Chapter
11
Products and Services
for Consumers
11.1 product concepts and component
Product Concepts
A product
is a good, service, or idea
- Tangible Attributes
- Intangible Attributes
Product
classification
- Consumer goods
- Industrial goods
Life
Span Based Product Classification
Durable
Non-Durable
Disposable
Product Component Model
SUPPORT SERVICES
COMPONENT
PACKAGING
COMPONENT
Repair and
maintenance




Installation


Brand name


Other related
services


Instructions
Legal

CORE
COMPONENT
Trademark

Product platform
Deliveries
Price


Quality
Warranty
Design features
Functional features


Package

Legal

Spare parts
Styling

Legal
11.2 Global Markets and Product Developmen
domestic
concept
market extension
Domestic Product
extension
multi-domestic market concept
Differentiated products
for each unique market
global
market concept
Global products marketed
worldwide
11.3 Quality
Market-Perceived Quality
Performance Quality
Swiss
“Mad Cow”
France
11.4 Packaging and Green Marketing
Packaging serves three major functions:
protection, promotion, and user convenience.

Package aesthetics must be a consideration i
terms of the promotional role of packaging:
prudent choice of colors and package shapes、
pattern; package size


Green Marketing
4Rs - redesign, reduce,recycle,reuse
11.5 Brands
Bundle
of images and experiences in
the customer’s mind
A promise made by a particular
company about a particular product
A quality certification
Differentiation between competing
products
11.5a Brand Equity
A strong brand is a global marketing asset.
The Most Valuable Brands
RANK
Value
RANK
Value
(billions)
(billions)
1. Coca-Cola
69.9
7. Disney
32.6
2. Microsoft
65.1
8. Ford
30.1
3. IBM
52.8
9. McDonald’s
25.3
4. GE
42.4
10. AT&T
22.8
5. Nokia
35.0
11. Marlboro
22.0
6. Intel
34.7
12. Mercedes
21.7
11.5a Brand Equity
An
asset that represents the value created
by the relationship between the brand and
customer over time.
The
added value that accrues to a product
as a result of investments in the marketing of
the brand.
11.5b Brand Strategies
Global Brands
National Brands
Global/National Brand Mix
Private Brand
Global brands
worldwide
use of:
–name
–sign (logos)
–symbols
‘brand
equity’
–the main asset of some corporations
–use this equity to create worldwide image
(which may proceed products)
e.g. Top 20 Global Brands
Global brands have the same name and
similar image and positioning throughout the wo
 Operated under the same global brand strate
While flexible Marketing combination.
National brand
Brand locally
Importance of nationalistic pride
Be rebuilt as global brand
Global/National Brand Mix
same or different names across borders ?
dual strategy
-Global brand
- many country-specific brands
Example:
Unilever
Nestlé
1.1a Globalization
Jack Welch : 1990s
Globalization
Nestlé
Brand expansion strategy:
- acquiring well-established national brands
- using global brands
brands local but technology global
and people regional
Global/National Brand Mix
 It depends-the market dicates.
‘global brands where possible,
national brands where necessary’
Private brands
private (distributor’s ) brands
– owned by the retailers
– increasingly common in many sectors (supermarkets)
Wal-Mart vs Proctor & Gamble
–who controls channels?
–source of their respective power?
–which brand is better known?
private
brands may enjoy significant
competitive advantages
–higher margins preferred shelf space
–strong in-store promotion
Products and Culture
A product is more than a physical item.
It is a bundle of satisfactions (or utilities)
that the buyer receives.
Cultural Influences: A close study of the
meaning of a product shows to what extent
the culture determines an individual’s
perception of what a product is and what
satisfaction that product provides.
When analyzing a product for a second
market, the extent of adaptation required
depends on cultural differences in product use
and perception between the market the
product was originally developed for and the
new
market.
Irwin/McGraw-Hill
11.6a Innovative Products and Adaptation
product
life cycle and acceptance of
new products
–some examples: telegrams/ telex/ fax
machines/ cellular phones/ e-mail
In
stageⅠof innovation, the technology of a new prod
is newly invented;the new product is really R&D intensi
product;there is no export.
stage Ⅱof technology diffusion, the technology is
mature and the production process becomes standard;
product becomes capital and skilled-labor intensive
product;the innovation country exports to other countri
to satisfy the rapidly increased demands abroad.
In
In
StageⅢ of technology stagnation, the technologica
cycle comes to the end;the product becomes labor
intensive. The less developed countries take the
advantage of low-wage labor and become the main
producers and exporters
1.1a Globalization
Jack Welch : 1990s
Globalization
11.6b Diffusion of Innovations
–starts with new products
–distributed through channels
–over a (variable) time period
–among members of a social system
Three extraneous variables affecting th
rate of diffusion of an object:
– the degree of perceived newness
–The perceived attributes of the innovation
–The method used to communicate the idea
Degree of Newness
Congruent Innovations
-no real change for consumer
Continuous Innovation
- minor variations of existing product
Dynamically Continuous Innovation
- changes in life style
Discontinuous Innovation
- truly new product/ use/ behavior
factors affecting adoption rate
Characteristics of Innovations
 Relative Advantage over older
products

Compatibility

Complexity

Trialability
Observability
(Kellogg is India - ‘breakfast’?)
11.7 Marketing Consumer
Services Globally
Product
- tangible goods
- intangible services
commercial services
11.7a Services Opportunities in
Global Market
Top Consumer Services Exports
1. Tourism
5. Telecommunications
2. Transportation
6. Entertainment
3. Financial Services
7. Information
4. Education
8. Health Care
11.7b Unique Characteristics of
Services
Intangibility; Inseparability;
Heterogeneity; Perishability
• Inseparable in that its creation cannot be
separated from its consumption.
• Heterogeneous in that it is individually produced
and is thus virtually unique.
• Perishable in that once created it cannot be
stored but must be consumed simultaneously
whit its creation.
11.7c Four Barriers That Face Consumer
Services Marketers
1. Protectionism
2. Controls on Transborder Data Flows
3. Protection of Intellectual Property
4. Cultural Requirements for Adaptation