products and services for consumers chapter 11 11.1 product concepts and component product concepts...
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Products and Services for Consumers
Chapter
11
11.1 product concepts and component Product Concepts
A product is a good, service, or idea- Tangible Attributes- Intangible Attributes
Product classification - Consumer goods - Industrial goodsLife Span Based Product Classification
Durable
Non-Durable
Disposable
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product Component Model
Repair and maintenance
SUPPORT SERVICESCOMPONENT
CORECOMPONENT
Installation
Instructions
Other related services
Deliveries
Warranty
Spare parts
Legal
Trademark
Brand name
Legal
Product platform
Design features
Functional features
Legal
PACKAGINGCOMPONENT
Price
Quality
Package
Styling
domestic market extension concept Domestic Product extension
multi-domestic market concept Differentiated products for each unique marketglobal market concept
Global products marketed worldwide
11.2 Global Markets and Product Development
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
11.3 Quality
Market-Perceived QualityMarket-Perceived Quality
Performance QualityPerformance Quality
““Mad Cow”Mad Cow”
Swiss Swiss
FranceFrance
11.4 Packaging and Green Marketing
Packaging serves three major functions: protection, promotion, and user convenience.
Package aesthetics must be a consideration in terms of the promotional role of packaging: prudent choice of colors and package shapes 、 pattern; package size
Green Marketing
4Rs - redesign, reduce,recycle,reuse
11.5 Brands
Bundle of images and experiences in the customer’s mindA promise made by a particular company about a particular productA quality certificationDifferentiation between competing products
11.5a Brand Equity
A strong brand is a global marketing asset.The Most Valuable Brands
RANK Value (billions)
RANK Value (billions)
1. Coca-Cola 69.9 7. Disney 32.6
2. Microsoft 65.1 8. Ford 30.1
3. IBM 52.8 9. McDonald’s 25.3
4. GE 42.4 10. AT&T 22.8
5. Nokia 35.0 11. Marlboro 22.0
6. Intel 34.7 12. Mercedes 21.7
11.5a Brand Equity
An asset that represents the value created by the relationship between the brand and customer over time.
The added value that accrues to a product as a result of investments in the marketing of the brand.
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
11.5b Brand Strategies
Global BrandsGlobal Brands
National BrandsNational Brands
Global/National Brand MixGlobal/National Brand Mix
Private BrandPrivate Brand
Global brands
worldwide use of:–name–sign (logos)–symbols
‘brand equity’ –the main asset of some corporations–use this equity to create worldwide image (which may proceed products)
e.g. Top 20 Global Brands
Global brands have the same name and similar image and positioning throughout the world
Operated under the same global brand strategy
While flexible Marketing combination.
National brand
Brand locally
Importance of nationalistic pride
Be rebuilt as global brand
Global/National Brand Mix same or different names across borders ?
dual strategy
-Global brand - many country-specific brands
Example: Unilever Nestlé
1.1a Globalization
Jack Welch : 1990s
Globalization
Nestle’s Branding Tree
10 Worldwide Corporate Brands
45 Worldwide Strategic BrandsResponsibility of general management at strategic business unit level
140 Regional Strategic BrandsResponsibility of strategic business unit and regional management
7,500 Local BrandsResponsibility of local markets
•Nestle•Carnation•Buitoni
•Kit Kat•Polo•Cerelac•Baci
•Macintosh•Vittel•Contadina•Stouffer’s
•Texicana•Brigadeiro•Rocky•Soils
Examples
•Herta•Alpo•Findus
•Mighty Dog•Smarties•After Eight•Coffee-Mate
•Maggi•Perrier•L’Oreal
SOURCE: Adapted from Andrew J. Parsons,”Nestle: The Visions of Local Managers,”The McKinsey Quarterly, no 2, 1996, 5-29;see also http://www.nestle.com; http://brand/index.asp.
Nestlé Brand expansion strategy: - acquiring well-established national brands - using global brands
brands local but technology global and people regional
Global/National Brand Mix It depends-the market dicates.‘global brands where possible, national brands where necessary’
Private brands
private (distributor’s ) brands – owned by the retailers– increasingly common in many sectors (supermarkets)
Wal-Mart vs Proctor & Gamble–who controls channels?–source of their respective power?–which brand is better known?
private brands may enjoy significant competitive advantages
–higher margins preferred shelf space–strong in-store promotion
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Products and CultureA product is more than a physical item. It is a bundle of satisfactions (or utilities) that the buyer receives.Cultural Influences: A close study of the meaning of a product shows to what extent the culture determines an individual’s perception of what a product is and what satisfaction that product provides.When analyzing a product for a second market, the extent of adaptation required depends on cultural differences in product use and perception between the market the product was originally developed for and the new market.Irwin/McGraw-Hill
11.6a Innovative Products and Adaptation
product life cycle and acceptance of new products
–some examples: telegrams/ telex/ fax machines/ cellular phones/ e-mail
In stage of innovation, the technology of a new product is Ⅰnewly invented;the new product is really R&D intensive product;there is no export.
In stage of technology diffusion, the technology is Ⅱmature and the production process becomes standard;the product becomes capital and skilled-labor intensive product;the innovation country exports to other countries to satisfy the rapidly increased demands abroad.
In Stage of technology stagnation, the technological Ⅲcycle comes to the end;the product becomes labor intensive. The less developed countries take the advantage of low-wage labor and become the main producers and exporters
1.1a Globalization
Jack Welch : 1990s
Globalization
–starts with new products–distributed through channels–over a (variable) time period–among members of a social system
Three extraneous variables affecting the rate of diffusion of an object:– the degree of perceived newness–The perceived attributes of the innovation–The method used to communicate the idea
11.6b Diffusion of Innovations
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Degree of Newness
Congruent InnovationsCongruent Innovations
Continuous InnovationContinuous Innovation
Dynamically Continuous InnovationDynamically Continuous Innovation
Discontinuous InnovationDiscontinuous Innovation
-no real change for consumer
- minor variations of existing product
- changes in life style
- truly new product/ use/ behavior
factors affecting adoption rate
Characteristics of Innovations
Relative Advantage over older products
Compatibility
Complexity
Trialability
Observability
(Kellogg is India - ‘breakfast’?)
11.7 Marketing Consumer Services
Globally
Product
- tangible goods
- intangible services
commercial services
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
11.7a Services Opportunities in Global Market
Top Consumer Services Exports
1. Tourism 5. Telecommunications
2. Transportation 6. Entertainment
3. Financial Services 7. Information
4. Education 8. Health Care
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
11.7b Unique Characteristics of Services
Intangibility; Inseparability;
Heterogeneity; Perishability
• Inseparable in that its creation cannot be separated from its consumption.
• Heterogeneous in that it is individually produced and is thus virtually unique.
• Perishable in that once created it cannot be stored but must be consumed simultaneously whit its creation.
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
11.7c Four Barriers That Face Consumer Services Marketers
1. Protectionism
2. Controls on Transborder Data Flows
3. Protection of Intellectual Property
4. Cultural Requirements for Adaptation