Product services place_strategy

Product and Services StrategyPlace Strategy

nToday’s Learning Objectives

• Describe the roles of product and service branding, packaging, labelling, and names

• Identify the four characteristics that affect the marketing of a service & discuss the additional marketing considerations that services require

• Identify the typical marketing strategies marketers apply for products in the different stages of the product Life Cycle

n Course completion

• Course contract revision and plan for the rest of the semester

• Instead of Marketing News Presntations – just hand in your article and short write up. Due by week of April 10th. May hand in earlier.

n Market Plan Project – Next Steps

• How is it going ? • At this point you should have done the following:

– Conduct your SWOT as a group– Rethink and finalize your concept/product idea in light

of your research and SWOT & creativity exercises– Set marketing objectives – these are one year

objectives so they need to be SMART– Select your primary and secondary target market –

describe them – their need, characteristics, purchasing/usage habits related to your category

– Develop your market positioning strategy – write a positioning statement

n Marketing Planning

• What is a goal?

• What is an objective?

• What are typical marketing objectives related to?• Marketing objectives can include:

– Sales, profit, market share, ROI– Awareness, trial, purchase, repeat purchase, attitude– Distribution coverage– Marketing promotion efficiency targets, e.g. response

Objective: Statements of desired outcomes resulting from a plan.

Strategies: Outline in broad-strokes how the objectives will be achieved.

Plans: All the specific details needed to execute the strategies.

Objectives, Strategies and Plans

n Example• Objective:

– To obtain 60% market share of the ketchup market in Canada

• Strategies:1. Promotion - By maintaining brand awareness via

year round TV promotion support 2. Product-By launching a new package format3. Distribution -By supporting the retail network with

innovative category management systems

• Plans: for Promotion– ad creative plan, media plan & schedule

n Product

• Evaluate a product in pairs or threes – select one from the box

nLevels of Product

Corebenefit

or service

Augmentedproduct

ActualProduct

(features)

CoreProduct

(benefits)

Installation

Warranty After-sale service

Delivery and credit

Packaging

Brandname

Features

Quality level Design

Figure 8-1

n Exercise on Features and Benefits

• List five features of your product and a corresponding benefit to the consumer of each feature

• A feature is something about the product- it colour, design, materials it is made from etc

• A Benefit is what the product does for the customer

nIndividual Product Decisions

1. Product attribute decisionsProduct quality (level and consistency), features,

style and design2. Product Brand Name Decisions

Brand equity, line and brand extensions, manufacturer’s versus private brands, licensing, co-branding

3. Packaging RolesProtect contents, identify and promote the product

and brand, be a self merchandiserLabelling - Ingredients, directions for use, identify

and promote4. Product support services

Repair and maintenance, accessories

nIndividual Product Decisions (continued)

• What are the purposes of a package?

• Look at your package and discuss at least 3 purposes it serves.

• Is there any competitive advantage in the package you are studying?

nWhat is a Brand?

• A Brand is the use of name, term, symbol, or design or combination of these to identify a product

• Why brand a product or service?– By creating perceived differences among

products and developing a loyal customer franchise through branding, marketers create “ value “

nFour Brand Strategies

LineExtension

-new flavour, size

BrandExtension

-Using the name in a new category

MultibrandsNew

Brands

Existing

Brand name

Existing

Product category

Figure 8-4

n Brand names should:

• Suggest something about the product• Be easy to pronounce, recognize, and remember• Be distinctive• Be extendable• Translate to other languages• Be capable of registration and legal protection

n Brand Equity

Brand association

Brand loyalty

Brand awareness

Perceived quality

Source: Reprinted with permission of The Free Press, a Division of Simon & Schuster Adult Publishing Group, from Brand Leadership, by David A. Aaker and Erich Joachimsthaler, p. 17. Copyright © 2000 by David A. Aaker andErich Joachimsthaler.

Brand Equity

nKotler’s 5 Dimensions that make a

strong brand1. Should bring to mind certain attributes such as

product's features or style2. Should suggest one or more benefits e.g. Apple's user

friendliness3. Should be able to visualize the brand’s characteristics

as if the brand were a person. E.g. Apple would be in his 20”s, IBM in his 60’s

4. Should suggest something about a company's values? Is it innovative, a service icon or socially conscious?

5. Suggests a picture of the brands users- are they young and enthusiastic? Are they a family? Are they older and established?

n Brand Loyalty

• Four levels – Unknown (consumers are unaware of it)– Familiarity (recognize name and some image)– Preference (will choose it if it is available)– Insistence (will accept no alternatives and will

search extensively for it)

• What is the other level?

nCharacteristics of Services

IntangibilityCannot be seen, tasted, felt or smelled before

purchasing

VariabilityService quality depends

on who provides and under what conditions

InseparabilityProduction and,

consumption, and from the provider

PerishabilityCannot be stored,

for resale or later use

Figure 8-5

n Westjet

Discuss the marketing strategies that Westjet uses to handle these 4 characteristics of services

– Intangibility– Perishability– Inseparability– Variablility

n3 Main Marketing Tasks for Services

1. Service differentiation – provide value to customers

2. Service quality- internal management philosophy and employee satisfaction

3. Productivity – efficiency and cost effectiveness

n Recommended Reading

• by Harry Beckwith

– “Selling the Invisible”

– “What Clients Love”

• “Raving Fans” – Kenneth Blanchard

n Break

n Why is NPD so important?

– Follow changing market demands

– Remain competitive

– Keep up to changing technology

– Replace dying products

– Diversify product offering to reduce risk

nThe New Product Adoption Process

• Adoption process– The mental process through which an individual passes

from first hearing about an innovation to final adoption– Not all consumers want to risk trying new products when

they are first introduced

• Stages in the process– Awareness– Interest– Evaluation– Trial– Adoption

nNew Product Adoption Rates

Time of adoption of innovations

Innovators

34%Early

majority

34%Latemajority

Earlyadopters

16%Laggards

Source: reprinted with permission of the Free Press, a Division of Simon & Schuster, from Diffusion of Innovations, Fourth Edition, by E.M. Rugers, 1983.

Figure 6-5

nInfluences on the Rate of Adoption

• Five characteristics influence the rate of adoption of new product innovations:– Relative advantage

• How much better than existing alternatives?

– Compatibility• Fit current values and

experiences?– Complexity

• Ease of understanding?– Divisibility/Trialability

• Can it be tried on a limited basis?– Communicability

• Can the innovation be observed and communicated?

nProduct Life-Cycle Strategies

Profits

Development Introduction Growth Maturity Decline

SalesProfit

Loss($)

Figure 9-2

nSummary of PLC/Marketing Mix

R & D Introduction Growth Maturity DeclineSales Low Increasing Peaking Declining

Costs High R&D High Average Low Low

Profits Negative Negative Rising High Declining

Customers Innovators Early adopters Middle majority Laggards

Competitors Few Growing Stable number Declining

Marketing Product Maximize Market share Reduce costs

Objectives trial market share and profit milk brand

Product In development Basic Extensions Diversify brand Phase out weak

Price tbd Skimming or Penetrate Be price Cut

penetration market competitive price

Distribution tbd Selective Intensive Increase Reduce outlets

Advertising tbd Educate Awareness Brand Reduce

awareness interest differences and remind

Promotion tbd Heavy to Reduce Increase for Reduce costs

encourage trial heavy consumer brand switching minimum level

Table 9-2

n Product Section of Project Plan

• Product positioning strategy – include a positioning statement

• Core benefit/competitive advantage

• Features – packaging, features, added benefits

• Brand name(s) & rationale

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