Chapter 9 - Products, Services and Brands.docx

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 2320A/B
Professor
John White
Semester
Fall

Description
Chapter 9: Products, Services, Brands - Building Customer Value Product: anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need (includes services, events, persons, places, organizations, ideas or mixes of these) Market offering often includes a mix of both product and service Levels of Products and Services 1st level – core customer value: “What is the customer really buying?” augmented  When designing products/services, marketrs must define the core, problem solving benefits or services customers seek actual o Women buying lipstick is getting more than lip colour, they are getting hope core 2ndlevel – actual product: develop product and service features, a design, quality level, brand name, packaging  A blackberry is a product 3 level – augmented product: build around core product and actual product by offering additional consumer services and benefits   Warranty, instructions, repair services, toll free #, website Product and Service Classifications Two broad classes based on the types of consumers that use them, difference is the purpose for which the product is bought 1. Consumer products – products and services brought by final consumers for personal consumption Marketing Type of Consumer Product Considerations Convenience Shopping Specialty Unsought Customer buying Frequent Less frequent Strong brand Little product behaviour purchase, little purchase, much preference and awareness or planning, little planning and loyalty, special knowledge, (or, if comparison or shopping effort, purchase effort, aware, little or shopping effort, comparison of little comparison even negative low customer brands on price, of brands, low interest) involvement quality and style price sensitivity Price Low price Higher price High price Varies Distribution Widespread Selective Exclusive Varies distribution, distribution in distribution in convenient fewer outlets only one or a few locations outlets per market area Promotion Mass promotion Advertising and More carefully Aggressive by the producer personal selling targeted advertising and by both producer promotion by personal selling and resellers both producer by producer and and resellers resellers Examples Toothpaste, Major Luxury goods, Life insurance, magazines, appliances, such as rolex blood donations televisions, televisions, watches or fine furniture, clothing furniture, clothing crystal 2. Business products – product bought by individuals and organizations for further processing or for use in conducting a business  Materials and parts: includes raw materials (farm products – wheat, cotton, livestock, fruits, veggies and natural products – fish, lumber, crude petroleum, iron, ore) and manufactured materials and parts (component materials – iron, yarn, cement, wires and component parts – small motors, tires, castings) o most manufactured materials and parts are sold directly to business users o price and service and major marketing factors, branding and advertising are less important  Capital items: business products that aid in the buyer‟s production or operations, including installations (major purchases such as buildings and fixed equipment) and accessory equipment (portable factory equipment and tools – hand tools, lift trucks and office equipment – computers, fax machines, desks)  Supplies and Services: supplies include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms) o Usually purchased with minimum of effort or comparison o Maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, management consulting, advertising) Organization marketing: activities undertaken to create, maintain, or change the attitudes and behaviour of target consumers toward an organization  Corporate image advertising: organizations sponsor corporate image advertising campaigns to market themselves and polish their images Person marketing: activities undertaken to create, maintain or change attitudes or behaviour toward particular people (i.e. Rachel Ray) Place marketing: activities undertaken to create, maintain, or change attitudes or behaviour toward particular places Social marketing: use of commercial marketing concepts and tools in programs designed to influence individuals behaviour to improve their well-being and that of society  Public health campaigns to reduce smoke, alcoholism, drug abuse, environment, etc. Product and Service Decisions Individual Product and Service Decisions Product and service attributes  Product quality: “freedom from defects”, the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs o Total quality management (TQM): approach in which all the company‟s people are involved in constantly improving the quality of products, services and business processes o Two dimensions of a product:  Quality level – support the products positioning  Performance quality – ability of a product to perform its functions  Conformance quality – freedom from defects and consistency I delivering a target level of performance  Product Features – features that customers value highly in relation to costs should be added  Product Style and Design  Style – appearance of a product  Design – the very heart of a product; good design contributes to a product‟s usefulness as well to its looks; shaping the customers product-use experience Branding (can add value to a product)  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 competitors  Helps buyers in many ways: o Helps identify products that might benefit them o Says something about product quality and consistency (same brand, you know what you‟re getting)  Helps seller in many ways: o Brand name becomes basis on which a whole story can be built about a product‟s special qualities o Brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors o Helps segment markets  Toyota: Camry, Prius, Matrix, Yaris Packaging  Involves designing and produc
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