MKT 300- Chapter 12

Core Product

this is the need the product fulfills - what is the reason you bought this product or need you were trying to fulfill

Servicescape

the use of physical evidence to design service environments Ambient conditions Inanimate objects Other physical evidence

Dynamically Continuous

this is a new form or product category, that is way better and more advanced than the original product Laptop or tablet.

Fad

very popular but stuck around for a short amount of time

Services Marketing

Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything

Innovation Contiuum

. .

Concept Testing

develop prototypes of the product and test them with market research. Goal is to confirm products acceptance (or rejection) by the market. Rejecting a product at this stage can save considerable expenses considering the costs associated with a products launch. Types of research varies but can be a traditional test markets (where product is launched into select markets to determine consumer response) or a simulated test market (small samples of consumers are invited to a private location). Traditional test markets are losing favor among many consumer companies as these test provide competitors with valuable information.

3. Compatibility

matches consumer needs

1. Relative Advantage

new product is perceived as superior to existing substitutes

Discontinuous

new to the world, first automobile, first telephone, first composed songs. Products never seen before that solve a problem Computer

Possession Processing

- A change to something you own - Don't have to be there Ex: Taking a shirt to the dry cleaner, taking your car to the shop

Shopping Products

- A little more difficult to find shopping for a specific brand - Items for which buyers are willing to expend considerable effort in planning and making purchases - Typically not all retailers carry these products, nor do the retailers who do carry them have all brands available. Ex: want to buy levi jeans cant walk into any store and expect them to have the product, need to put in a little bit of effort

Compelling Experience

- Adding service aspects to a product often transforms the product from a commodity into a compelling experience - a service that you can not do often. Ex: sleeping at hotel that offers room under water with sharks circling you as you sleep

Successful New Products

- Offer a strong relative advantage - Reflect better understanding of customer needs, and beat the competition to market - Exhibit higher performance-to-cost ratios and higher contribution margins - Are launched with larger budgets - Have stronger top management support

Specialty Products

- One option or specialty products - only sold at one location - Items with unique characteristics that buyers are willing to expend considerable effort to obtain; usually consumers will not accept substitutes Ex: high-end cars, Tiffany jewelry

Why do firms focus on Services?

- Services frequently provide higher profit margins than products - Customer satisfaction and loyalty are driven by service excellence - Services can be used as a differentiation strategy in competitive markets in fact, all businesses are becoming service businesses - service quality= very subjective and hard to rate

Promotion Strategy

- Stressing tangible clues - Using personal information sources (celebrity endorsements) - Create a strong organizational image - Engage in post purchase communication (call to make sure your car service repair experience was satisfactory)

Product life Cycle Chart

- Where the sale curve peaks. - Where the profit peaks. - Why do profits peak faster than sales in the beginning. At the start you can charge a higher price, but as competitors join the race you will have to lower your price. - Not all products go through all the phases of the life cycle? NO .

Mental Stimulus Processing (Experiential)

- You are experiencing this - Any entertainment experiment Ex: Coming to class because you think its better then just getting the notes from someone, going to the game rather then watching it on TV

Tangibles

- appearance of physical facilities, equipment, personnel, communication material - components of the physical environment that can be expected. Tangibles in the environment give me some idea of what type of service I can expect. Example nice restaurant you are probably going to spend a lot of money

Convenience Products

- available everywhere - Many convenience items are available on a self-service basis at retail, so producers depend on packaging and promotion - Relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effor ex: bottles of water, multiple options and locations

Empathy

- caring, individualized attention - Human component. Individual situations caring or understanding of certain situations. Treat me like an individual.

Reasons for New Product Failure

- ignoring unfavorable market research - overestimating market size marketing mix decision errors - stronger than anticipated competitive actions - didn't solve my problem - poor match between features and customers desires - overestimation of market size

Variability

- is the difference in consistency from one service transaction to the next - It makes it impossible for a service operation to achieve 100 percent perfect quality on an ongoing basis inconsistent services

Intangibility

- is the primary source from which the other three characteristics emerge - Services cannot be seen, felt, tasted, or touched in the same manner that goods can be sensed - Difficult to evaluate even after consuming the service - Cant tell or predict what is going to happen and extremely difficult to evaluate. Why this taste better than another product, or why one establishment is better than another

Inseparability

- is the simultaneous production and consumption of the service - Service consumer has to be there at the same time as the service provider to experience the optimal service (even self-service technologies) - Have to be there at the same time. When you take your dog to the vet, your dog has to go with you. Consume the service as it is being produced.

Perishability

- means that a service cannot be saved, its unused capacity cannot be reserved, and it cannot be inventoried - "Use it or lose it" - Anything with capacity; if unsold, lost revenue Capacity - you cant go beyond it, has a limit. Every services has this example seats on the plane. Capacity is very hard to predict in services.

Reliability

- perform promised service dependably an accurately - done right the first time, reliable in giving me a positive experience

Responsiveness

- willingness to help customers and provide prompt, timely service - it is taking them much longer to perform the services than I thought. It took them forever to do this.

Creating Compelling Experiences

A compelling experience, something that is different Economic value progresses from commodities to goods to services to experiences

Product Line

A group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations - depth

Augmented Product

All of the extra features of the product that might not be necessary for the product to work, but that can enhance the experience. ex: customer support, warranties

Benefit Concept

All products, be they goods or services, deliver a bundle of benefits to the consumer - benefit concept is the encapsulation of these benefits in the consumer's mind The service experience demonstrates that consumers are an integral part of the service process You aren't buying 120 credits, its about the experience of college How well did I evaluate the ending experience at ASU Service experience ex: has to do with people, the people you met at college

Levels of a Product

Augmented product Actual Product Core product - Tangible or intangible or a combination - Functional, social, and psychological utilities or benefits.

