Chapter 9 product - the online offer


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Chapter 9 product - the online offer

  1. 1. E-MARKETING, 6TH EDITION JUDY STRAUSS AND RAYMOND FROST Chapter 9: Product – The Online Offer
  2. 2. What Is a Product? Promotion Place (Distribution) Price ProductProduct is the “heart” of Marketing Mix
  3. 3. Many Products Capitalize on Internet Properties  A product is a bundle of benefits that satisfies needs of organizations or consumers.  Includes tangible goods, services, ideas, people, and places.  Products such as search engines are unique to the internet while others simply use the internet as a new distribution channel.  Organizations use research to determine what is important to customers when creating new products.  The marketing mix and CRM work together to produce relational and transactional outcomes with consumers.
  4. 4.  In 1998, co-founders Brin and Page delivered an innovative new search strategy that ranked results on popularity as well as keywords.  Today, Google performs 1 billion searches per day, speaks 345 languages and is the most-visited U.S. Web site.  Innovative products and strong customer focus are driving its success and profitability.  Generates revenue from several B2B markets:  Licensing of its search services; Sales of advertising to Web advertisers.  Google pays close attention to user value, keeps costs low, and delivers eyeballs to advertisers.  Google’s product mix includes 24 search products, 3 advertising products, 20 applications. The Google Story
  5. 5. Types of Products Unsought Products Specialty Products Shopping Products Convenience Products Consumer Products Business Products PRODUCTS
  6. 6. 6 Define the terms Product item, Product line, Product width, Product depth, and Product mix.
  7. 7. 7 Gillette’s Product Lines and Mix Blades and Writing razors Toiletries instruments Lighters Mach 3 Series Paper Mate Cricket Sensor Adorn Flair S.T. Dupont Trac II Toni Atra Right Guard Swivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry Look Twin Injector Dry Idea Techmatic Brush Plus Width of the product mix Depthoftheproductlines
  8. 8. 8 Benefits of Product Lines Equivalent Quality Efficient Sales and Distribution Standardized Components Package Uniformity Advertising Economies
  9. 9. Product Mix Width  Diversifies risk  Capitalizes on established reputations The number of product lines an organization offers.
  10. 10. 10 Product Line Depth  Attracts buyers with different preferences  Increases sales/profits by further market segmentation  Capitalizes on economies of scale  Evens out seasonal sales patterns The number of product items in a product line.
  11. 11. Creating Customer Value Online  Customer value = benefits – costs  Value means entire product experience  Product awareness to product disposition  Product decisions must be made that deliver benefits to customers.  Attributes  Branding  Support Services  Labeling  packaging
  12. 12.  Attributes include overall quality and specific features.  Notion: “You get what you pay for”  Benefits are the same features from a user perspective.  The internet increases customer benefits in many ways.  “Broadening” and “Deepening” of product features  Mass customization  User personalization of the shopping experience can be achieved Product Benefits: Attributes
  13. 13. Product Benefits: Branding  A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.  When a firm registers that information with the U.S. Patent Office, it becomes a trademark.  History of Branding  What is Branding?  Brand Awareness, Brand Recall, Brand Recognition A brand represents a promise or value proposition to its customers.
  14. 14. Brand Equity  Brand equity is the intangible financial value of a brand.  A great brand taps into popular culture and touches consumers. Now look at Exhibit 9.3 of your textbook
  15. 15. 2006 2006 Rank Brand Value Industry 1 Microsoft 62039 Software 2 GE 55834 Technology 3 Coca-Cola 41406 F/D/T* 4 China Mobile 39168 Telecom 5 Marlboro 38510 F/D/T 6 Wal-Mart 37567 Retail 7 Google 37445 Software 8 IBM 36084 Technology 9 Citibank 31028 Bank 10 Toyota 30201 Cars
  16. 16. Ran k Brand Value Industry 1 Apple Inc. 153285 Technolog y 2 Google 111498 Technolog y 3 IBM 100849 Technolog y 4 McDonald's 81016 F/D/T* 5 Microsoft 78243 Technolog y 6 Coca-Cola 73752 F/D/T 7 AT&T 69916 Telecom 8 Marlboro 67522 F/D/T 9 China 57326 Telecom Ran k Brand Value Industry 1 Google 114260 Technolog y 2 IBM 86383 Technolog y 3 Apple 83153 Technolog y 4 Microsoft 76344 Technolog y 5 Coca Cola 67983 F/D/T* 6 McDonald's 66005 F/D/T 7 Marlboro 57047 F/D/T 8 China Mobile 52616 Telecom 2011 2010
  17. 17. Levels of Brand Relationship Intensity Advocacy Community Connection Identity Awareness Tell others about the brand Communicate with each other Communicate with company between purchases Display the brand proudly Is on the list of possibilities Highest intensity
  18. 18.  Firms can use existing brand names (i.e. online extensions) or create new brands on the internet.  Some firms may use different names offline and online to avoid risk if the new product or channel should fail.  Sports Illustrated created  Wired Magazine changed its online version name to Hotwired. Branding Decisions for Web Products
  19. 19. Creating New Brands for Internet Marketing  Good brand names should:  Suggest something about the product.  Differentiate the product from competitors.  Be capable of legal protection.  On the internet, a good brand name should be short, memorable, easy to spell, and translate well into other languages.  Cobranding occurs when two companies form an alliance and put their brand names on a product:  Sports Illustrated co-brands with CNN as CNNSI  Yahoo! Visa shopping pages
  20. 20. Internet Domain Names  A URL (Uniform Resource Locator) is a Web site address.  Also called an IP address and domain name.  Domain names contain several levels.  http:// indicates that the browser should expect data using the hypertext protocol.  The second-level is often the name of the company.  The top-level may be .com or a country name, such as .mx for Mexico or .uk for the United Kingdom.  There are at least 40 top level names available including .biz, .info, .pro, etc.
  21. 21. Internet Domain Names, cont.  The Internet Corporation for Assigned Names and Numbers (ICANN) is a nonprofit corporation that makes decisions about protocol and domain name assignment, registration, etc.  GoDaddy and other sites provide domain registration services at low cost.  More than 97% of words in the dictionary have already been registered as domain names.
  22. 22. Internet Domain Names, cont.  Organizations should purchase related names and spellings.  Picking the right domain name can make a huge difference.  Directing people correctly to a site.  Building consistency in marketing communications.
  23. 23. Product Benefits: Support Services  Customer support is a critical component in the value proposition.  Customer service reps help customers with installation, maintenance, product guarantees, etc. to increase customer satisfaction.  Good companies combine online and offline channels to increase their customer support.
  24. 24. Product Benefits: Labeling  Labeling has digital equivalents in the online world.  Online “labels” provide information about product usage, features, and installing software.  Online “labels” also provide extensive legal information about the software product.  Online firms may add the Better Business logo or TRUSTe privacy shield to their sites.
  25. 25. Customer Codesign  Business and consumer collaboration are possible on the Internet.  Software developers often seek customer input about new products.  They often allow users to download new products, test them, and provide feedback.  Customer interaction has been found to increase product success.  Amazon seeks customers’ product reviews.  CNN encourges citizen generalists to upload videos of breaking news.
  26. 26. New-Product Strategies: Product Mix Strategies  Many new products, YouTube, Yahoo!, and Twitter, were introduced by “one-pony” firms.  Other firms have added products to an already successful product mix.  Companies can choose among six categories of new-product strategies.
  27. 27. Product Mix Strategies, cont. 1. Discontinuous innovations are new-to-the- world products. 2. New-product lines are new products in a different category for an existing brand name. 3. Additions to existing product lines. 4. Improvements or revisions of existing products. 5. Repositioned products can be targeted to