Professional Documents
Culture Documents
MM 4 4th Edition Dawn Iacobucci Solutions Manual Download
MM 4 4th Edition Dawn Iacobucci Solutions Manual Download
CHAPTER OUTLINE
A “product” is the general term used for both goods and services. Sometimes the term “product”
is also used in a more general term, referring to the full product profile; that is, the entire market
offering, including the product along with its price, the image of the brand, etc. The product is
the most central of the 4Ps, the ultimate thing the customer is purchasing.
TEACHING NOTE: Students can be asked to discuss why the product is the most central of
the 4Ps.
1
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
Marketing is an exchange because the company offers something and the customer offers
something in return. The customer and company, seeks something of value, and each offers a
trade. Some segments of customers will seek value and low prices, whereas others will seek
premium quality. Other customers seek specific attributes, quite idiosyncratic features and
benefits. The question from the company’s side of the exchange is: what is it that the company is
well-suited to offer to its customers? What will the company’s value proposition be? Marketers
have long realized the benefits of morphing short-term oriented purchase-transaction exchanges
into longer-term relationship marketing. The repeated nature of a relational exchange begins with
customer satisfaction and loyalty, and such interactions strengthen and come to fruition in
customer relationship management (CRM) and database marketing systems.
TEACHING NOTE: Given the importance of retaining existing customers, students can be
asked to choose companies offering different products and discuss what those companies
2. How
did toare Goods
retain theirDifferent
customersfrom
underServices?
particular circumstances.
This section relates to knowledge objective #2 and #3
Intangibility
Goods and services are on a continuum. As depicted in Figure 6.1, some products are “pure”
goods and some services are pure services. Other purchases are a mix of obtaining both a good
and a service. Goods are tangible whereas, services are intangible.
The goods-to-services continuum is related to the concepts of search, experience, and credence.
Search qualities are those attributes that may be evaluated prior to purchase, as the customer
learns about the competitive offerings.
Experience attributes are those that need some trial or consumption before evaluation.
Credence qualities are those that are difficult to judge even post-consumption. Professional
service providers are dominated by credence elements.
Goods are dominated by search and experience qualities, and services are mostly comprised of
experience and credence qualities.
TEACHING NOTE: Students can be asked to explain how search, experience, and credence
play a role in distinguishing goods from services. Since credence qualities are difficult to
judge post-consumption, students can be asked to explain what their importance is?
Perishability
2
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
Services are “simultaneously produced and consumed” whereas; goods can be manufactured and
then inventoried in distribution warehouses, most services have to be created on the spot in the
presence of the customer. Thus, services tend to be more perishable.
Variability
Services are said to be more variable than goods because service experiences vary across
customers or even within a customer across time. The heterogeneity across experiences is due in
large part to the “people” component of services. Variability can be good or bad. Bad variability
involves errors in the system, logistics, and human resources. Marketers try their best to reduce
them. In contrast, good variability involves the customization and tailoring of the service
delivery for the customer’s unique needs and, this often enhances customer satisfaction.
Every business has a core element and value-added services. Distinguishing between these help
the firm identify its competition.
The figure shows a hotel for which the provision of sleeping quarters, cleanliness, and safety are
considered to be the core purchase. The value-added supplemental services are those on which
the hotel might distinguish itself from other hotels—they might claim their check-in processes
are quicker and smoother, their beds are fluffier, they offer designer spa potions, and so forth.
The core elements are expected. So if they are good, a company doesn’t earn points in the eyes
of the customer. But if the core elements are bad, they definitely trigger dissatisfaction. In
contrast, a marketer can affect a customer’s level of satisfaction (or dissatisfaction) through good
(or bad) value-addeds.
TEACHING NOTE: Students can be asked to select a company of their choice and identify
its core and value-added offerings.
Dynamic Strategies
Core businesses change as industries change or as a firm’s competencies change. The text sites
Victoria’s Secret as an example. This mega-brand used to be driven 70% by apparel, but it is
now 70% beauty and fragrance lines.
3
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
TEACHING NOTE: Nintendo, Tiffany’s, Xerox, LG, and Gap, Inc., all started with a
product offering which transformed into something completely different. Students can be
asked to find out what the original product offering of these companies was. They can also
be asked to identify other such companies that have expanded their initial core businesses
and discuss it in class.
This figure shows how broadly competition can be defined in the minds of customers. It is
important to brand managers not to focus on defining competition too narrowly. Fandango is not
just fighting imdb.com, but anything that provides information about the entertainment industry.
Similarly, H&R Block’s competitors could be other accountants or tax solutions including
software.
The figure shows the product breadth and depth for three companies. Alpha Company produces
two key product lines: health care personal goods and beauty personal goods. They have some
depth in the latter. Beta offers a slightly broader product line, but less depth. Gamma company
may appear to produce three product lines, but they may all be characterized as organic, lines
offered at a “health food” store.
While, a brand manager’s responsibilities are to focus, supervising product line managers must
oversee these entire portfolios. Product lines can be pruned or supplemented.
