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    Bmgt 411 week_7.key Bmgt 411 week_7.key Presentation Transcript

    • BMGT 411: Week 7 Kotler Chapter 10, 11, 12 Wood Chapters 4, 7 1
    • BMGT 411: Chapter 10 Marketing Through the Life Cycle 2
    • Ford Fiesta Blogger Test Drive Page 143 3
    • Chapter Questions • What are the characteristics of products and how do marketers classify products? • How can companies differentiate products? • How can a company build and manage its product mix and product lines? • How can companies use packaging, labeling, warranties, and guarantees as marketing tools? • What strategies are appropriate for new product development and through the product life cycle? 4
    • What is a Product? • A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. • Examples: Starbuck’s 3rd Place. The place between someone’s work and home. Starbuck’s coffee is a product, but the Starbuck’s experience is a product as well, and include comfortable cafe’s, free wifi, and service that is beyond typical fast food and beverage. 5
    • Figure 10.1 Five Product Levels Page 144 6
    • Five Product Level Example: Kohl’s • Core Benefit: Clothes • Basic Product: Clothing and home goods in a variety of styles and sizes • Augmented Product: Clothing and home goods, with weekly and seasonal specials, customers will get excited about savings • Potential Product: Any future updates Kohl’s would do in the future to exceed customer expectations (More online offerings, same day shipping, etc) 7
    • Product Classification Schemes Page 145 Durability Tangibility Use 8
    • Product Classifications Nondurable goods: tangible goods consumed in one or a few uses. Large availability, smaller markups, induce trial and build preference 9
    • Product Classifications Durable goods: tangible goods like appliances that survive many uses, higher margins, more service required, and also require more seller guarantees 10
    • Product Classifications Services: intangible, inseparable, variable products that require more quality control, credibility, and adaptability 11
    • Consumer Goods Classifications • Convenience Goods: Purchased frequently,, and with minimal effort (often self service) • Ex: Soft Drinks • Shopping Goods: Consumers compare on the basis of suitability, price, and style • Ex. Appliance • Speciality Good: Unique characteristics or brand identification for which enough buyers make a special purchasing effort • Ex. Cars • Unsought Goods: Needs, that the customer does not normally think about buying • Ex. Smoke detectors, first aid kits 12
    • Industrial Goods Classification • Materials and parts: Go into the final finished product • Ex. Wheat delivered to make cereal • Capital items: Equipment to make final product • Ex. Oven to roast cereal • Supplies/business services: Short term items that help making the final product, like office supplies and consulting fees 13
    • Product Differentiation • Product form • Features • Customization • Performance • Conformance • Durability • Reliability • Repairability • Style 14
    • Product Differentiation Form: Products size, shape, or physical structure 15
    • Product Differentiation Features: Supplement the products basic function, often deployed to users in regular cycles, to increase upgrades and excitement in the product 16
    • Product Differentiation Customization: A company meets each customers requirements on a mass basis, by individually designing products, services, or programs. 17
    • Product Differentiation Style: The look and feel of a product to a buyer. Often a key item in creating demand for a product. Style often depends on target market being sought. 18
    • Service Differentiation • Ordering ease • Delivery • Installation • Customer training • Customer consulting • Maintenance and repair • Returns 19
    • Zappos.com • Differentiation is based on service: • Ease of ordering • Customer service • Ease of returns 20
    • Product-Mix Pricing • Product-line pricing: Varying prices in a line of products: Ex. Soda • Optional-feature pricing: Price of product plus options: Ex. Cars • Captive-product pricing: Introduction products and the price of ancillary or captive products: Ex. Razors, Low intro price, and high price of blades • Two-part pricing: Fixed fee plus variable pricing: Ex. Cell Phone + Data Plans • By-product pricing: Price of by products in the production of the main product: Ex. Meats • Product-bundling pricing: Price for a bundle of products or service: Ex. Comcast Triple Play 21
    • Ingredient Branding Creating brand equity for the materials or components inside of a finished product, to increase demand and create higher margins based on perceived quality 22
    • • Packaging, sometimes called the 5th P, is all the activities of designing and producing the container for a product • Sometimes, packaging is just as important as the product itself • Packaging is the customers first experience with the product • It must identify the brand, convey descriptions and persuasive information, facilitate product transportation, and aid in product consumption • Can you think of any iconic brand packaging? 23
    • Altoids Packaging 24
    • Mio Packaging 25
    • Tropicana Packaging 26
    • New Product Development Process 27
    • Ways to Find Great New Ideas • Run informal sessions with customers • Allow time off for technical people to putter on pet projects • Make customer brainstorming a part of plant tours • Survey your customers • Undertake “fly on the wall” research to customers • Social Media Crowd sourcing: Gathering popular ideas directly from customers 28
    • Concept Testing Concept Testing: Who will use this product? What benefit will it provide? When will they use it? • Need level • Perceived value • Purchase intention • User targets, purchase occasions, purchasing frequency 29
    • Prototype Testing • Alpha testing: Testing within the firm • Beta testing: Testing with a group of customers • Market testing: Testing in a few markets to gauge customer acceptance, sales forecasts, identify any logistic issues 30
    • True Runner (Dick’s Sporting Goods) Concept: Shady Side 31
    • True Runner (Dick’s Sporting Goods) Cranberry Township, PA 32
    • What is Adoption? Adoption is an individual’s decision to become a regular user of a product. 33
    • Stages in Adoption Process Awareness Interest Evaluation Trial Adoption 34
    • Figure 10.4 Adopter Categorization on the Basis of Relative time of Adoption Technology is speeding up the life cycles 35
    • Figure 10.4 Adopter Categorization on the Basis of Relative time of Adoption Technology is speeding up the life cycles 36
