Products, Services, and Brands: Building Customer Value

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What Is a Product?
Product and Services Decisions
Branding Strategy: Building Strong Brands
Services Marketing

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Products, Services, and Brands: Building Customer Value

Topic Outline

  • What Is a Product?
  • Product and Services Decisions
  • Branding Strategy: Building Strong Brands
  • Services Marketing

What Is a Product?

Products, Services, and Experiences

Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want

Товар – все, что может удовлетворит нужду или потребность и предлагается рынку с целью привлечения внимания, приобретения, использования или потребления. Это могут быть физические объекты, услуги, места, идеи…

(Услуга – объекты продажи в виде действий, выгод или удовлетворений (стрижка, ремонтные работы))

Experiences represent what buying the product or service will do for the customer

Уровни продукта

Три уровня продукта

  • Товар по замыслу – что в действительности приобретает покупатель? - ключевая характеристика продукта, ради обладания которой потребитель покупает товар
  • Core product - problem solving service or core benefits that consumers are really buying when they obtain a product.
  • Товар в реальном исполнении -  может обладать пятью характеристиками: уровнем качества, набором свойств, специфическим оформлением, марочным названием и специфической упаковкой. Совокупность данных характеристик позволяет покупателю воспользоваться товаром по замыслу.
  • Actual product incorporates the quality, features and design, brand name, packaging and other attributes that combine to deliver core product benefits.
  • Товар с подкреплением – предоставление дополнительных услуг и выгод. Деятель рынка должен присмотреться к существующей у клиента системе потребления в целом
  • Augmented product - incorporates the consumer services and benefits built around the core and actual products.

What Is a Product?

Product and Service Classifications

  • Consumer products
  • Industrial products

Consumer products классификация товаров широкого потребления 
Consumer products are products and services for personal consumption. Classified according to consumer shopping habits:

  • Convenience products (товары повседневного спроса)
    • Purchased frequently, minimum comparison and buying effort (tobacco products, soap and newspapers)

Staples (товары постоянного спроса) – are goods, that consumers buy on the regular basis (ketchup, tooth paste or bread).

Impulse goods (товары импульсной покупки) – are purchased with a little planning or search effort (chocolate, magazines).

Emergency goods (товары для экстренных случаев) – are purchased when a need is urgent (boots during the year’s first snowstorm)..

  • Shopping products (товары предварительного спроса)
    • Process of selection, compared on bases of quality, suitability, price and style. Consumers spend considerable time and effort  (furniture, cars)
  • Speciality goods (товары особого спроса) – goods with unique characteristic. Buyers are usually willing to travel great distances to buy one. Buyers normally do not compare speciality goods. Dealers do not need convenience location,  they must still let buyers know where to find them (high-price home entertainment systems, photographic equipment)
  • Unsought products (товары пассивного спроса)
    • Consumer does not know about the product or perceives no need for it (life insurance, Funeral services, and home security systems).

Industrial products 
классификация товаров промышленного назначения осуществляется на основе того, в какой мере они участвуют в процессе производства

Products bought for further processing or the purposes of resale.

    • Distinction based upon the purpose for which the product is purchased.
  • Materials and parts (материалы и детали) – полностью используются в изделии производителя.
    • Raw materials.
    • Manufactured materials and parts.
  • Capital items (капитальное имущество) – частично присутствуют в готовом изделии.
    • Installations (стационарные сооружения).
    • Accessory equipment  (вспомогательное оборудование).
  • Supplies and services  (вспомогательные материалы и услуги) – рабочие материалы, матер. для тех. обслуживания, услуги по тех.обслуживанию и ремонту, услуги консультационного характера
    • Electricity to power the machines making shirts.

Product and Service Decisions

Individual Product and Service Decisions

Product decisions are focused around the development and marketing of

Product and Service Decisions

Product attributes are the benefits of the product or service

  • Quality

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
  • Features. Product features are a competitive tool for differentiating a product from competitors’ products

Product features are assessed based on the value to the customer versus the cost to the company

  • Style and design

Style describes the appearance of the product

Design contributes to a product’s usefulness as well as to its looks

Brand a collection of physical and emotional characteristics associated with a particular identified product or service (a name, term, sign, symbol or design, or a combination of these) , that differentiates that product or service from the rest of the marketplace.

Brand equity is the differential effect that the brand name has on customer response to the product and its marketing

Product and Service Decisions

Individual Product and Service Decisions

Packaging involves designing and producing the container or wrapper for a product

Labels identify the product or brand, describe attributes, and provide promotion

Individual Product and Service Decisions

Отличительное уникальное функциональное преимущество пива Tuborg Green – пробка с кольцом.

Японская пробка стала  исключительной функциональной инновацией в сфере пивной упаковки.

Апрель 2006 г.

«Ответ» на иннова-ции конку-рентов

Product support services augment actual products

Product Line Decisions

Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

Product line length is the number of items in the product line

Line stretching (наращивание)

Downward stretch

Company initially located at the top end of the market and then ‘stretches’ downwards to pre-empt a competitor or respond to an attack. Launch of C-Class by Mercedes-Benz.

Upward stretch

Companies stretching upwards to add prestige to their existing range of products. Toyota with the Lexus.

