Marketing Exam 3 (ch10-12
Product Line Contraction(ch 10)
Contracting product lines is a strategic way to deal with overextension. Benefits of product line contraction: -Resources become concentrated on the most important products -Managers do not waste resources trying to improve the sales and profits of poorly performing products -New-product items have a chance of being successful owing to availability of financial and human resources
Repositioning(ch 10)
Factors that motivate a firm to reposition an established brand: -Changing demographics -Declining sales -Changes in the social environment The second strategy is repositioning. Repositioning changes consumers' perceptions of a brand. Changing demographics, declining sales, or changes in the social environment often motivate firms to reposition established brands.
Labeling(ch 10)
Labeling takes one of two forms—persuasive or informational. Persuasive labeling: a type of package labeling that focuses on a promotional theme or logo, and consumer information is secondary Informational labeling: a type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase Greenwashing: attempt to give the impression of environmental friendliness whether or not it is environmentally friendly
Adjustments to Product Items, Lines, and Mixes(ch 10)
Over time, firms change product items, lines, and mixes to take advantage of new technical or product developments or to respond to changes in the environment. The four strategies for making these changes are: Product modification Product repositioning Product line extension Product contraction
Exhibit 12.1 Gap Model Of Service quality(12)
See table
Exhibit 12.2 Core and Supplementary Services for a Luxury Hotel
See table slide 17
Test Marketing(11)
Test marketing: the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation Allows management to evaluate alternative strategies and to assess how well the various aspects of the marketing mix fit together Frequently takes one year or longer and costs can exceed $1 million Simulated (laboratory) market testing: the presentation of advertising and other promotional materials for several products including a test product, to members of the product's target market
Exhibit 10.2 The Power of Brand Equity
see slide 15 and 16
Exhibit 10.3 Comparison of Manufacturer's and Private Brands from the Reseller's Perspective(ch 10)
see slide 19
Benefits of Product Lines(ch 10)
Benefits to organizing related items into product lines: Advertising economics: Product lines provide economies of scale in advertising Package uniformity: Packages in the product line may have a common look but continue to maintain their individual identities Standardized components: Product lines allow firms to standardize components, thus reducing manufacturing and inventory costs Efficient sales and distribution: A product line enables a full range of choices to customers, which results in better distribution and retail coverage Equivalent quality: All products in a line are perceived as having similar quality
Decline Stage(11)
Decline stage: a long-run drop in sales Large inventories of unsold items Elimination of all nonessential marketing expenses Discontinue purchasing the products
Packaging Functions(ch 10)
Functions of packaging: Contain and protects products Promote products Does more than identify the brand and list ingredients—it also differentiates a product from competing products FDA is looking to add more information to food labels Facilitate storage, use, and convenience of products Retailers like packages that are easy to ship, store, and stock on shelves Extend product's shelf life Facilitate recycling and reduces environmental damage
Unique Aspects of Nonprofit Organization Marketing Strategies(12)
Like their counterparts in business organizations, nonprofit managers develop marketing strategies to bring about mutually satisfying exchanges with target markets. Nonprofit organizations do not seek to make a profit for redistribution to owners or shareholders. Objectives To generate enough funds to cover expenses To provide equitable, effective, and efficient services Selection of target markets Apathetic or strongly opposed targets—strongly opposed to receiving their services Pressure to adopt undifferentiated segmentation strategies—fail to recognize the advantages Complementary positioning—complement, rather than compete Product decisions Benefit complexity Benefit strength Involvement Place (distribution) decisions Success is determined by a nonprofit organization's ability to distribute its service offerings when and where customers want them Product decisions Benefit complexity Benefit strength Involvement Place (distribution) decisions Success is determined by a nonprofit organization's ability to distribute its service offerings when and where customers want them
Manufacturers' Brands Versus Private Brands(ch 10)
Manufacturer's brand: the brand name of a manufacturer Private brand: a brand name owned by a wholesaler or a retailer No longer seen as low-cost, low-quality products On average, bring 10 percent higher profit margins than manufacturer brands because there is low overhead and no marketing costs Captive brands: a brand manufactured by a third party for an exclusive retailer, without evidence of that retailer's affiliation Can be priced similarly to manufacturers' brands and displayed alongside mainstream products