The left two scenarios depicted in the figure shows a company serving its particular customer
base very well, by offering one or more products that suit their tastes. The company at the right is
trying to offer different products to different customers. This strategy is rather inefficient because
it does not leverage the company’s knowledge of its customers or its products. So, extensions
into breadth or depth business ventures should always be done for smart, strategic reasons.
4. Managerial Recap
Products are goods and services. They are the central offering in the marketing exchange
between a customer and a company.
▪ Goods and services and their marketing and management share many similarities, but
there are differences too. Services are relatively more intangible, inseparable and
perishable, and variable.
4
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
▪ A firm’s market offering is comprised of the “core” (the central element of what is
purchased), and the “value-addeds. The core helps define the company to its target
segments, and the value-addeds enhance their customer satisfaction.
▪ Competition should be considered broadly, and a company’s competitors can evolve over
time.
Begin to answer these questions about the product you wish to market. Chapters 7 and 8 will
continue to build on these responses.
Product: fill in descriptions here:
Students should examine the market and look at what is currently available. For energy drinks
they will find two distinct markets. First, are energy “shots” a concentrated form, often with a
double dosage of caffeine and typically in a one to one and half ounce size small plastic bottle.
Energy drinks are found in sizes typically ranging in size from approximately 8 ounces to 16
ounces. These products come in both regular and sugar-free formulations and can come in a
variety of flavors. Students should also examine pricing as a potential indicator of quality.
Encourage students to reflect (introspect) on what makes a “good” product. Encourage them to
think about what is missing, from existing products, what they would like to have in a product,
but currently can’t obtain.
Because most students will be unfamiliar with conjoint, have students conduct a simple informal
research study by having them go out an ask fellow (non-class) students about current usage
behavior. Have them ask questions similar to the above to get a feel for the users of the product
category. Alternatively, you could have students as a class exercise “brain storm” to create a list
of possible attributes/features and then have them approach other students to discuss the
5
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
attributes on the list in order to gauge importance or interest. Students may find it difficult to
gain meaningful insight as those being questioned may not be able to adequately articulate why
they like a given product or what it is about the product that they like other than in the case of
energy drinks – taste and increased energy.
What are our brand associations, and what do we want to trade in/out: Product3
It would appear that possible brand associations the product marketers would want would
include: strength vs. femininity (which do NOT have to be mutually exclusive), active vs. passive,
endurance vs. quickness among others. The product wants to distinguish itself from the more
masculine products on the market, yet should appeal to “strong, independent, successful
women.” Another key trade-off is between the speed at which the energy boost will kick in versus
the duration of the effect. For other product categories, students need to think in terms of
competitive advantage: is the product cheaper, better, or different. How do those strategies
translate in to brand meaning and associations among customers. Again, encourage students to
ask others what they think. A simple and effective procedure is to create a semantic differential
and have students ask others what words they think most relate to the product or product
category. Alternatively, a simple word association test may also be beneficial.
Depending on approach either a) new product concept (yet to be tested and launched) or if
existing most likely in the late growth stage as the energy drink market still has double digit
annual growth. For other product categories, have students conduct secondary research to
determine if they can find such things are number of years on the market, annual sales volume
(both unit and dollar) for the past several years. These could provide rough approximations of
where the product is in the product lifecycle.
1. When you get your hair cut, what’s the “core” of what you buy vs. what are the “value-
addeds” in the purchase? What’s a consultant’s core vs. value-addeds? What is the core
vs. value-addeds for music?
Answer:
Core is the hair cut (and probably the price); value-added is the niceness of the stylist,
receptionist, ease of getting an appointment, etc. Consultant’s core is advice; music is the
tune and entertainment.
BUSPROG: Analytic
Tier II: DISC: Product
Tier III: MBA: Knowledge of general business functions
Bloom’s: Application
Topic: What is the Firm’s Core Marketing Offering?
Difficulty: Moderate
6
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
2. Consider one of these purchases: health care, a car, a time-share condo. What elements
are tangible vs. intangible? How do the tangible vs. intangible components contribute to
your satisfaction or dissatisfaction with the consumption?
Answer:
For the time-share, the 1 or 2 weeks a year that you’re in the condo, it’s very tangible.
The intangibles are the flexibility of access, the security of knowing you have a get-away
place, the fantasy of escaping, etc. Often the intangibles dominate the tangibles in
judgments of satisfaction.
BUSPROG: Analytic
Tier II: DISC: Product
Tier III: MBA: Generative thinking
Bloom’s: Application
Topic: How are Goods Different from Services?
Difficulty: Moderate
3. There are companies that have traditionally been known for their excellence in tangibles,
e.g., Xerox in copiers, IBM in computers, who now describe themselves as primarily
service companies. Do you agree? What does it take for a company to declare itself as a
service organization (e.g., a percentage of business, a certain strategy or mission)? What
would it take for you to believe such a claim?
Answer:
It’s not opinion so much as an understanding of what proportion of profits come from
tangibles / machines vs. intangibles / services.
