Marketing Management Ch 4

8/12/2019 Marketing Management Ch 4

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Dr. Karim KobeissiIslamic University of

Lebanon - 2014


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Chapter 4 : he !ro"#ct


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$ h a t i s a ! r o " # c t %

Anything that can be ofered to a market or attention,

acquisition, use, or consumption that might satisy a

want or need.

Includes:

-Goods

- er!ices

- "ersons

- "laces

- #rgani$ations

- Ideas


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&hree 'e!els # "roduct

(.%ore bene)t le!el* thecustomers purchase a

product because o theunctional bene)t theproduct ofers.

+. Actual "roduct le!el* theytake into account how theproducts attributes,eatures, quality, styling,packaging.

. Augmented "roduct le!el*

customers consider the!alue they recei!e rom a!endor ater sales support,warranty, promise o reedeli!ery or installation.


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"roduct as a Good

&oo"sare items that

can be seen and

touched, such as

books, shoes, cars,

and drills.

&oo"s result in


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"roduct as a er!ice

Although ser!ices are /products in a general sense, they

ha!e special characteristics and marketing needs. &he

biggest diferences come rom the act that they are

created through direct interaction with customers.

' ()*+IC) D,)( , *)(UL I ,$)*(I!.


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&he 0ature and %haracteristics o a er!ice

A company must consider our special ser!ice

characteristics when designing marketing

programs:

(1 Intangibility

+1 Inseparability

1 2ariability

31 "erishability


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&he 0ature 4 %haracteristics o a er!ice

1/ (ervice intanibility means that services cannot

be seen taste" felt hear" or smelle" before theyare bo#ht.

5or e6ample, people undergoing cosmetic surgery cannot

see the result beore the purchase. Airline passengersha!e nothing but a ticket and a promise that they andtheir luggage will arri!e saely at the intendeddestination, hopeully at the same time. &o reduceuncertainty, buyers look or 7signals8 o ser!ice quality.

&hey draw conclusions about quality rom the place,people, price, equipment, and communications that theycan see.

&hereore, the ser!ice pro!iders task is to make theser!ice tan ible in one or more wa s and send the ri ht


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)vi"ence anaement at 'tlantis otel- D#bai


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2/ (ervice inseparability means that services

cannot be separate" from their provi"ers 3hether

the provi"ers are people or machines. I a ser!ice

employee pro!ides the ser!ice, then the employee

becomes a part o the ser!ice. 9ecause the customer is

also present as the ser!ice is produced, provider-

customer interaction is a special eature o ser!ices

marketing.9oth the pro!ider and the customer afect the


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(ervice Inseparability


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/ (ervice variability means that the 5#ality of

services "epen"s on 3ho provi"es them as 3ell as

3hen 3here an" ho3 they are provi"e".

5or e6ample, some hotelssay, ;arriottha!e

reputations or pro!iding better ser!ice than others. till,

within a gi!en ;arriott hotel, one registration-counter

employee may be cheerul and e!en the quality o a single ;arriott employees

ser!ice !aries according to his or her energy and rame o

mind at the time o each customer encounter.


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(ervice +ariability


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4/ (ervice perishability means that services cannot

be store" for later sale or #se.

&he perishability o ser!ices is not a problem when demand

is steady. ?owe!er, when demand @uctuates, ser!ice )rms

oten ha!e di


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(ervice !erishability


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&y p e s o " ro d u c t s&he classi)cation o products is essential to

business because it pro!ides one o the actors

or determining the strategies needed to mo!e

them through the marketing system. &he two

ma=or classes are I1 consumer products and II1

business products.


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I. %onsumer "roducts%onsumer products are products purchased or

personal, amily, or household use. &hey are oten

grouped into our subcategories on the basis o

consumer buying habits:

(1 %on!enience products

+1 hopping products

1 pecialty products

31 Bnsought products


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%onsumer "roducts


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II. 9usiness C Industrial "roducts9usiness products are products that companies

purchase to produce their own products or to

operate their business. Bnlike consumerproducts, business products are classi)ed onthe basis o their use rather than customerbuying habits. &hese products are di!ided intosi6 subcategories:

(1 Installations

+1 Accessory >quipment

1 Daw ;aterials

31 %omponent "arts and "rocessed ;aterials

E1 ;aintenance, Depair, and #perating upplies

F1 9usiness er!ices

(1 I ll i


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(1 Installations

Installations are ma=or capital items

that are typically used directly in

the production process o products.

ome installations, such as

con!eyor systems, robotics

equipment, and machine tools, are

designed and built or speciali$ed

situations. #ther installations, such

as stamping machines, large

commercial o!ens, and

computeri$ed a6ial tomography

scan machines, are built to a

standard design but can be

modi)ed to meet indi!idual

requirements.


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+1 Accessory >quipment

"roducts that all into the subcategory

o accessory equipment are less

e6pensi!e and ha!e shorter li!es

than installations. >6amples

include hand tools, computers,

desk calculators, and orklits.

hile some types o accessory

equipment, such as hand tools, are

in!ol!ed directly in the production

process, most are only indirectly

in!ol!ed.


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1 Daw ;aterials

Daw materials are products that are

purchased in their raw state orthe purpose o processing them

into consumer or business

products. >6amples are iron ore,

crude #I', diamonds, copper,timber, wheat, and leather. ome

e.g., wheat1 may be con!erted

directly into another consumer

product cereal1. #thers e.g.,

timber1 may be con!erted into an

intermediate product lumber1 to

be resold or use in another

industry construction1.