Product Items, Lines, and Mixes (ch 10)
Rarely does a company sell a single product. Instead, it sells a variety of product items that may be categorized into product lines and product mixes. Product items: a specific version of a product that can be designated as a distinct offering among an organization's products Product line: a group of closely related product items Product mixes: all products that an organization sells Product mix width: the number of product lines an organization offers Firms increase width in order to diversity risk and capitalize on established reputations Product line depth: the number of product items in a product line Firms increase depth in order to attract buyers with different preferences, to increase sales and profits by further segmenting the market, to capitalize on economies of scale in production and marketing, and to even out seasonal sales patterns
Idea screening(11)
Screening: the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason Concept test: a test to evaluate a new-product idea, usually before any prototype has been created After new ideas have been generated, they pass through screening, which is the first filter in the product development process. Concept tests are considered fairly good predictors of success for line extensions. They have also been relatively precise predictors of success for new products that are not copycat items, are not easily classified into existing product categories, and do not require major changes in consumer behavior.
Services (ch 12)
Service: the result of applying human or mechanical efforts to people or objects Involve a deed, a performance, or an effort that cannot be physically possessed Service-oriented industries that contribute to the U.S. economy Technology, financial services, health care, and retail
Price Strategy(12)
Services present two pricing challenges: Should pricing be based on a specific task or be time-based For services composed of multiple elements, should pricing be based on a bundle or each element priced separately Three categories of pricing objectives Revenue-oriented pricing Focuses on maximizing the surplus of income over costs A limitation is that it can be difficult to determine the costs for many services Operations-oriented pricing Seeks to match supply and demand by varying prices Patronage-oriented pricing Tries to maximize the number of customers using the service A firm can use more than one type of pricing objective
Idea Generation(11)
Sources of new-product ideas Customers: The marketing concept that customers' wants and needs should be the springboard for developing new products. Employees: Employees know a company's products and processes better than anyone else. Distributors: A well-trained sales force routinely asks distributors about needs that are not being met. Competitors: No firms rely solely on internally generated ideas for new product. Research and development: Product development goes beyond applied research by converting applications into marketable products. Consultants: Outside consultants are always available to examine a business and recommend product ideas. Other experts: The goal of brainstorming is to get a group to think of unlimited ways to vary a product or solve a problem. Product development: a marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products Brainstorming: the process of getting a group to think of unlimited ways to vary a product or solve a problem
Branding(ch 10)
The success of any business or consumer product depends in part on the target market's ability to distinguish one product from another. Brand: a name, term, symbol, design, or combination that identifies a seller's products and differentiates them from competitors' products Brand name: that part of a brand that can be spoken, including letters, words, and numbers Brand mark: the elements of a brand that cannot be spoken
Product Line Extensions(ch 10)
The third strategy is product line extensions. Product line extension: adding additional products to an existing product line in order to compete more broadly in the industry A company can add too many products, or demand can change for the type of products that were introduced over time Product lines can be overextended when: Products do not contribute to profits Manufacturing or marketing resources are disproportionately allocated Items in the line are obsolete
Place (distribution) strategy(12)
A key factor in influencing the selection of a service provider is convenience Service firms must also determine the number of outlets to use Intensity of distribution should meet, but not exceed, the target market's needs and preferences Two few outlets may inconvenience customers, too many may raise costs unneccessarily Direct or indirect distribution Intangible nature of services may require direct distribution Location of a service reveals the relationship between its target market and distribution strategy For time-dependent service providers, scheduling is an important factor Discussion/Team Activity Identify specific service providers who have utilized the distribution strategies described above.