    • Product Life Cycle Marketing • Introduction and Innovator Stage: High marketing costs and low profit, due to getting awareness out to customers and driving trial • Growth: Improve quality, reduce cost, add features to maximize profitability. Can become a market leader in this stage, increasing profitability in the maturity stage • Maturity: Longest section of life cycle. This is where targeted marketing takes over from broad based marketing to increase users at a reduced marketing cost. • Decline: Choice to let the brand die, or innovate to create a new product or service based on new needs, technology, etc. Declining products should not be invested in unless it is to be relaunched 37
    • Wigle Whiskey • What is the product of Wigle Whiskey? • Is is a good? Or an experience? • What stage of the life cycle is Wigle in? • Who should it target at this stage to grow? 38
    • BMGT 411: Chapter 11 Designing and Managing Services 39
    • Chapter Questions? • How do we define and classify services and how do they differ from goods? • What are the new services realities? • How can we improve service quality? • How can goods marketers improve customer support services? 40
    • What is a Service? A service is any act of performance that one party can offer another that is essentially intangible and does not result in the ownership of anything; its production may or may not be tied to a physical product. 41
    • Services are Everywhere • Think of some companies that provide a service • What do they provide? • How is success measured? • Where is the service delivered? 42
    • Categories of Service Mix • Pure tangible good: A tangible good with no accompanying service provided • Ex: Toothpaste • Good with accompanying services: A good that is accompanied by one or more service • Ex. smartphone (good) with data plan (service) • Hybrid: An offering with equal parts goods and services • Ex. Restaurant or Grocery Store 43
    • Categories of Service Mix • Major Service with Accompanying minor Goods or Service: A major service with additional services or goods • Ex. Airline Service with Drink Service during flight • Pure Service: Primarily an intangible service being provided, with no goods included • Ex. Dentists, Childcare, etc 44
    • Figure 11.1 Continuum of Evaluation for Different Types of Products 45
    • Qualities of Goods and Services • Search Qualities: The buyer can usually evaluate even before purchases and compare • Ex. Clothing, Food, etc • Experience Qualities: Characteristics the buyer can evaluate after it is purchased • Ex. Haircut, Vacations • Credence Qualities: The buyer can find it hard to evaluate even after consumption • Ex. Auto Repair, Dental Work, Medical 46
    • Distinctive Characteristics of Services Intangibility Inseparability Variability Perishability 47
    • Intangibility • Services cannot be seen, tasted, felt, heard, or smelled • Service firms try to demonstrate their service by physical evidence • Ex. Colleges will publish employment statistics, etc to make the intangible seem tangible 48
    • Inseparability • Services are usually produced and consumed simultaneously vs goods produced elsewhere • Provider/Client interaction is a special feature of service marketing • More training may be involved to make customer service outstanding since it is so visible 49
    • Variability • Services are highly variable because the quality depends on who provides them • Good hiring and training (Starbucks) • Standardize service performance (Zappos) • Monitor customer satisfaction (Most retailers) 50
    • Perishability • Services cannot be stored, so perishability can be a problem when demand fluctuates • Off- Peak Pricing (Sonic Happy Hour) • Cultivating non-peak demand (McDonald’s Breakfast) • Offering complimentary services as alternatives (ATM Banking Vs. Tellers) 51
    • New Service Realities • Customer Empowerment: Social Media has enabled customers to broadcast a bad experience to a very wide audience • Most companies have their customer service departments monitoring social media for negative feedback, and responding almost instantly • Led by @comcastcares and @frankelliason 52
    • Figure 11.2 Root Causes of Customer Failure 53
    • • Redesign processes and redefine customer roles to simplify service encounters • Incorporate the right technology to aid employees and customers • Create high-performance customers by enhancing their role clarity, motivation, and ability • Encourage customer citizenship where customers help customers Solutions to Customer Failures 54
    • Best Practices in Service Companies • Strategic Concept: Customer service is behind everything the company does • Top-Management Commitment: Management commitment to putting service performance along with financial performance as a quality metric • High Standards: Setting very high quality standards to avoid the most customer disruptions • Ex. a 98% errors rate with an electrical supplier would result in no electricity for 8 days 55
    • Best Practices in Service Companies • Self-Service (Better Options) Technologies: Providing customers with different levels of comfort to use technology to increase service (Airline self check in, grocery store self-checkout, ATMs, Online Banking) • Profit Tiers: Customizing service levels based on profitability of the customers • Ex. AMEX Black Card, Lincoln Concierge • Monitoring Systems • Satisfying Customer Complaints 56
    • Figure 11.3: Service Quality Model 57
    • • Gap between consumer expectation and management expectation • The customer may want something entirely different than what is being delivered • Gap between management perception and service quality specification • Ex: Being very clear on specifications, speed in minutes, etc • Gap between service quality specifications and service delivery • Often a result of poor training Managing Customer Expectations 58
    • • Gap between service delivery and external communications • Ex. Toys R Us Foursquare Check in Discount • Gap between perceived service and expected service • Occurs when the customer misperceives the service quality Managing Customer Expectations 59
    • Determinants of Service Quality 1.Reliability 2.Responsiveness 3.Assurance 4.Empathy 5.Tangibles 60
    • Chapter 7: Marketing Plan Handbook • What pricing strategy would you recommend for Wigle? • Is they way you are positioning the product affect the pricing strategy? • Is the stage of the lifecycle affect your pricing recommendation? 61
    • BMGT 411: Preparing for Week 8 • Test #2 • Chapters 5-11 Kotler • Wood Material will not be covered in test #2 • Project Check in - You should be pretty far along • Read Kotler Chapters 12, Wood Chapter 7 62