Topic Seven: creating marketing offers(1)
Objectives
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Product Characteristics
Building & Managing the Product Mix & Product Lines
Brand Decisions
Packaging & Labeling
Product life cycle
Developing new product
Service
Components of the Market Offering
Value-based prices
Attractiveness of
the market offering
Product features
and quality
Services mix
and quality
Five Product Levels
Potential product
Augmented product
Expected product
Basic product
Core benefit
Consumer-Goods Classification
Convenience Products
Buy frequently & immediately
> Low priced
> Many purchase locations
> Includes:
• Staple goods
• Impulse goods
• Emergency goods
Specialty Products
Special purchase efforts
> Unique characteristics
> Brand identification
> Few purchase locations
Shopping Products
Buy less frequently
> Gather product information
> Fewer purchase locations
> Compare for:
• Suitability & Quality
• Price & Style
Unsought Products
New innovations
> Products consumers don’t
want to think about.
>Require much advertising &
personal selling
Product Mix
Width - number of
different product lines
Length - total number
of items
within the lines
Depth - number of
versions of each
product
Product Mix all the product
lines offered
Product-Line Length
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Line Stretching
– Downmarket
– Upmarket
– Two-way
Line Filling
Line Modernization
Line Featuring & Line Pruning
Two-Way Product-Line Stretch: Marriott Hotels
Quality
Economy
Standard
Good
Marriott
Marquis
(Top
executives)
Price
High
Above
average
Marriott
(Middle
managers)
Courtyard
(Salespeople)
Average
Low
Superior
Fairfield Inn
(Vacationers)
What is a Brand?
User
Culture
Attributes
Personality
Benefits
Values
Brand
Equity
Devoted
to Brand
Values the Brand
(brand as friend)
Satisfied & Switching Cost
Satisfied Customer
(no reason to change)
No Brand Loyalty
(customer will change)
An Overview of
Branding Decisions
Branding
Decision
BrandSponsor
Decision
•Manufacturer
brand
•Brand
•No brand
•Distributor
(private)
brand
•Licensed
brand
BrandName
Decision
BrandStrategy
Decision
•Individual
brand
names
•Blanket
family
name
•Separate
family
names
•Companyindividual
names
•Line
extension
•Brand
extension
•Multibrands
•New
brands
•Cobrands
BrandRepositioning
Decision
•Repositioning
•No
repositioning
Brand Strategies
Product Category
Brand Name
Existing
New
Existing
Line
Extension
Brand
Extension
New
Multibrands
New
Brands
Good Brand Names:
Lack Poor
Foreign
Language
Meanings
Distinctive
Suggest
Product
Qualities
Suggest
Product
Benefits
Easy to:
Pronounce
Recognize
Remember
Why Package Crucial as a Marketing
Tool
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Self-service
Consumer affluence
Company & brand image
Opportunity for innovation
Labels
Promote
Describe
Identify
Sales & profits ($)
Sales & Profit Life Cycles
Introduction
Growth
Maturity
Time
Decline
Four Introductory
Marketing Strategies
Promotion
High
High
Low
Rapidskimming
strategy
Slowskimming
strategy
Rapidpenetration
strategy
Slowpenetration
strategy
Price
Low
Maturity Stage
• Market Modification
• Product Modification
• Marketing-Mix Modification
Decline Stage
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Decrease investment
Resolve uncertainties - stable investment
Selective niches
Harvesting
Divesting
Market Evolution
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Emergence
Growth
Maturity
Decline
Why New Products Fail
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“Over Championing”
Overestimated Demand
Poor Design
Poor Marketing Execution
High Development Costs
Strong Competitive Reaction
Challenges in NPD
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Idea Shortage
Fragmented Markets
Social & Governmental Constraints
Cost
Capital Shortage
Need for Speed
Shorter Product Life Cycles
New Product Development Process
Marketing
Strategy
Development
Concept
Development
and Testing
Idea
Screening
Idea
Generation
Business
Analysis
Product
Development
Market
Testing
Commercializat
ion
Probability of Success
Overall
probability
of success
=
Probability
of technical
completion
X
Probability of
commercialization
given technical
completion
Probability of
economic
success given
commercialization
X
Concept Development & Testing
1. Develop Product Ideas into
Alternative Product Concepts
2. Concept Testing - Test the Product
Concepts with Groups of Target Customers
3. Choose the Best One
b) Brand-positioning
map
(instant breakfast market)
Expensive
High price/oz.
Pancakes
Hot
cereal
Instant
breakfast
Inexpensive
Brand C
Brand B
Brand A
Low price/oz.
High in calories
Bacon
and
eggs
Cold
cereal
Low in calories
(a) Product-positioning
map
(breakfast market)
Quick
Slow
Product & Brand Positioning
Consumer-Goods Market Testing
Simulated
Test Market
Controlled
Test Market
A few stores that have
Test in a simulated
agreed to carry new
shopping environment
products for a fee.
to a sample of
consumers.
SalesStandard
Wave
Test Market
Research
Test offering trail to
a sample of
consumers in
successive
periods.
Full marketing campaign
in a small number of
representative cities.
Commercialization
Whom
Product
Price
Place
Promotion
When
Where
Adopter Categorization of the Basis of Relative Time of
Adoption of Innovations
34%
Early
majority
2 1/2%
Innovators
13 1/2%
Early
adopters
34%
Late
majority
16%
Laggards
Time of adoption innovations
Characteristics of the Innovation Rate of
Adoption
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Relative advantage
Compatibility
Complexity
Divisibility
Communicability
Categories of Service Mix
Pure
Tangible
Good
Tangible
Good
w/
Services
Hybrid
Major
Service
w/ Goods
Pure
Service
Service characteristics
Intangibility
Inseparability
Services cannot
be separated
from their
providers
Services cannot
be seen, tasted,
felt, heard, or
smelled before
purchase
Services
Variability
Quality of
services depends
on who provides
them and when,
where, and how
Perishability
Services cannot
be stored for
later sale or use
Overcoming service challenges
Inseparability
Increase
productivity of
providers
Intangibility
Use cues to
make it tangible
Services
Variability
Standardize
service
production
& delivery
Perishability
Match supply
and demand
Three Types of Marketing
in Service Industries
Company
External
marketing
Internal
marketing
Cleaning/
maintenance
services
Employees
Financial/
banking
services
Interactive
marketing
Restaurant
industry
Customers
Service Differentiation
Offer
Delivery
Image
Determinants of Service Quality
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Reliability
Responsiveness
Assurance
Empathy
Tangibles
Service
Excellence
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Strategic Concept
Top-Management Commitment
High Standards
Monitoring Systems
Satisfying Customer Complaints
Satisfying Both Employees & Customers
Managing Productivity
Importance-Performance Analysis
Extremely important
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B. Keep up the good work
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Excellent performance
Fair performance
A. Concentrate here
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C. Low priority
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D. Possible overkill
Slightly important
# = Attributes
Service marketing mix
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4P’s
People
Process
Physical evidence