Product -Service Strategies

Outline

Product Hierarchy Product-Mix Decisions Product-Line Strategies Branding Packaging-

Labelling,Warantees,Guarantees Product Vs. Service

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Introduction
Product (or service) is the main
element of the marketing mix Therefore, need to determine the Product Strategies before deciding on the remaining marketing mix

7-Levels of Product Hierarchy

Product needto satisfy a need e.g. feet protection Product classa family of products having similar

function e.g. all shoes Product linea group of products with closely related functions e.g. sports shoes Product typeproducts within a line having similar form e.g. basket-ball shoes Branda name representing a product or line e.g. Nike Item (Stock Keeping Unit-sku)a unit item e.g. one pair of Nike basket-ball shoe
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Product-Mix Decisions
Decisions on the product mix (the number of product lines and items in each line) that the company may offer A single product

Multiple products

Most firms started off as a single-product company

e.g. Creative Technology markets sound cards as
well as MP3 players

A systems of products
options

e.g. Nikon sells camera, lenses, filters & other

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Product-Line strategy

How many product lines should we have? How many product items in each line? Expanding the Product Line Product line extension: add an item to the existing product line Product category extension: add a new item or line of items for a company Brand extension: Product category extension that uses an existing brand name Downward stretch by introducing lower range of the products Upward stretch by entering the high end of the market Two-way stretch by filling the whole line

Brands
A rose by any name smells as sweet. True
or false? Would you go vacationing on Hog Island? Why are Coca-Cola, McDonalds and Kentucky Fried Chicken (KFC) successful? Do you think Maikenji would be half as successful?

Maikenji restaurant in Badaling, north of Beijing

combines the Chinese Characters used in the names for McDonalds and KFC and offers a menu similar to KFC located 100 metres away (AP 11,Jul2001) 7

Brands (continued)
Buildings age and become dilapidated. Machines wear out. Cars rust. But what lives on are brands.
Sir Hector Laing United Biscuits, U.K.
Source: The economist, Dec 24, 1988

What is a brand?
Six levels of meaning: Attributes e.g. High resale value Benefits e.g. Safety Values e.g. Brand loyalty Culture e.g. organized and efficient Personality e.g. serious Type of users e.g. by occupation
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Alternative Brand Strategies

No brand identity Private brands Corporate brands Product line extension Specific product Combination

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The Branding Process

From commodity to product

From product to brand From brand to experience
e.g. Singapore Airlines
e.g. air travel

From experience to the heart

e.g. A Great Way to Fly
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e.g. Romance in the air

Old Brands Strategy

Old brands survive due to emotional bond
with the consumer For slow moving brands either revive it with marketing money or kill it Growing interest in old brands because brand names carry value that is getting more expensive and risky to create When re-promoting old brands, do not ignore younger consumers
Source: Selling, Fortune, April 28, 1986
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Services Pose Distinctive Marketing Challenges Marketing management tasks in the service sector differ from those in
the manufacturing sector

1. Most service products cannot be inventoried 2. Intangible elements usually dominate value creation 3. Services are often difficult to visualize and understand 4. Customers may be involved in co-production 5. People may be part of the service experience 6. Operational inputs and outputs tend to vary more widely 7. The time factor often assumes great importance 8. Distribution may take place through nonphysical channels
What are marketing implications?

The eight common differences are:

Value Added by Physical, Intangible Elements Helps Distinguish Goods and Services

Physical Elements
High
Salt Detergents CD Player Wine Golf Clubs New Car Tailored clothing Fast-Food Restaurant

Plumbing Repair Health Club Airline Flight Landscape Maintenance Consulting Life Insurance Internet Banking

Low Source; Adapted from Lynn Shostack

Intangible Elements

High

Assignment

SELECT ANY COMPANY OF YOUR CHOICE

AND IDENTIFY THE RANGE OF PRODUCT AND BRANDING STRATEGIES APPLICABLE TO ITS PRODUCT MIX.

TO BE AS REPORT/PPT (3PGS/9 SLIDES)

SUBMITTED ON BB BY 24 OCT,2013-10.15 AM.

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