Benefits of Branding(ch 10)
Branding has three main purposes: product identification repeat sales new-product sales Brand equity: the value of a company or brand name High brand equity comes from high awareness, perceived quality and brand loyalty among customers Global brand: a brand that obtains at least one-third of its earnings from outside its home country, is recognizable outside its home base of customers, and has publicly available marketing and financial data The best generator of repeat sales is satisfied customers Branding helps consumers identify products they wish to buy again and avoid those they do not Brand loyalty: consistent preference for one brand over all others
Business Analysis(11)
Business analysis: the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated The newness of the product, the size of the market, and the nature of the competition all affect the accuracy of revenue projections Analyzing overall economic trends and their impact on estimated sales is especially important in product categories that are sensitive to fluctuations in the business cycle
Co-branding(ch 10)
Co-branding: placing two or more brand names on a product or its package Co-branding is a useful strategy when a combination of brand names enhances the prestige or perceived value of a product or when it benefits brand owners and users. Types of co-branding: Ingredient branding: Identifies the brand of a part that makes up the product Cooperative branding: Occurs when two brands receiving equal treatment borrow from each other's brand equity Complementary branding: Suggests usage by advertising and marketing products that are used together Co-branding is a useful strategy when a combination of brand names enhances the prestige or perceived value of a product or when it benefits brand owners and users
Commercialization(11)
Commercialization: the decision to market a product Commercializing a product sets several tasks in motion: Ordering production materials and equipment Starting production Building inventories Shipping the product to field distribution points Training the sales force Announcing the new product to the trade Advertising to potential customers
Global issues in Packaging(ch 10)
Companies must also consider global packaging needs Labeling Proper translating ingredient, promotional, and instructional information Aesthetics Colors may have different connotations Package size Climate and long-distance shipping Sturdier and more durable packaging needed for products sold overseas The major labeling concern is the proper translation of ingredient, promotional, and instructional information on labels. Package aesthetics are important from a cultural perspective. For example, colors may have different connotations in different countries. Package size is influenced by the availability of refrigeration, amount of storage space, and purchasing power of buyers. Extreme climates and long-distance shipping necessitate sturdier packages. Packages may need a longer shelf life.
Types of Consumer Products( ch 10)
Convenience product: a relatively inexpensive item that merits little shopping effort Buy regularly without much planning Usually require wide distribution Shopping product: a product that requires comparison shopping because it is usually more expensive than a convenience product and found in fewer stores Consumers willing to invest some effort into comparing shopping products to get the desired benefits Two types: Homogeneous: shopping products that are basically similar Consumers look for the lowest-priced brand that has desired features Heterogeneous: Shopping products are essentially different Consumers have trouble comparing because prices, quality, and features vary so much Specialty product: a particular item for which consumers search extensively and are very reluctant to accept substitutes Marketers use selective, status-conscious advertising to maintain product's exclusive image Distribution is limited to one or very few outlets in geographic areas Unsought product: a product unknown to the potential buyer or a known product that the buyer does not actively seek New products fall into this category until advertising and distribution increase consumer awareness of them
Service Quality(12)
Customers evaluate service quality by five components: Reliability Ability to perform a service dependably, accurately, and consistently One of the most important components Responsiveness Ability to provide prompt service Ultimate in responsiveness is offering service twenty-four hours a day, seven days a week Assurance Knowledge and courtesy of employees and their ability to convey trust Skilled employees who treat customers with respect and make customers feel that they can trust the firm, exemplify assurance Empathy Caring, individualized attention to customers Tangibles Physical evidence of the service
Discussion Point Types of Consumer Products(ch 10)
Discussion/Team Activity Name products and services that fall into each of the consumer product categories: Convenience: Candy, soft drinks, deodorant, aspirin, hardware, and dry cleaning Shopping: Homogeneous shopping products—Washers, dryers, and televisions Heterogeneous shopping products—Furniture, clothing, housing, and universities Specialty: Fine watches, expensive automobiles, and gourmet restaurants Unsought: New products, insurance, burial plots, and encyclopedias
The Service Mix(12)
Each organization's service mix represents a set of opportunities, risks, and challenges Service strategy decisions What new services to introduce to which target market What existing services to maintain What services to eliminate
Product Characteristics and the Rate of Adoption(11)
Five product characteristics can be used to predict and explain the rate of acceptance and diffusion of a new product Complexity: The more complex the product, the slower is its diffusion. Compatibility: Incompatible products diffuse more slowly than compatible products. Relative advantage: The degree to which a product is perceived as superior to existing substitutes. Observability: The degree to which the benefits or other results of using the products can be observed by others and communicated to target customers. Trialability: The degree to which a product can be tried on a limited basis.
