Marketing Management

1. Marketing Management Dawn Iacobucci

2. Products: Good & Services Chapter 5

3. Marketing Framework

4. What is a Product? The term product can refer to both goods and services the full product profile (4Ps) part of the customer-company exchange Company offers something (a flight), and the customer offers something in return (payment)

5. Exchange Find profitable intersection between What customers want Utilize marketing research to find answers value, quality, specific features and benefits, etc. What the firm is well-suited offer

6. Relationship Marketing Successful exchanges can lead to loyalty and satisfaction Marketers benefit from turning short-term exchanges into long-term customer relationships

7. Discussion Question Can you explain the statement, �It costs six times more to get a new customer than to retain a current customer?�

8. Involvement and Product Types Distinction between product types hinges on thought required and involvement

9. Involvement and Product Types Low Involvement Convenience and straight rebuys Customers are inclined to engage in limited, if any, word-of-mouth exert minimum effort retrieving the product be more price sensitive Marketers are inclined to offer price-related loyalty programs engage in extensive distribution try to capture customers� attention

10. Involvement and Product Types High Involvement Products Specialty and new buys Customers are inclined to engage in considerable word-of-mouth exert effort retrieving the product be less price sensitive Marketers are inclined to offer community related loyalty programs engage in selective distribution offer much information about products

11. Goods Service Continuum

12. Tangibility Services are more intangible than goods Pure goods are tangible socks Pure service are intangible medical procedure A mix has tangible and intangible components rental cars

13. Search, Experience, Credence Search Qualities May be evaluated prior to purchase socks Experience Qualities Require trial or consumption before evaluation restaurants Credence Qualities Difficult to judge even post-consumption medical procedures

14. Search, Experience, Credence Goods are dominated by search and experience qualities Services are dominated by experience and credence qualities Many services are mostly intangible; thus, marketers need to signal quality to customers through marketing actions

15. Perishability & Inseparability Services are simultaneously produced and consumed Perishability: Services are more perishable than goods Marketers must try to even out demand Inseparability: Services are more impacted by the interaction between the service provider and the customer than goods

16. Variability Services are more variable than goods Due to changing needs, abilities, etc. in the service provider and customer Self-service and equipment can decrease variability Try to reduce bad variability Errors in the system Try to improve good variability Customization for customers� unique needs

17. Discussion Questions What is easier for marketers to price, socks or consulting advice? Why? What cues might customers utilize to judge the quality of consulting advice?

18. Goods & Services Differences between goods and services influence business decisions Advertising, branding, pricing, logistics, etc. Thinking beyond traditional services� Professional services Purchase experiences On-line shopping

19. Beyond Traditional Services Professional service providers Doctors, accountants, architects, etc. Are beginning to understand the importance of marketing Determining office location Targeting potential patients/clients Building brand image Developing promotion tactics, etc.

20. Beyond Traditional Services In some purchases, customers purchase the whole �experience� Museums, NikeTown, Volkswagen�s Transparent Factory Online purchases are a mix of goods and service Understanding implications of this mix are important

21. Core vs. Value Added Core is essential to the product offering Value-added is supplemental Can utilize value-added to differentiate

22. Discussion Questions What are the core elements of a university education? What are the value-added?

23. Satisfaction Core elements are expected by customers If core elements are substandard, dissatisfaction can be triggered Marketers can affect level of dis/satisfaction through value-addeds For example, luxurious rooms may lead to high satisfaction

24. Defining Core Elements Focus on the benefits and value being offered not just the product offerings Do not define elements too broadly

25. Dynamic Strategies Core businesses might change as the industry changes or as the firm�s competencies change Ask� What business are we in? What benefits do we want to provide to the consumer? Who is our competition?

26. Dynamic Strategies Define competition broadly

27. Dynamic Strategies-Corporate Focus on a firm�s core strengths Pepsi acquired restaurants then divested to focus on core strengths

28. Product Mix Product mix A company�s product lines Breadth Number of product lines Depth Number of products in a line

29. Discussion Questions Which company has the most depth? Which company has the most breadth?

30. Product Mix Product line manager can prune or supplement existing lines Extensions into breadth and depth must be done for strategic reasons Shouldn�t try to be all things to all people Are the new launches consistent with brand�s/company�s positioning? If not, can the brands be directed to different target segments without diluting the existing position?

31. Product Line Strategies

32. Discussion Question Which strategy below does your university current utilize? Explain.