Chapter 9 - Products, Services, and Brands Building Customer Value.docx

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Department
Management (MGM)
Course
MGMA01H3
Professor
Alison Jing Xu
Semester
Fall

Description
Chapter 9 – Designing a Customer-Driven Strategy and Mix Product – anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Service – any activity or benefit that one party can offer to another that is essentially intangible and doesn’t result in the ownership of anything. Market offerings often consist of a combination of goods and services. Levels of Product and Service:  Core customer value – when designing products, marketers must define the core, problem-solving benefits or services that consumers seek.  Actual product – marketers need to develop product and service features, a design, a quality level, a brand name, and packaging.  Augmented product – around the core benefit and actual product by offering additional consumer services and benefits. Product and Service Classification  CONSUMER PRODUCTS – a product bought by final consumers for personal consumption.  Convenience product – a consumer product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort. o Frequent purchases bought with minimal buying effort and little comparison shopping o Low price o Widespread distribution o Readily available (placed conveniently in stores)  Shopping product – a consumer product that the customer, in the process of selection and purchase, usually compares on such bases as suitability, quality, price, and style. o Less frequent purchases o More comparison effort o Higher than convenience good pricing o Selective distribution o Personal selling, advertising  Specialty products – a customer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. o Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity o High price o Exclusive distribution o Carefully targeted promotions  Unsought product – a consumer product that the consumer either doesn’t know about or knows about but doesn’t normally think of buying. o Little product awareness and knowledge (or if aware, sometimes negative interest) o Aggressive advertising and personal selling 1  BUSINESS PRODUCTS – a product bought by individuals and organizations for further processing or for use in conducting a business. Based on the product purpose.  Material and parts o Raw materials (farm products and natural products) o Manufactured materials and parts  Capital items o Installations (buildings and fixed equipment) o Accessory equipment (portable factory equipment and tools, and office equipment)  Supplies and services o Supplies and repair and maintenance items o Maintenance and repair services and business advisory services  ORGANIZATIONS, PERSONS, PLACES, AND IDEAS  Organization marketing – consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization. o Corporate image marketing  Person marketing – consists of activities undertaken to create, maintain or change attitudes or behavior toward particular people. o Build the reputation  Place marketing – involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places.  Idea marketing  Social marketing – the use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well-being and that of society. o Public health campaigns to reduce smoking, alcoholism, drug abuse, and obesity. o Environmental campaigns to promote wilderness protecting, clean air, and conservation. o Family planning, human rights, and racial equality. PRODUCT AND SERVICE DECISIONS INDIVIDUAL PRODUCT AND SERVICE DECISIONS Product and service Branding Packaging Labelling Product support attributes services 1. Product And Service Attributes  Product Quality – the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs. (“Freedom from defects” or “Quality is when our customers come back and our products don’t”) 2  Total quality management (TQM) – is an approach in which all the company’s people are involved in constantly improving the quality of products, services, and business processes.  Performance quality – the ability of a product to perform its functions.  Conformance quality – freedom from defects and consistency in delivering a targeted feel of performance.  Product Features – a competitive tool for differentiating the company’s product from competitors’ products.  The company can create higher-level models by adding more features.  Features that customers value highly in relation to costs should be added.  Product Style and Design  Styles can be eye-catching or yawn-producing.  Good design contributes to a product’s usefulness as well as to its looks. Design begins with a deep understanding of customer needs. Product designers should think less about product attributes and technical specifications and more about how customers will use and benefit from the product. 2. Branding  Brand – a name, term, sign. Symbol, design, or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.  Brand names help consumers identify products that might benefit them.  Brands also say something about product quality and consistency.  The seller’s brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors. Building and managing brands are the marketer’s most important tasks. 3. Packaging  Packaging – the activities of designing and producing the container or wrapper for a product.  Attract attention, describe the product, make the sale.  Innovative packaging can give a company an advantage over competitors and boost sales. 4. Labelling  Label – simple tags attached to products to complex graphics that are part of the package.  Identifies the product or brand.  Describes several things about the product – who made it, where it was made, when it was made, its contents, how it is to be used, and how to use it safely.  Promotes the brand, supports its positioning, and connect with customers. 5. Product Support Service  Customer Service  Survey customers periodically to assess the value of current services and to obtain ideas for new ones.  Fix problems and add new services that will both delight customers and yield profits to
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