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Chapter Eight

Chapter Eight. Product, Services, and Brands: Building Customer Value. What Is a Product?. Levels of Product and Services. Product and Service Decisions. Product attributes are the benefits of the product or service Quality Features Style and design.

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Chapter Eight

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  1. Chapter Eight Product, Services, and Brands: Building Customer Value

  2. What Is a Product? Levels of Product and Services

  3. Product and Service Decisions Product attributes are the benefits of the product or service Quality Features Style and design Individual Product and Service Decisions

  4. Product and Service Decisions Product quality includes level and consistency Quality level is the level of quality that supports the product’s positioning Conformance quality is the product’s freedom from defects and consistency in delivering a targeted level of performance Individual Product and Service Decisions

  5. Chapter Ten & Eleven Pricing: Understanding and Capturing Customer Value

  6. Factors to Consider When Setting Prices Customer Perceptions of Value

  7. Factors to Consider When Setting Prices Customer Perceptions of Value

  8. Factors to Consider When Setting Prices Good-value pricing offers the right combination of quality and good service to fair price Existing brands are being redesigned to offer more quality for a given price or the same quality for less price Customer Perceptions of Value

  9. Factors to Consider When Setting Prices Company and Product Costs Types of costs

  10. Factors to Consider When Setting Prices Fixed costs are the costs that do not vary with production or sales level Rent Heat Interest Executive salaries Company and Product Costs

  11. Factors to Consider When Setting Prices Variable costs are the costs that vary with the level of production Packaging Raw materials Company and Product Costs

  12. Factors to Consider When Setting Prices Total costs are the sum of the fixed and variable costs for any given level of production Average cost is the cost associated with a given level of output Company and Product Costs

  13. Pricing Strategies Include any one or a few of the pricing strategies that you’ll be following:

  14. New-Product Pricing Strategies Market-skimming pricing Market- penetration pricing Pricing Strategies

  15. Product Mix Pricing Strategies Pricing Strategies

  16. Price-Adjustment Strategies

  17. Which tool would you use • Which media would you use • Why would you use these tools and media • How would you use these tools and media IMC

  18. The Promotion Mix Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor Broadcast Print Internet Outdoor Major Promotion Tools

  19. Key Characteristics of Tools ADVERTISING • Non-personal mass communication • High reach • Impact • High cost • Low credibility? • Difficult to measure

  20. The Promotion Mix Sales promotion is the short-term incentives to encourage the purchase or sale of a product or service Discounts Coupons Displays Demonstrations Major Promotion Tools

  21. Key Characteristics of Tools SALES PROMOTION • Used tactically in short term • Aim is often to increase sales • High control and measurement • Moderate cost • Can be used throughout distribution channel • Credibility may be questioned

  22. The Promotion Mix Public relations involves building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events Press releases Sponsorships Special events Web pages Major Promotion Tools

  23. Key Characteristics of Tools PUBLIC RELATIONS • Non-personal • Wide range of tools available • High credibility • Low cost

  24. The Promotion Mix Personal selling is the personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships Sales presentations Trade shows Incentive programs Major Promotion Tools

  25. Key Characteristics of Tools PERSONAL SELLING • Interpersonal communications tool (two way) • Instantaneous feedback possible • Message can be tailored • High cost • More suitable where message is complex

  26. The Promotion Mix Direct marketing involves making direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships—through the use of direct mail, telephone, direct-response television, e-mail, and the Internet to communicate directly with specific consumers Catalog Telemarketing Kiosks Major Promotion Tools

  27. Key Characteristics of Tools DIRECT MARKETING • Any form of direct response communications • Targets individual customers (database) • Can deliver personalised message • Builds relationships • Facilitated by technological developments • Moderate absolute cost but cost per contact high

  28. Major communication tools

  29. New Tools, New Media Broadcast advertising (TV/radio) Print advertising (newspaper/magazine) Interactive/internet marketing Website/on-line advertising Outdoor/billboards Mobile/Wap Personal selling Telemarketing Packaging Direct marketing Publicity/PR Point of purchase Product placement Sales promotion Word of mouth Events & sponsorship

  30. Chapter Twelve Marketing Channels: Delivering Customer Value

  31. Supply Chains and the Value Delivery Network Upstream partners include raw material suppliers, components, parts, information, finances, and expertise to create a product or service Downstream partners include the marketing channels or distribution channels that look toward the customer Supply Chain Partners

  32. The Nature and Importance of Marketing Channels How Channel Members Add Value

  33. Channel Design Decisions Identifying Major Alternatives

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