MARKETING ± marketing by a service firm that recognizes that perceived service quality depends heavily on the quality of buyer-seller interaction
MANAGING SERVICE DIFFERENTIATION
Innovative features Customer-contact officials Symbols and branding
MANAGING SERVICE QUALITY
Service quality hard to define Empower front line employees Watch service performance closely Communicate concerns about service quality to employees
MANAGING SERVICE PRODUCTIVITY
Better training facilities to staff members Power of technology Web site Do not over stress technology