The Gap Model Service Quality(12)
Gap model: a model identifying five gaps that can cause problems in service delivery and influence customer evaluations of service quality Gap 1: the gap between what customers want and what management thinks customers want Gap 2: the gap between what management thinks customers want and the quality specifications that management develops to provide the service Gap 3: the gap between the service quality specifications and the service that is actually provided •Gap model, cont. •Gap 4: the gap between what the company provides and what the customer is told it provides •Communication gap •May be misleading or deceptive advertising •Gap 5: the gap between the service that customers receive and the service they want •Can be positive or negative •When one or more of these gaps is large, service quality is perceived as low •As gaps shrink, service quality perception improves •
Global Issues in New-Product Development(11)
Globalization of markets and competition provides a reason for multinational firms to consider new-product development from a worldwide perspective Succeeding in some countries often requires companies to develop products that meet the unique needs of these populations A firm that starts with a global strategy is able to better develop products that are marketable worldwide. In many multinational corporations, every product is developed for potential worldwide distribution, and unique market requirements are built in whenever possible. Some global marketers design their products to meet regulations in their major markets and then, if necessary, meet smaller markets' requirements country by country.
Growth Stage
In the growth stage, sales grow at an increasing rate, many competitors enter the market, and larger companies may acquire small pioneering firms. Profits rise rapidly, peak, and begin declining as competition increases. Aggressive brand advertising and communication of the differences between brands is the preferred promotion strategy. Adequate distribution is a major key to establish a strong market position and product success.
Individual Brands Versus Family Brands(ch 10)
Individual branding: using different brand names for different products Companies use individual brands when their products vary greatly in use or performance. Family branding: marketing several different products under the same brand name
Diffusion of Innovation(11)
Innovation: a product perceived as new by a potential adopter Diffusion: the process by which the adoption of an innovation spreads Five categories of adopters Innovators: Innovators are eager to try new ideas and products, almost as an obsession. Early adopters: A desire to earn the respect of others is a dominant characteristic among early adopters. Early majority: The next 34 percent to adopt. They weigh the pros and cons before adopting a new product and rely on group information. Late majority: The next 34 percent to adopt. They adopt a new product because most of their friends have already adopted it. Laggards: The final 16 percent to adopt. By the time laggards adopt an innovation, it has probably been outmoded. Marketers typically ignore laggards, who do not seem to be motivated by promotion and personal selling.