Can be risky due to customer perception and inability of sales people to trade up and negotiate to the new level.

Two-way stretch

Extending product lines upwards and downwards to address different segments of the market.

Line filling (насыщение)

Product-line stretching decisions

 

 

Product Mix Decisions

Product mix consists of all the products and items that a particular seller offers for sale

  • Width
  • Length
  • Depth
  • Consistency

Branding Strategy: Building Strong Brands

Brand represents the consumer’s perceptions and feelings about a product and its performance. It is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers

  • Brand Positioning

Brand имеет 4 основных

значения:

 

Brand Identity – Личность брэнда

Личность брэнда – это совокупность характеристик брэнда, делающих данный брэнд узнаваемым

(имя брэнда, используемая  цветовая гамма, линии…)

 is a composite of those features of a brand, that make it recognizable

(brand name, colors, shapes etc, that are recognized through sight)

Ключевые характеристики личности брэнда: 
Key aspects in a brand identity program are:

1.Элементы дизайна –  включают в себя логотип, графические  элементы, тип шрифта, символы, цветовую  гамму. Другими словами все, что стимулирует запоминаемость брэнда.

 Design elements – include logo, graphic features, typeface, symbols and colors, that stimulate the recognition and remembrance of a brand

«Золотая арка»  McDonald’s

Branding Strategy: Building Strong Brands

Brand Name Selection

Desirable qualities

  1. Suggest benefits and qualities
  2. Easy to pronounce, recognize, and remember
  3. Distinctive
  4. Extendable
  5. Translatable for the global economy
  6. Capable of registration and legal protection

Brand Sponsorship

Manufacturer’s brand (national brand) - Brand created and owned by the producer of the product or service.

Private brand (middleman, distributor or store brand) –

A brand created and owned by a reseller of a product or service (Ашан, Магнит, O’key).

Licensed brand - A product or service using a brand name offered by the brand owner to the licensee for an agreed fee or royalty.

Co-brand - The practice of using the established brand names of two different companies on the same product.

Co-branding

Co-branding occurs when two established brand names of different companies are used on the same product or service.

It offers many advantages:

    • creates broader consumer appeal.
    • greater brand equity.
    • allows companies to enter new markets with minimal risk or investment.

It also has limitations:

    • partnerships should be carefully evaluated and often involve complex legal contracts.
    • a great deal of trust is necessary for success.

Brand Development Strategies

 

Brand development strategies

1. Multi-brands -  Firm develops two or more brands in the same product category. Establishes different features and appeals to different market segments and buying motives.

    • In corporate branding the firm makes its company name the dominant brand identity across all products, e.g. Johnson & Johnson™.
    • Other companies use the company and individual branding approach, e.g. Nestlé KitKat™.

Multi-branding

Multi-branding – different brand names owned by one company are used in the same product category

Procter & Gamble

11 brands in North America

16 in Latin America

12 in Asia

17 in Europe

Product category «Престижные ароматы»

 

Product category “Women care”

 

Product category “Baby care”

 

  1. Individual product decisions (cont)  
    Brand decisions

Brand strategy

2. New brand

Some companies create a new brand for a new product if their existing brands do not fit or seem appropriate

Toyota             -           Lexus

1. Individual product decisions (cont)  
Brand decisions

Branding strategies:

3. Line extension

 

  1. Individual product decisions (cont)

Brand decisions

4. Brand Extension

 

In normal circumstances brand extension requires some sort of fit with the existing brand.

But it is not necessary…..

individual product decisions (cont)  
Brand decisions

Virgin Group:

Mobile telephony

Music

Retailing

Transpor-tation

Travel

Leisure

Financial services

Publishing

The advantages of line and brand extension

For manufacture/retailer

  • Communication costs are lower if a consumer holds a positive image of a brand
  • Retailers are more prone to use limited shelf space for an existing brands rather than for unknown one

For consumer

  • The brand name contains a promise of quality that reduce the purchase risk associated with untried product or services

 

Individual product decisions (cont)  
Brand decisions

One problem with line or brand extension – 

a new product may damage the brand’s image

Services Marketing

Types of Service Industries

  • Government
  • Private not-for-profit organizations
  • Business services

Services Marketing

Nature and Characteristics of a Service

Which of the following is not a special characteristic of service?

    1. Tangibility
    2. Inseparability
    3. Variability
    4. Perishability

Services Marketing

Marketing Strategies for Service Firms

In addition to traditional marketing strategies, service firms often require additional strategies

  • Service-profit chain
  • Internal marketing
  • Interactive marketing

Marketing Strategies for Service Firms

Service-profit chain links service firm profits with employee and customer satisfaction

  • Internal service quality
  • Satisfied and productive service employees
  • Greater service value
  • Satisfied and loyal customers
  • Healthy service profits and growth

Internal marketing means that the service firm must orient and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction

Internal marketing must precede external marketing

Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter

  • Service differentiation
  • Service quality
  • Service productivity

Managing service quality provides a competitive advantage by delivering consistently higher quality than its competitors

Service quality always varies depending on interactions between employees and customers

Marketing Strategies for Service Firms

Managing service productivity refers to the cost side of marketing strategies for service firms

  • Employee recruiting, hiring, and training strategies
  • Service quantity and quality strategies



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