Product and Service ManagementPresentation Transcript
Exploring Product/Service Management
Competitive AdvantagePositioning Brand Extension • A marketing tool in which a company will develop a new product as a “spinoff” or “line extension” of a well known product. • Examples would be – Mr. Clean Mr. Clean Magic Eraser – Clorox Clorox Pen – Kool Aid Kool Pops
Competitive AdvantagePositioning • Why would a business expand its product mix? – To provide a wider selection of products to customers hoping to increase business. • Product width – how many different types of products are • Product depth – how many different types of one product is there.Width of product – How many Pepsi Depth of product – How many types products are there? of Mt Dews are there.
Competitive AdvantagePositioning How will you “beat” your competition? You will need to get an “advantage” over your competition that your customers will trust. A competitive advantage is an advantage over competitors gained by : 1. Offering consumers greater value, either by means of lower prices or 2. providing greater benefits and service that justifies higher prices.Will customers pay the higher price at your business because your service is better?
POSITIONING is how your target market (customer) defines you (your business) in relation to your competitors.PositioningPurpose of PositioningThe purpose of positioning is to make yourproduct or service stand out in a crowd.Positioning is important because you are• competing with all the noise out there competing for your potential customers’ attention.• If you can stand out with a unique benefit, you have a chance at getting their attention.
Examples of PositioningPositioning I might drive by 3 gas stations to buy gas because I get better gas mileage on the gas at that station. The product makes me continue to go there. Clothes might be more expensive at this store, they offer free alterations, gift wrapping, and easy returns. I will pay the extra price for the service. I love coupons. I would drive extra miles to get “triple” coupons.
“THOUGHT”Positioning• A company may view itself and see its products in a different way than customers or potential customers view the products.• This would lead to failure to the business.• Can you think of an example???
Why Positioning is ImportantPositioning• When positioning your product/service, it is important to focus on how your target market (customers) perceives you. After all, the target market makes up those consumers that are most likely to purchase your product/service.• Key tip: you can never make everyone happy, but you must make your target market happy in order for your business to survive.
Relationship Between Competition and PositioningPositioning Is our product the first in its market? If not, how are our competitors positioned? Do we have enough money to position our product/service similarly to the market leader and thus take over as the market leader? If not, we must find an unoccupied position in the market that the target market cares about.Example: Target was certainly not the first mass merchandiser, but it was the first to successfully position itself as the “trendy, hip mass merchandiser” in the eyes of its target market. www.target.com
Positioning Strategies Positioning• There are seven positioning strategies that can be pursued:• Product Attributes: What are the specific product attributes?• Benefits: What are the benefits to the customers?• Usage Occasions: When/how can the product be used?• Users: Identify a class of users.• Against a Competitor: Positioned directly against a competitor.• Away from a Competitor: Positioned away from competitor.• Product Classes: Compared to different classes of products.
Marketing Mix and PositioningPositioning • Each of the 4 P’s should be examined as potential tactics for differentiating your product/service and reinforcing its positioning in the minds of the target market. For example, Krispy Kreme doughnuts were originally available to consumers only at Krispy Kreme bakeries. In the early 2000’s, the company decided to alter its distribution (Place) strategy to include supermarkets and gas stations. While that decision radically increased sales potential by www.krispykremem.com making the product available to more consumers, it also changed how the target market perceived the Krispy Kreme brand.
Marketing Mix and PositioningPositioning • Think about it: Do you view a sandwich that you buy at a gas station differently from a sandwich that you purchase at a restaurant?
How the 4 P’s Affect Product/Service PositioningPositioningProduct/ServiceWhat does the customer want from the product/service? What needs does it satisfy?How and where will the customer use it?How is it differentiated versus your competitors’ products/services? www.picklebarrelme.com
How the 4 P’s Affect Product/Service PositioningPositioning Place Where do buyers look for your product or service? they look in a store, what kind? A specialist boutique or in a If supermarket, or both? Or online? Or direct, via a catalogue? How can you access the right distribution channels? you need to use a sales force? Or attend trade fairs? Or make Do online submissions? Or send samples to catalogue companies? What do your competitors do, and how can you learn from that and/or differentiate what you do from them? Would you pay more for someone to pump your gas and clean your windshield??
How the 4 P’s AffectPositioning Product/Service PositioningPrice• What is the value of the product or service to the buyer?• there established price points for products or services in this Are area?• the customer price sensitive? Will a small decrease in price gain Is you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin?• What discounts should be offered to trade customers, or to other specific segments of your market?• How will your price compare with your competitors? How far will you drive to fine the best price!!
How the 4 P’s AffectPositioning Product/Service Positioning PromotionWhere and when can you get across your marketing messages to your target market?Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using direct mail? Through PR? On the Internet?When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent promotions?How do your competitors do their promotions? And how does that influence your choice of promotional activity?
How Marketing Mix and Positioning Can Affect a BusinessPositioning • If a business extends its operating hours to accommodate its customers, it may increase the number of customers but it will also increase the cost of payroll to pay for the extra hours.
How Marketing Mix and Positioning Can Affect a BusinessPositioning • Convenience is important to customers. When a business offers a service that saves time for a customer, it is hoping to attract more customers thus increasing their profits. Examples of convenience Source: www.mcdonalds.com
How Marketing Mix and Positioning Can Affect a BusinessPositioning • Customized Services will cost a customer more but many people are willing to pay more for special services. – Offering customized services can lead to higher profit margins for the business. • With a SAM’S Credit Card, you can enter the store 2 hours early. • You can call and have your order pulled and ready for pick up. www.samsclub.com • You must have a SAM’s Credit Card.
How Marketing Mix and Positioning Can Affect a BusinessPositioning • By emphasizing its economic values (lower prices) in the marketplace, a business is positioning it’s products based on prices. If a business that emphasizes a products environmental friendliness is positioning the product by focusing on attributes or features of a product. Source: http://www.askprimerica.com
How Marketing Mix and Positioning Can Affect a BusinessPositioning• Sometimes the quality of a product is used to for emphasis. The products is being positioned based on its quality. Customers will sometimes pay more for quality. vs Source: www.nikeinc.com
How Marketing Mix and Positioning Can Affect a BusinessPositioning• Why should I use one competitors product over another? When a company emphasizes the advantages of its product over a competitors, it is positioning the product based advantages. Source: gadgetcage.com