Transcript Chapter 9: Elements of Product Planning for Goods and Services

Chapter 9:
Elements of Product
Planning for Goods
and Services
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Defining “Product”
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
Exhibit 9-1
9-3
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
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
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
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
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
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
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Consumer Product Classes
Convenience
Consumer
Product
Classes
Shopping
Specialty
Unsought
9-4
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
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
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Business Products
Installations
Professional
Services
MRO
Supplies
Accessories
Business
Product
Classes
Raw
Materials
Component
Parts and
Materials
9-5
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Branding
Rejection
Focus:
Change Position
Focus:
Nonrecognition
Increase Awareness
Focus:
Recognition
Preference
Insistence
9-6
Continue Education
Focus :
Maintain Availability
Focus : Develop High
Brand Equity
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
What Kind of Brand to Use?
?
Family
Brand
?
?
?
Individual
Brand
Brand
Choices
?
Manufacturer
Dealer
?
?
Generic
9-7
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
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
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Per Capita Consumption of
Paper and Board (Packaging)
700
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.
670
491
Pounds
per person
347
88
98
22
U.S.
Japan
W.
Europe
E.
Europe
China
World
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
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
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill