Download - Ch 9 product completed(1)
Designing and Managing ProductsConcepts related to Chapter 9
What is a Product? A product is anything that can be offered to a
market for attention, acquisition, use or consumption that might satisfy a want or need
Includes physical objects, services, places, organizations, and ideas.
Product LevelsBased on Consumer Perspective
1.Core product - actual productWhat are they buying?
2.Facilitating products - services that must be present for the core product to be in place
Ex. Security, register, check-in/check-out3.Supporting products - extra products to add value to core product, to differentiate from competitors
Ex. Area maps, spa, valet service, etc.4.Augmented products- delivery piece of the products
Ex. Accessibility, atmosphere, customer interaction, etc.
Augmented Product• Accessibility - must add value
• Ex. Hours of operation• Atmosphere: The Physical Environment
Multidimensional: Visual, aural, olfactory, tactilehttp://travel.usatoday.com/hotels/post/2009/10/hotel-lobby-fragrance-will-it-pass-smell-test-in-bad-economy/620000421/1 Do this to:
Create attention, messages, effects, and mood• Customer Interaction with the Service Delivery System
Joining stage Consumption phase Detachment phase
• Customer Interaction with Other Customers• Why is this important?• Examples?
• Customers as Employees Self-service technologies (SSTs). Examples?
Product levels(Adapted fromC. Gonroos, “Developing theService Offering—A Source of Competitive Advantage,” inAdd Value to Your Service,C. Surprenant, ed., Chicago:American Marketing Association,1987, p. 83.)
at what level are these products?
.
Brand Decisions
• Brand: Name, term, sign, symbol, design, or a combination of these elements
• One of a company’s most valuable assets• Represents what the company is and what it stands for• Implies trust , consistency, and expectations• The strongest brands own a place in customers’ minds• Develops mental structures to help consumers make
decisions• Multi-branding http://www.yum.com/brands/
• Co-branding – different ownership
What are these brands and what do they represent?
New Product Development Process
IdeaIdeaGenerationGeneration
ConceptConceptDevelopmentDevelopmentand Testingand Testing
MarketingMarketingStrategyStrategy
DevelopmentDevelopment
IdeaIdeaScreeningScreening
BusinessBusinessAnalysisAnalysis
ProductProductDevelopmentDevelopment
MarketMarketTestingTesting
CommercializationCommercialization
Product Life-Cycle (PLC) stagesIn your groups, describe what happens in your stage.1.Product Development2.Introduction3.Growth4.Maturity5.Decline
TimeProduct
Develop-ment
Introduction
Profits
Sales
Growth Maturity Decline
Losses/Investments ($)
Sales andProfits ($)
Sales and Profits Over the Product’s Life From Inception to Demise
Product Life Cycle
Phase 1 and 2• Product development begins when the company finds
and develops a new product idea During development, sales are zero and the
company’s investment costs add up • Introduction is a period of slow sales growth as the
product is being introduced into the market Profits are nonexistent at this stage due to high
product introduction expenses
Phase 3, 4 and 5• Growth is a period of rapid market acceptance and
increasing profits• Maturity is a period of slowdown in sales growth because
the product has achieved acceptance by most of its potential buyers
Profits level off or decline due to increased marketing outlays to defend the product against competition
• Decline is the period when sales fall off quickly and profits drop
http://finance.yahoo.com/news/pf_article_113424.htmlhttp://www.cleveland.com/pdgraphics/index.ssf/2009/10/move_to_online_causes_decline.htmlhttp://www.wwwmetrics.com/travel.htm
(Martin Bell, Marketing Concepts and Strategy, 3rd ed., p.267, 1979, Houghton Mifflin Company; used by permission, Mrs.. Marcellette (Bell) Chapman. )
Product Deletion Process
Conclusion• Develop a strong brand• What do customers think about your brand?• What is your brand supposed to mean?• Adapt, migrate or die!