未完 Chapter 7 Product

Marketing: Chapter 7 Chapter 7 Product, Services, and Branding Strategy What is product? Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Broadly defined, products include physical objects, services, events, persons, places, organizations, ideas, or mixes of these entities. Services are a form of product that consists of activities, benefits, or satisfactions offered fro sale that are essentially intangible and do not result in the ownership of anything. Product is a key element in the market offering. Marketing-mix planning begins with formulating an offering that brings value to target customers and satisfies their needs. A company’s market offering often includes both tangible goods and services. To differentiate their offers, beyond simply making products and delivering services, companies are staging marketing, and delivering memorable customer experiences. Experiences are memorable and are personal and take place in the minds of individual consumers. Eg. Entertainment industry. Levels of product and services: each level adds more customer value. The most basic level is the core benefit, which address the question what is the buyer really buying. At the second level, product planners must turn the core benefit into an actual product. They need to develop product and service features, design, a quality level, a brand name, and packaging. Finally, product planners must build an augmented product 延伸产品 around the core benefit and actual product by offering additional consumer services and benefits. When developing products, marketers first must identify the core consumer needs the product will satisfy. They must then design the actual product and find ways to augment it in order to create the bundle of benefits that will provide the most satisfying customer experience. Product and service classifications: products and services fall into two broad classes based on the types of consumers that use them – consumer products and industrial products. Consumer products are products and services bought by final consumers for personal consumption. It include · Convenience products: that consumer usually buys frequently, immediately and with a minimum of comparison and buying effort. · Shopping products选购产品 are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. When buying shopping products and services, consumers spend much time and effort in gathering information and making comparisons. · Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyer is willing to make a special purchase effort. Buyers normally do not compare specialty products; they invest only the time needed to reach dealers carrying the wanted products. · Unsought products. 非渴求产品 are consumer products that the consumer either does not know about or knows about but does not normally think of buying. Most major new innovations are unsought until the consumer becomes aware of them through advertising. Industrial products are those purchased for further processing or for use in conducting a business. The distinction between a consumer product and an industrial product is based on the purpose for which the product is bought. Three groups of industrial products and services include: · Materials and parts include raw materials and manufactured materials and parts. Raw materials consist of farm products and natural products. Manufactured materials and parts consist of component materials and component parts. Most manufactured materials and parts are sold directly to industrial users. Price and service are the major marketing factors; branding and advertising tend to be less important. · Capital items are industrial products that aid in the buyer’s production or operations, including installations and accessory equipment. · Supplies and services. In resent years marketers have broadened the concept of a product to include other market offerings – organizations, persons, places, and ideas. Organization often carry out activities to sell the organization itself. Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization. Corporate image advertising is a major tool companies use to market themselves to various publics. People can also be thought of as products. Person marketing consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people. Place marketing involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places. Ideas can also be marketed. In one sense, all marketing is the marketing of an idea. We narrow our focus to the marketing of social ideas. This area has been called social marketing, defined by the social marketing institute as the use of commercial marketing concepts and tools in programs designed to individuals’ behavior to improve their well-being and that of society. Marketers make product and services decisions at three levels: 1. individual product decisions · product attributes · Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by product attributes such as quality, features, and style and design. Product quality is one of the marketer’s major positioning tools. Quality has a direct impact on product or service performance; thus it is closely linked to customer value and satisfaction. In the narrowest sense, quality can be defined as “freedom from defects” 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 process. Product quality has two dimensions —— level and consistency. In developing a product, the marketer must first choose a quality level that will support the product’s position in the target market. Here, product quality means performance quality – the ability of a product to perform its functions. High quality also can mean high levels of quality consistency. Here, product quality means conformance quality – freedom from defects and consistency in delivering a targeted level of performance. Features are a competitive tool for differentiating the company’s product from competitors’ products. Being the first producer to introduce a needed and valued new feature is one of the most effective ways to compete. Another way to add customer value is through distinctive product style and design. Design is a larger concept than style. Style simply describes the appearance of a product. It does not necessarily make the product perform better. Design is more than skin deep – it goes to the very heart of a product. Good design contributes to a product’s usefulness as well as to its looks. Perhaps the most distinctive skill of professional marketers is their ability to create, maintain, protect and enhance brands of their products and services. · Branding: Brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service. Consumer view a brand as an important part of a product, and branding can add value to a product. · Packaging involves designing and producing the container or wrapper for a product. Traditionally, the primary function of the package was to contain and protect the product. In recent years, numerous factors have made packaging an important marketing tool. Increased competition and clutter on retail store shelves means that packages must now perform many sales tasks. —— from attracting attention, to describing the product, to making the sale. Companies are realizing the power of good packaging to create instant consumer recognition of the company or brand. Innovative packaging can give a company an advantage over competitors. Poorly designed packages can cause headaches for consumers and lost sales for the company. In recent years, product safety has also become a major packaging concern. We have all learned to deal with hard-to-open “childproof” packages. · Labeling: Lebels perform several functions. At the very fast, the label identifies the product or brand, such as the name. It might also describe several things about the product – who made it, where it was made, when it was made, its contents, how it its to be used, and how to use if safely. Finally the label might promote the product through attractive graphics. · Product support services: the first step is to survey customers periodically to assess the value of current services and to obtain ideas for new ones. Once the company has assessed the value of various support services to customers, it must next assess the costs of providing these services. It can then develop a package of services that will both delight customers and yield profits to the company. 2. Product line decisions A product line is a group of products that are closely related because they function 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. The major product line decision involves product line length – the number of items in the product line. The line is too short if the manager can increase profits by adding items; the line is too long if the manager can increase profits by dropping items. The company must manage its product lines carefully. Product lines tend to lengthen over time, and most companies eventually need to prune unnecessary or unprofitable items from their lines to increase overall profitability. Product line length is influenced by company objectives and resources. A company can lengthen its product line in two ways; by line stretching or by line filling. Product line stretching occurs when a company lengthens its product line beyond its current range. The company can stretch its line downward, upward, or both ways. Companies located at the upper end of the market can stretch their lines downward. A company may stretch downward to plug a market hole that otherwise would attract a new competitor or to respond to a competitor’s attack on the upper end. Or it may add low-end products because it finds faster growth taking place in the low-end segments. Companies at the lower end of a market can stretch their product lines upward. Sometimes, companies stretch upward in order to add prestige to their current products. Or they may be attracted by a faster growth rate or higher margins at the higher end. Companies in the middle range of the market may decide to stretch their lines in both directions. An alternative to product line stretching is product line filling – adding more items within the present range of the line. There are several reasons for product line filing: reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors. 3. Product mix decision A product mix (or product assortment) consist of all the product lines and items that a particular seller offers for sales. A company’s product mix has four important dimensions: width, length, depth and consistency. Product mix width refers to the number of different product lines the company carries. Product mix length refers to the total number of items the company carries within its product lines. Product line depth refers to the number of versions offered of each product in the line. The consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. These product mix dimensions provide the handles for defining the company’s product strategy. The company can increase its business in four ways. It can add new product lines, widening its product mix. In this way, it new lines build on the company’s reputation in its other lines. The company can lengthen its existing product lines to become a more full-line company. Or it can add more versions of each product and thus deepen its product mix. Finally, the company can pursue more product line consistency – or less – depending on whether it wants to have a strong reputation in a single field or in several fields. Branding strategy: Building Strong Brands