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31 %omponent "arts and "rocessed ;aterials

%omponent parts are items that are

purchased to be placed in the )nal

product without urther processing.

"rocessed materials, on the other

hand, require additional processing

beore being placed in the end

product. ;any industries, including

the auto industry, rely hea!ily on

component parts. Automakers use

such component parts as batteries,sunroos, windshields, and spark

plugs. &hey also use se!eral

processed materials, including

steel and upholstery abric.


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E1 ;aintenance, Depair, and #perating upplies

;aintenance, repair, and operating

;D#1 supplies are requently

purchased e6pense items. &hey

contribute indirectly to the

production o the end product or

to the operations o the

business. ;D# supplies include

computer paper, light bulbs,

lubrication oil, cleaning supplies,

and o


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F1 9usiness er!ices

9usiness ser!ices reer to the ser!ices

purchased by companies to assist

in the operation o the )rm. &hey

include )nancial, marketing

research, promotional, legal, and

=anitorial ser!ices. &he decision to

hire an outside business to perorm

needed ser!ices is oten predicated

on how requently the ser!ice is

needed, the speciali$ed knowledge

required, and the relati!e costs o

pro!iding the ser!ice internally

!ersus contracting with an outside

)rm.


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9 di


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9randing

' bran" is a name term sin symbol

"esin or a combination of these

that i"enti6es the pro"#cts or

services of one seller or ro#p of

sellers an" "i7erentiates them from

those of competitors.

A brand name carries many associations in

peoples minds that make up its image.


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!ac8ain


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!ac8ain!ac8ain refers to the activities of "esinin

an" pro"#cin the container or 3rapper for apro"#ct. &raditionally, the primary unction o the

package was to hold and protect the product. In

recent times, howe!er, numerous actors ha!e made

packaging an important marketing tool as well.

Increased competition and clutter on retail store

shel!es means that packages must now perorm

many sales tasksrom attracting attention, to

describing the product, to making the sale.


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'abeling


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'abelingLabels rane from simple tas attache" to

pro"#cts to comple9 raphics that are part

of the pac8ain. &hey perorm se!eral

unctions. At the !ery least, the label identifes

the product or brand. &he label might also help

to promote the brand, support its positioning,

and connect with customers. For many

companies, labels ha!e become an important

element in broader marketing campaigns.


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"roduct - upport er!ices


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"roduct upport er!ices

tep (. ur!ey customers to determine

satisaction with current ser!ices and anydesired new ser!ices.

tep +. Assess costs o pro!iding desired

ser!ices.

tep . He!elop a package o ser!ices todelight customers and yield pro)ts.

Companies should design its support services to profitably

meet the needs of target customers.

How?


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9rand trategy


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9rand trategy

'ine >6tension >6isting brand names e6tended to new orms,

si$es, and @a!ors o an e6isting productcategory.

9rand >6tension

>6isting brand names e6tended to new productcategories.

;ultibrands 0ew brand names introduced in the same

product category. 0ew 9rands

0ew brand names in new product categories.


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Product Line Decisions



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Product Line LengthNumber of Items in the Product Line

Product Line LengthNumber of Items in the Product Line

Product Line DecisionsProduct Line Decisions

StretchingLengthen beyond

current range

illingLengthen within

current range

!ownward

"pward



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Product Line DecisionsA company lengthens its product line in two ways: by line

stretching and line )lling.

Line stretchin occ#rs 3hen a company lenthens its pro"#ct line beyon" its c#rrent

cateory:

a.Do3n-mar8et (tretch: a company positioned in the middle market may want to introduce a

lower price line i.e. ;ercedes successully introduced its %-%lass cars at J.JJJ without in=uring

its ability to sell other ;ercedes cars or (JJ.JJJ and up.

b.Up-mar8et (tretch: a company enters the high social class segment or more market growth,

higher margins, as ull line manuacturers e.g. &oyota 'e6us.

c.3o-3ay (tretch: a company ser!ing the middle market might decide to stretch their line in

both lower and high social class i.e. ?oliday Inn orldwide perormed )!e diferent segments Kthe upscale %rown "la$a, the traditional ?oliday Inn, the budget ?oliday Inn >6press, and the

business-oriented ?oliday Inn elect and ?oliday Inn uites

. Line 6llin occ#rs 3hen a company a""s more items 3ithin the present cateory. &he

moti!es are to o!ercome the missing items in the line, reach the incremental pro)ts, utili$e

e6cess capacity, plug holes to keep out competitors.

Hown market tretch


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Hown-market tretch:;ercedes

(- Class C - Class

?ead 4 houlders 'ine 5illing


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?ead 4 houlders 'ine 5illing

"roduct ;i6 4 "roduct 'ine


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"roduct ;i6 4 "roduct 'ine

!ro"#ct i9: All the products a gi!en

company produces orm the product mi6.

!ro"#ct Line : A product line would be a

group o these products associated by

category or unction1. A company could

ha!e one line or se!eral lines, but all the

products within this line or lines would

orm the "roduct ;i6.


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"roduct 'ine Hepth 4 "roduct ;i6 idth


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"roduct 'ine Hepth 4 "roduct ;i6 idth

!ro"#ct Line Depth: the number o

products items in a speci)c product line.

!ro"#ct i9 $i"th: &he number o

product lines an organi$ation ofers.


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ene6ts of Increasin !ro"#ct i9 $i"th


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ene6ts of Increasin !ro"#ct i9 $i"th

Marketing Management Ch 4

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