Product And Services Strategies

Lecture 5 Product and Services Strategies

Dr Gamal Sayed AbdelAziz Cairo University

What is product? Product  Anything offered to a market for attention, acquisition, consumption or use that might satisfy a need or want. 9- 2

Service  Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. 9- 3

Figure 1:

Three Levels of Product

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Discussion Question Describe the core benefit, actual product, and augmented product aspects of an automobile purchase.

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Classifying products Product and service classifications fall into two broad classes based on the types of buyers who use them:  Consumer products  Industrial products 9- 6

Consumer Products Types of Consumer Products

Convenience Shopping Specialty Unsought

Frequent purchases bought with minimal buying effort and little comparison shopping Low price Widespread distribution Mass promotion 9- 7

Types of Consumer Products

Convenience Shopping Specialty Unsought

Less frequent purchases requiring more shopping effort and price, quality, and style comparisons. Higher priced than convenience goods Selective distribution in fewer outlets Advertising and personal selling by producer and reseller 9- 8

Types of Consumer Products

Convenience Shopping Specialty Unsought

Strong brand preference

and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity High price Exclusive distribution Carefully targeted promotion by 9- 9

Types of Consumer Products

Convenience Shopping Specialty Unsought

Little product awareness and knowledge (or if aware, sometimes negative interest) Pricing varies Distribution varies Aggressive advertising and personal selling by 9- 10

Industrial products  Industrial products are those purchased for use in conducting a business or those purchased as ingredients or components to be used in manufacturing.  Materials and parts  Capital items  Supplies and services 9- 11

Other types of products  “Products” also include organizations, persons, places, and ideas 

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Organizational marketing makes use of corporate image advertising Person marketing applies to political candidates, entertainment sports figures, and professionals Place marketing relates to tourism Social marketing campaigns promote ideas

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Social marketing promotes ideas or causes for the purpose of improving an individual’s wellbeing or the wellbeing of society.

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Product & Service Decisions Key Decisions Product attributes

Individual Product Product Line Product Mix

 Quality, features, style and design

Branding Packaging Labeling Product support

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Figure 2

Individual Product and Service Decisions

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Innovative product design can help revitalize a company, such as with the Apple iMac. Brand:  A name, term, sign, symbol, design, or a combination of these, that identifies the maker or sellers of a product or service.

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Packaging involves designing a container or wrapper for a product

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Labeling Many aspects of a food product’s label are dictated by law

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Product support services Support services via the web include FAQ files, email queries, live chat with customer service personnel, and software updates 1-800 Flowers 9- 19

Product & Service Decisions Key Decisions Individual Product Product Line Product Mix

Product line is a group of products that are closely related because they: 1- function in a similar manner 2- are sold to the same customer groups, 3- are marketed through the same types of outlets or fall within given price ranges. For example, Motorola produces several lines of telecommunications products. 9- 20

Key Decisions Individual Product Product Line Product Mix

Product mix or assortment consists of all the product lines and items that a particular seller offers for sale.

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3 dimensions of product mix Product line width:  Number of different product lines carried by company

Product line depth:  Number of different versions of each product in the line

Product line consistency 9- 22

Branding Strategy Brands are powerful assets that must be carefully developed and managed.  Both Tiger Woods and Nike can be considered brands

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Brands with strong equity have many competitive advantages:  High consumer awareness  Strong brand loyalty  Helps when introducing new products  Less susceptible to price competition 9- 24

Good Brand Names:  Suggest something about the product or its benefits  Are easy to say, recognize and remember  Are distinctive  Are extendable  Translate well into other languages 9- 25

Discussion Question Evaluate the brand name for the product at left according to the criteria previously listed. Would you have chosen this name for this product?

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Brand Sponsorship 1- Private (store) brands  Costly to establish and promote  Higher profit margins

2- Manufacturer brands

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3- Licensed brands Name and character licensing has grown.

4- Co –branding

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Services Marketing Services  Account for 74% of U.S. gross domestic product.  Service industries include business organizations, government, and private not-for-profit organizations. 9- 29

Figure 3

Four Services Characteristics

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Figure 4

Three Types of Marketing in Services Industries

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Service Firm Marketing Strategies 1- The Service-Profit Chain Internal Marketing: service firms train and effectively motivate their employees to work as a team to satisfy the customer  Interactive Marketing: recognizes that service quality depends heavily on the 

quality of buyer-seller interaction 9- 32

Service Firm Marketing Strategies 2- Managing Service Differentiation

British Airways differentiates its service by offering first-class world travelers private “demi-cabins”

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Additional Product Considerations Product Decisions and Social Responsibility  Legal compliance  Product liability issues  Warranties

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Additional Product Considerations International Product and Services Marketing  Special challenges: Which products should be marketed internationally?  Should the products be standardized or adapted for world markets?  How should packaging be adapted?  How can other barriers be overcome? 

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