Inseparability(12)
Inseparability: the inability of the production and consumption of a service to be separated; consumers must be present during the production Makes consumers involved in the production of services they buy Services can not be produced in a centralized location and consumed in decentralized locations, as goods typically are
Intangibility(12)
Intangibility: the inability of services to be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed Evaluating the quality of services Search quality: a characteristic that can be easily assessed before purchase Experience quality: a characteristic that can be assessed only after use Credence quality: a characteristic that can be difficult to assess even after purchase as customers lack necessary knowledge or experience
Relationship Marketing in Services(12)
Many services involve ongoing interaction between the service organization and the customer. They can benefit from relationship marketing as a means of attracting, developing, and retaining customer relationships. Relationship marketing can be practiced at four levels: Level 1: Financial Pricing incentives to encourage customers to continue doing business Level 2: Social Uses pricing incentives but also seeks to build social bonds Firm stays in touch with customers, learns about their needs, designs services to meet those needs Level 3: Customization Encourages customer loyalty through intimate knowledge of individual customers: customer intimacy And development of one-to-one solutions to fit customers' needs Level 4: Structural Firm uses previous levels, but adds structural bonds Offering value-added services that are not readily available from other firms
Maturity stage(11)
Maturity stage: a period during which sales increase at a decreasing rate Saturated markets Annual models appear Lengthened product lines Service and repair assume important roles Heavy promotions to consumers and dealers Marginal competitors drop out Niche marketers emerge
Categories of New Products(11)
New product: a product new to the world, the market, the producer, the seller, or some combination of these Six categories of new products New-to-the-world products (or discontinuous innovations) create an entirely new market and are the smallest category of new products. New product lines allow a firm to enter an established market. Additions to existing product lines include new products that supplement a firm's established product line. Improvements or revisions of existing products may be significantly or only slightly changed. Repositioned products targeted at new markets or market segments. Lower-priced products provide performance similar to competing brands at a lower price
The Importance of New Products(11)
New products are important to sustain growth, increase revenues and profits, and replace obsolete items Some companies spend a considerable amount of money each year developing new products It can be difficult to decide when to replace a successful product The introduction of a new product is a monumental undertaking with a lot of open-ended questions
New Product Strategy(11)
New-product strategy: a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation It sharpens the focus and provides general guidelines for generating, screening, and evaluating new-product ideas Specifies the roles that new products must play in the organization's overall plan A new-product strategy is part of the organization's overall marketing strategy. It sharpens the focus and provides general guidelines for generating, screening, and evaluating new-product ideas.
What is nonprofit organization Marketing(12)
Nonprofit organization marketing: the effort by nonprofit organizations to bring about mutually satisfying exchanges with target markets Identifying desired customers Specifying objectives explicitly or implicitly Developing, managing, and eliminating programs and services Deciding on prices Scheduling events or programs Communicating their availability Often, nonprofit organizations that carry out these functions do not realize they are engaged in marketing.
Product Life Cycles(11)
Product life cycle (PLC): a concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death) Can be used to analyze a brand, a product form, or a product category Product categories have the longest life cycle Product category: all brands that satisfy a particular type of need The time a product spends in any one stage may vary dramatically
Product Modification(ch 10)
Product modification: changing one or more characteristics of a product Includes modification in: Quality: Change in a product's dependability or durability Lowering quality can result in a lower price. Increasing quality can help compete with rival firms Function: Change in a product's versatility, effectiveness, convenience, or safety Style: An aesthetic product change Planned obsolescence: the practice of modifying products so those that have already been sold become obsolete before they actually need replacement Some argue that planned obsolescence is wasteful and unethical
What is a product? (ch 10)
Product: everything, both favorable and unfavorable, that a person receives in an exchange -Tangible goods -Services -Ideas The product offering, the heart of an organization's marketing program, is usually the starting point in creating a marketing mix. Product: everything, both favorable and unfavorable, that a person receives in an exchange To most people, the term product means a tangible good. However, services and ideas are also products.
