Chapter 9: Elements of Product Planning for Goods and Services

1. Chapter 9: Elements of Product Planning for Goods and Services

2. Target Market Product Place Promotion Price Product Idea Brand Package Warranty Physical good/service Features Quality level Accessories Installation Instructions Product line Type of Brand: Individual or family Manufacturer or dealer Protection, Promotion, or both None, full, or limited Defining “Product” Exhibit 9-1 9-3

3. Distinctive Features of Services • Services are Intangible - difficult to demonstrate, illustrate & sample • Services are Perishable - difficult to store for times of peak use • Services are Unique - difficult to standardize • Services are often shaped by the buyer

4. Strategic Considerations for Services • Customer attitudes are important • Judging Service Quality Often Hard for users • Displaying information is hard • If buyer must be present - big problems • Timing of supply and demand is critical • If you can standardize, it helps a lot • Customer ability to gain more information can help

5. Product Classes • Two broad classes • consumer products • business products • Classes help in planning marketing mix needed • Based on how the customer views the product • how consumers think about and shop for products • how business/organizational buyers think about products and how they'll be used

6. Convenience Shopping Consumer Product Classes Specialty Unsought Consumer Product Classes 9-4

7. Special Considerations with Business Products • Derived demand • Demand for goods and services is derived from the demand for what firms produce and sell • Demand elasticity faced by whole industry • Tax treatment • Capital item • Expense item

8. Installations Professional Services Accessories Business Product Classes MRO Supplies Raw Materials Component Parts and Materials Business Products 9-5

9. Rejection Nonrecognition Focus: Change Position Recognition Focus: Increase Awareness Preference Focus: Continue Education Insistence Focus : Maintain Availability Focus : Develop High Brand Equity Branding 9-6

10. Family Brand Individual Brand ? Brand Choices ? ? ? ? Manufacturer Dealer ? ? Generic What Kind of Brand to Use? 9-7

11. Packaging • Opportunity to promote the product • at the point of purchase • links product to earlier promotion • at the point of consumption • Opportunity to protect the product • reduces costs of shipping and storing • reduces theft, spoiling, etc. • Improve the basic product • easier to use, more convenient • appeals to new target markets

12. Per Capita Consumption of Paper and Board (Packaging) Consumers in the U.S. like the convenience of disposable packaging and small serving sizes, but some critics argue that it is wasteful and bad for the environment. 700 670 491 Pounds per person 347 88 98 22 U.S. Japan China World W. Europe E. Europe

13. Warranties • Warranty: what the seller promises about its product • Regulated by the Magnuson-Moss Act (1975) • producers must provide clearly written warranty if a warranty is offered • warranty does not have to be "strong" • Federal Trade Commission provides guidelines • must be clear and definite • may not be "unfair" or "deceptive" • must be available for inspection before the purchase