Chapter 11 Product and Service Strategies Principles of Contemporary Marketing Kurtz & Boone
Chapter 11Product and Service
Strategies
Principles of
Contemporary MarketingKurtz & Boone
CHAPTER 11 Product and Service Strategies
Chapter Objectives
1. Define product and distinguish between goods and services and how they relate to the goods-services continuum.
2. Outline the importance of the service sector in today’s marketplace.
3. List the classifications of consumer goods and services and briefly describe each category.
4. Identify each of the types of business goods and services.
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CHAPTER 11 Product and Service Strategies
Chapter Objectives
5. Discuss how quality is used by marketers as a product strategy.
6. Explain why firms develop lines of related products.
7. Describe the way marketers typically measure product mixes and make product mix decisions.
8. Explain the concept of the product lifecycle.
9. Describe how a firm can extend a product’s lifecycle, and explain why certain products may be deleted.
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CHAPTER 11 Product and Service Strategies
o Product - Bundle of physical, service, and symbolic attributes designed to satisfy a customer’s wants and needs
o People buy want satisfaction, not objectso Example: Consumers buy televisions
because they want entertainment, not because they want a box with a screen
What is a Product?
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CHAPTER 11 Product and Service Strategies
o Services - Intangible tasks that satisfy the needs of consumer and business users
o Goods - Tangible products that customers can see, hear, smell, taste, or touch
o Goods–services continuum - Spectrum along which goods and services fall according to their attributes, from pure good to pure service
What are Goods and Services?
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CHAPTER 11 Product and Service Strategies
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CHAPTER 11 Product and Service Strategies
o Intangible
o Inseparable from the service providers
o Perishable
o Cannot be standardized
o Buyers play important roles in the creation and distribution of services
o Wide variations in service standards
Characteristics of Services
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CHAPTER 11 Product and Service Strategies
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 11 Product and Service Strategies
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 11 Product and Service Strategies
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 11 Product and Service Strategies
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CHAPTER 11 Product and Service Strategies
o Quality is a key component to a firm’s success in a competitive marketplace
o The efforts to create and market high-quality goods and services have been referred to as total quality management (TQM)
Quality as a Product Strategy
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CHAPTER 11 Product and Service Strategies
o ISO 9001:2000 standards implemented by the European Union define international, generic criteria for quality management and assurance
o The U.S. member body of ISO is the National Institute of Standards and Technology
Worldwide Quality Programs
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CHAPTER 11 Product and Service Strategies
o Measuring quality by comparing performance against industry leaders
o Involves three main activities:o Identifying manufacturing or business
processes that need improvement
o Comparing internal processes to those of industry leaders
o Implementing changes for quality improvement
Benchmarking
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CHAPTER 11 Product and Service Strategies
o Determined by five variables:o Tangibles
o Reliability
o Responsiveness
o Assurances
o Empathy
Quality of Services
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CHAPTER 11 Product and Service Strategies
o Product line - Series of related products
o Desire to growo Growth potential is limited if a company
focuses on a single product
o Example: L. L. Bean began by selling a single style of boots but has grown by selling a variety of products
Development of Product Lines
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CHAPTER 11 Product and Service Strategies
o Assortment of product lines and individual product offerings
o Product mix widtho Number of product lines a firm offers
o Product mix lengtho Number of different products a firm sells
o Product mix deptho Variations in each product that the firm
markets
The Product Mix
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CHAPTER 11 Product and Service Strategies
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CHAPTER 11 Product and Service Strategies
o Increasing frequency of use
o Increasing the number of users
o Finding new uses
o Changing package sizes, labels, or product quality
Extending the Product Lifecycle
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CHAPTER 11 Product and Service Strategies
o Marketers prune product lines and eliminate marginal products to preserve limited resources
o Firms may carry unprofitable items to carry a complete product line
o Shortages or raw materials can prompt a firm to discontinue production
o Firm may drop products that don’t fit into the direction in which it plans to grow
Product Deletion Decisions
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