Why some products succeed and others fail(11)
Products fail for a number of reasons: No discernible benefit compared to existing products Poor match between product features and customer desires Overestimation of market size Incorrect targeting or positioning Too high or too low prices Inadequate distribution Poor promotion Simply an inferior product
Development(11)
The development stage can last a long time and thus be very expensive. Development: the stage in the product development process in which a prototype is developed and a marketing strategy is outlined This stage includes: Developing a prototype Sketching a marketing strategy Deciding on packaging, branding, and labeling Mapping out preliminary promotion, price, and distribution strategy Examining manufacturing feasibility The development process works best when all of the involved areas work together rather than sequentially Simultaneous product development: a team-oriented approach to new-product development
Implications for Market(11)
The diffusion process and the PLC concept all have implications for marketing managers The new-product development process is sometimes illustrated as a decay curve, with roughly half of the ideas approved at one stage rejected at the next The implication of the diffusion process to marketing managers is that the message may need to change over time
Introductory Stage(11)
The introductory stage represents the full-scale launch of a new product. During the introductory stage, sales normally increase slowly. Marketing costs are high due to higher dealer margins required to obtain adequate distribution and the cost of consumer incentives to try a product. Production costs are high. Advertising expenses are high, because consumers must be educated about the product's benefits. Promotion strategy focuses on developing product awareness and informing consumers about the product's potential benefits. It would require intensive personal selling. Promotion of convenience products often requires heavy consumer sampling and couponing. Shopping and specialty products demand educational advertising and personal selling to the final consumer.
Trademarks(ch 10)
Trademark: the exclusive right to use a brand or part of a brand Others are prohibited to use the brand without permission. Parts of a brand or other product identification may qualify for trademark protection. Sounds, shapes, ornamental colors or designs, catchy phrases, abbreviations Generic product name: Identifies a product by class or type and cannot be trademarked Companies that fail to protect trademarks face the risk of their product names becoming generic. This list includes aspirin, cellophane, thermos, monopoly, cola, and shredded wheat.
Marketing Implications of the Adoption Process(11)
Types of communication that aid the diffusion process Word-of-mouth communication: opinion leaders discuss new products with their followers and with other opinion leaders Communication directly from the marketer to potential adopters: different appeals are used to target the different categories of adopters
Universal Product Codes(ch 10)
Universal product codes (UPCs): a series of thick and thin vertical lines (bar codes) readable by computerized optical scanners that represent numbers used to track products First introduced in 1974 Help retailers prepare records of customer purchases, control inventories, and track sales
Discussion Point Manufacturer or Private Brand( ch 10)
Up & Up Equate Kraft Beauty 360 Maybelline Sensodyne Comforts Answers: Private (Target) Private (Walmart) Manufacturer Private (CVS) Manufacturer Manufacturer Private (Kroger)
Product Warranties(ch 10)
Warranty: a confirmation of the quality or performance of a good or service Express warranty: a written guarantee Implied warranty: an unwritten guarantee that the good or service is fit for the purpose for which it was sold Manufacturer that promises a full warranty must meet certain minimum standards Includes repair of any defects and replacement of the merchandise or a full refund Limited warranty: Any warranty that does not live up to this tough prescription must be "conspicuously" promoted
Global Issues in Branding and Packaging(ch 10)
When entering a foreign market with an existing product, a firm has three options for handling the brand name: One brand name everywhere: Company markets mainly one product and the brand name does not have negative connotations Adaptations and modifications: A one-brand name strategy is not possible when the name cannot be pronounced in the local language; is owned by someone else; or has a negative or vulgar connotation Different brand names in different markets: Local brand names are often used when translation or pronunciation problems occur
Exhibit 11.2 Four Stages of the Product Life Cycle
see slide 20 The product life cycle (PLC) is a widely familiar concept in marketing and is considered a useful marketing management tool. However, some critics have challenged the theoretical basis and managerial value of the PLC. The PLC traces the stages of a product's acceptance from its introduction to its decline. The PLC concept can be used to analyze a brand, a product form, or a product category. A product category includes all brands that satisfy a particular type of need.
Exhibit 11.3 Product Life Cycles for Styles, Fashions, and Fads
see slide 21 Typical life cycles for styles (such as formal, business, or casual clothing), fashions (such as miniskirts or baggy jeans), and fads (such as leopard-print clothing). Changes in a product, its uses, its image, or its positioning can extend that product's life cycle.