Brand Extensions

Current brand to new product class - taking a brand consumers already knew and apply it to a new product ex: cheatos chapstick

Service as a Product

For example, hotels, telecommunication, banking, consulting, healthcare, software services

Customer Service

For example, taking requests, answering customer questions, responding to complaints

The Marketing Mix

Four marketing activities—product, pricing, distribution, and promotion—that a firm can control to meet the needs of customers within its target market - Product: Goods, services, or ideas that satisfy customer needs - Price: Decisions and actions that establish pricing objectives and policies and set product prices - Place: The ready, convenient, and timely availability of products - Promotion: Activities that inform customers about the organization and its products

The Gap Model of Service Quality

GAP 1 - is everything pre service. Once you enter an establishment you have some expectations right when you walk in the door. GAP 5 - post service. After the service is over you are comparing what you expected to what you got.

Disconfirmation Paradigm

If expectations do not meet the actual performance they are disconfirmed. You can also have positive disconfirmations.

Line Extension

Improvement company comes up with new improved product to solve your problems Ex: new and improved; new colors

New Product Development

New product ideas can be dropped at any step (hence the garbage can). There are various statistics in the literature that quantify this process and each will be context specific. There are some reports that it takes 300 ideas in the generation stage to have one product that reaches the market. The hit rate (ideas to commercialized new products) will vary between the consumer (more ideas required) and industrial markets (fewer ideas required). .

Information Processing

Paying for the expertise of another Ex: accounting, training, financial services

Processing (Service Strategy)

People processing (transportation services, health clubs) - Physical change to you Ex: Renting a car, psychically changing your location

The Services Marketing Mix: 7 P's

Product, Price, Place, Promotion, and People= is the transactional interface between an organization and the consumers. In most of the cases, people buy from people; this is why Customer Relationship Management plays an important role in today's business culture. Process= is the procedure, mechanism and flow of activities to produce a product or to provide services or products to consumers. ex: the prevailing ISO standards (such as ISO 9001) are designed to help organizations ensure their process can meet the needs of customers and other stakeholders in their field. Physical Evidence= the tangible element that allows the consumers to make judgements about the organization. ex: websites, paper work (such as tickets), uniforms, business cards

Diffusion

Rate at which a product is dispersed - The process by which the acceptance of an innovation is spread by communication to members of social system over a period of time.

Service Providers

Relationships Company --> ASU employees --> Eaton --> customers, us - Making promises before you attend the school Is he able to keep the promise about taking about marketing ASU has to provide (facilitate) him to be able to teach us

Importance to long-term success

Strong correlation between new product success and a company's profitability and sales growth - Price is important within an acceptable range (costs about what you would think it would). If it is 10 cents more expensive of course you don't want to pay more, but you will probably still buy the product. Ex: - Industry leaders obtain 49 % of revenues from products developed in the last 5 years - Least successful companies: 11 % of revenues from products developed in the last 5 years

Levels of a Service Product

The actual or "tangible" product is missing as services are intangible. The core and augmented aspects remain . Core= the reason why Augmented= you can add benefits and bonuses

Depth of Product Mix

The average number of different products in each product line

Managing Service Quality

The effective marketing of services requires that managers learn what customers want and expect in their interaction with the service provider (service encounter). If expectations do not equal experience, a gap exists. Way to understand and measure the experience you have have just encountered. If you expectations are not meet by the service there is a GAP.

Market Testing

The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation. - Test markets are great indicators, but take it with a grain of salt. Don't be to high or low on market testing results. ex: he showed us in class was clear Pepsi product. Taste the same just looks clear. Killed it in test market. Couldn't't keep crystal Pepsi on store shelves, people had to try the new product.

Width of Product Mix

The number of product lines a company offers

Product Mix

The total group of products that an organization makes available to customers - width

Service as Value-added for Manufactured Products

Training, installation, repair services connected with a physical product

Adoption

What stage of diffusion is it in - The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product. - The five stages of the traditional adoption process are awareness, interest, evaluation, trial, and adoption.

Product Item

a specific version of a product

Types of "Products"

anything that people pay for that solves on of their problems

Continuous

continuous just means incremental change. Example adding camera to a cellphone or touch bar on new mac book pros.

2. Complexity

degree of difficulty to use/understand - the easier to use, the easier to adopt

4. Trialability

degree to which product is capable of being tried on a limited basis; leads to product loyalty FREE SAMPLES

Business Analysis

does this make financial sense, setting prices Outline of the sales and profit objectives to see if the new product will meet set goals. Products that fail this stage may get a second life by reformulating the concept. Perhaps finds ways to lower costs, increase price, or expand the target market.

Idea Generation

dream up the idea for a new product or service. Ideas can come from everywhere including internal (R&D departments) and external sources (customers making product suggestions). In this stage the more ideas the better.

Assurance

employees must be knowledgeable, courteous, convey trust and confidence - TRUST. Do I trust this person?

Commercialization

entire population us using product - launch the new product into the market

Concept Development

how are you going to produce your product? In this stage, the concept is becoming more focused as the features and benefits of the product idea are being outlined. These features and benefits can change later after business analysis and market testing stages are conducted.

Services

intangible dominant - experience attributes - credence attributes goods and services are often a combination ex: restaurants

5. Observability

product's benefits, attributes can be seen by others, imagined, or described

Style

reposition the product to peak consumer interest again, changes in the product can have an influence on the product life cycle

Idea Screening

review the ideas to discard bad ideas in an attempt to find the best ones that can advance to the next stage.

Market Testing

sample population is testing thee product

Goods

tangible dominant - search attributes

Actual Product

tangible features that are necessary for the product to function - has to be there or people wont buy it ex: you wouldn't buy a car that doesn't have an engine - product design, packaging, specific attributes