Chapter 9 Notes.docx

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Department
Business Administration
Course
Business Administration 3301K
Professor
Dr.Mike
Semester
Fall

Description
Chapter 9 Notes Core Customer Value: defines the basic problem-solving benefits that consumers are seeking. What are customers looking for? Marketers convert core customer value into an actual product. Brand name, features, design, quality, and packaging are all considered. Associated Services (Augmented Product): nonphysical attributes of the product, including warranties, financing, product support, and after-sale services Types of Products: Consumer Products: products and services used by people for their personal use. Marketers further classify these products by the way they are used and purchased Specialty Products/Services: customers show a strong preference that they will expend considerable effort to find the best suppliers. Example: luxury cars and designer clothes. Shopping Products/Services: consumers will spend a fair amount of time comparing alternatives. Example: footwear (people will try shoes on, compare alternatives, and chat with salespeople) Convenience Products/Services: consumer is not willing to spend any effort to evaluate prior to purchase. These are frequently purchased commodity items, usually purchased with very little thought. Example: bread or soap Unsought Products/Services: consumers either do not normally think of buying or do not know about. These products require lots of marketing effort and various forms of promotion. Example: individual has cold hands and does not know what to do. Individual should try “Hot Hands: Hand Warmers” Product Mix and Product Line Decisions Product Mix: the complete set of all products offered by a firm Product Lines: groups of associated items, such as those that consumers use together or think of as part of a group of similar products Product Category: an assortment of items that the customer sees as reasonable substitutes for one another Brand: the name, term, design, symbol, or any other features that identify one seller’s good and service as distinct from those of other sellers Product Mix Breadth: the number of product lines, or variety, offered by the firm Product Line Depth: the number of products within a product line Stock Keeping Units (SKUs): individual items within each product category; the smallest unit available for inventory. Example: Colgate offers 49 SKU’s that represent sizes, flavours, and configurations of three different tooth pastes. An example of one SKU is the 100-milliletre size of Colgate Total Clean Mint. Changing Product Mix Breadth Increase Breadth: add new product lines to capture new or evolving markets, increase sales, and compete in new venues Decrease Breadth: sometimes it’s necessary to delete entire product lines to address changing market conditions or meet internal strategy priorities Changing Product Line Depth Increase Depth: Firms may add new products within a line to address changing consumer preferences while boosting sales. Example: addition of Levi Strauss low- cost jeans to be sold through Wal-Mart Decrease Depth: sometimes it’s necessary to delete product categories to realign resources. Firms regularly eliminate unprofitable items and refocus their marketing efforts on more profitable items Change Number of SKUs A very common and ongoing activity for many firms is the addition or deletion of SKUs in existing categories to stimulate sales or react to consumer demand. Example: fashion manufactures and retailers change their SKUs every season, even if it’s just different colours or fabrics. Product Line Decisions for Services: Many of these strategies can be applied to services. For example, a bank typically offers different product lines for its business and consumer accounts (different types of bank accounts are equivalent to SKUs). Value of Branding for the Customer and the Marketer: ways in which brands add value for customers and the firm Brands Facilitate Purchasing: consumers often easily recognize brands. Brands enable customers to differentiate one firm or product from another. Brands Establish Loyalty: Loyal Coca-Co
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