Exhibit 11.4 Relationships Between the Diffusion Process and the Product Life Cycle
see slide 28
Exhibit 11.1 New-Product Development Process
see slide 6 Traces the seven-step process, which is discussed in detail in this section. The exhibit is funnel-shaped to highlight the fact that each stage acts as a screen to filter out unworkable ideas
How services differ from goods(12)
•Characteristics of services: -Intangibility -Inseparability -Heterogeneity -Perishability
Promotion Strategy(12)
•Consumers and business users have more trouble evaluating services than goods, because services are less tangible. In turn, marketers have more trouble promoting intangible services than tangible goods. •Promotion strategies for services: •Stressing tangible cues •To make their intangible services more tangible, hotels turn down the bedcovers and put mints on the pillows. •Using personal information sources •A personal information source is someone consumers are familiar with (such as a celebrity) or someone they admire or can relate to personally. •Creating a strong organizational image •One way to create an image is to manage the evidence, including the physical environment of the service facility, the appearance of the service employees, and the tangible items associated with a service (such as stationery, bills, and business cards) •Strong branding •Engaging in postpurchase communication •Postpurchase communication refers to the follow-up activities that a service firm might engage in after a customer transaction. •Postcard surveys, telephone calls, etc.
Core Supplementary Service Products(12)
•Core service: the most basic benefit the customer is buying •Supplementary service: a group of services that support or enhance the core service -Firms usually emphasize supplementary services to create a competitive advantage
Customization/standardization(12)
•Customized services are more flexible, respond to individual customers' needs, and can command a higher price •Standardized services are more efficient and cost less •Mass customization: a strategy that uses technology to deliver customized services on a mass basis
Heterogeneity(12)
•Heterogeneity: the variability of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods -Standardization and training help increase consistency and reliability
Global Issues in Services Marketing(12)
•Many U.S. service industries have been able to enter the global marketplace because of competitive advantages •To be successful in the global marketplace, firms must: -Determine the nature of their core product -Design marketing mix that reflects each country's cultural, technological, and political environment The international marketing of services is a major part of global business, and the United States has become the world's largest exporter of services. Competition in international services is increasing rapidly.
Nonprofit Organization Marketing(12)
•Nonprofit organization: an organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment •Governments, private museums, theatres, schools, and churches •Nonprofit organizations account for more than 20 percent of the economic activity in the United States.
Perishability(12)
•Perishability: the inability of services to be stored, warehoused, or inventoried -Service providers need to find ways to synchronize supply and demand
Discussion Point Service Characteristics(12)
•Read the following examples: -A movie theater experiences low levels of business on Tuesdays. To counteract this, they offer tickets for $5 on Tuesdays. -Vic is usually satisfied with his haircuts at the barber shop, but today a new barber cut his hair and did a terrible job. -Google is one of the world's most valuable brands, even though its product offerings cannot be touched or owned. -A dentist performs certain activities for his patients, while her patients simultaneously use her services. - For each example, choose which of the service characteristics is being described: intangibility, inseparability, perishability, or heterogeneity. - -Answers: 1.Perishability 2.Heterogeneity 3.Intangibility Inseparability
Product (service) strategy(12)
•Service as a process—two broad categories of things get processed in service organizations: people and objects •Based on these, service processes can be placed into one of four categories •People processing •When service is directed at a customers. Examples: transportation services and healthcare •Possession processing •When the service is directed at customers' physical possessions. Examples: lawn care, dry cleaning. •Mental stimulus processing •When services are directed at people's minds. Examples: theater performances and education •Information processing •When services use technology or brainpower directed at a customer's assets. Examples: insurance and consulting
Internal Marketing in Service Firms(12)
•Services are performances, so the quality of a firm's employees is an important component in building long-term relationships with customers. •To satisfy employees, companies have designed and instituted a wide variety of programs such as flextime, on-site day care, and concierge services. •Internal marketing: treating employees as customers and developing systems and benefits that satisfy their needs •Critical in service firms •Employees deliver the brand promise directly to customers •