BUSPROG: Reflective Thinking
Tier II: DISC: Product
Tier III: MBA: Generative thinking
Bloom’s: Analysis
Topic: How are Goods Different from Services?
Difficulty: Moderate
1. The survey certainly captures a lot of “front-line customer service” dimensions. Would be
good to add financial performance measures or other indicators of the core of the financial
advice given.
BUSPROG: Analytic
Tier II: DISC: Research
Tier III: MBA: Strategic & systems skills
Bloom’s: Application
Topic: What is the Firm’s Core Marketing Offering?
Difficulty: Moderate
2. Featuring the faces of clients and of the providers, lending a sense of trust, for example,
would be how customers could be confident in Volta’s quality.
BUSPROG: Analytic
Tier II: DISC: Strategy
7
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
3. Probably the financial investments are core, and all other things are more like value-added.
However, most advisors (competitors too) are probably giving the same kind of advice, so
any value-added that Volta can brag about would be a beginning of a distinction (we’re
trustworthy, we have 125 years in the business, you’ll get a prompt appointment, etc.).
BUSPROG: Analytic
Tier II: DISC: Strategy
Tier III: MBA: Strategic & systems skills
Bloom’s: Application
Topic: What is the Firm’s Core Marketing Offering?
Difficulty: Moderate
A classic Sloan Management Review article by Schlesinger and Heskett, titled, “Breaking the
Cycle of Failure in Services” teaches us that customer satisfaction depends on a number of
things, including employee satisfaction! They basically say, if you were smart to be selective in
hiring, and you try to enrich your employees by training them well, and keep them happy by
paying them well and giving them other perks, they’ll stay with your firm. Their staying is
important because they know the company and the brand, and whenever customers have
questions, the employees can answer them fully. Similarly, if the customer has a problem, the
employees are better able to help the customer and fix the problem. The customer service is
good, and the customers go away happy, which also makes the employees happy, etc.
In contrast, imagine a “cycle of failure”… if you hire people without much screening, train and
pay them minimally, they’re not likely to give a hoot about your brand or customers. The
customers will pick up on this attitude. The employees are also going to be less likely to be
motivated to “go above and beyond the call” to make the customers happy, and indeed, the
customers are likely to leave being dissatisfied, or at least unimpressed.
Here’s the tricky part. What if you are in such a “cycle of failure”? How do you break it?
Imagine you are the CMO for a chain of department stores whose reputation for service is, well,
shy of Nordstrom’s. How do you intervene? Do you start paying your people more, hoping to
make them happy? (But they were hired haphazardly and may not be “worth” it.) Do you fire
your current employees in order to start over? (Can you spell “lawsuit”?) Here is a simple
version of the cycle. Where would you break in to fix it?
8
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
If a company is not doing well, it is very difficult indeed to break a cycle of failure. Usually it has
to happen as a “pet project,” something small in scale, that, if successful, is broadened out
through the company. So, for example, you probably don’t want to just start paying your so-so
employees more, but you could create a job line, “CSR-Mgr” or something, for which you hire
far more selectively, pay much better, and accordingly set much higher standards.
As current employees take notice, they may show interest in getting involved, and if they
can adapt their behavior, they could go through the new training and get a pay bump (probably
a “slight bump” until some probationary period ends). Those who can see that more, or better
work is expected of them and who do not wish to participate will slowly leave on their own.
The cycle can be reversed, and done so humanely. But it does take time.
© Cengage Learning 2013
Kodak’s Graphic Communications Group (GCG) “is a unit of Eastman Kodak Company, the
world’s foremost imaging innovator. The Graphic Communications Group provides commercial
printers, packaging printers, publishers, data printers, and enterprises with one of the broadest
portfolios of technologies, products, and services in the graphic communications and document
capture industries.”1 GCG divides the array of goods and services that it markets into four major
categories: products, application solutions, consulting, and services.
GCG’s various product groups include printers and printing presses, flexographic equipment,
printing workflow software, computer-to-plate printing equipment, printing plates and
consumables, enterprise marketing software, color and screening products, proofing equipment,
security and authentication tools, and image capture devices.2 Although the product groups are
9
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
Kodak’s computer-to-plate (CTP) devices, which use thermal imaging, are designed to meet
commercial, newspaper, and packaging printers’ needs for making printing plates.3 Kodak’s
Design2Launch Solutions ⎯ an enterprise marketing product ⎯ “deliver powerful efficiencies
that organize [a customer’s] assets across brands, departments and suppliers, [thereby] creating a
single streamlined, centralized marketing enterprise. [This] improves speed, visibility and
collaboration, which are critical to ever-changing global business requirements.”4 The image
capture product group offers a wide range of professional color and copydot scanners as well a
broad portfolio of document scanners, including a multipurpose network scanner.5
GCG’s application solutions include five groups of market offerings ⎯ commercial printing,
packaging, publishing, data driven communications, and enterprise solutions ⎯ for a wide range
of customers.6 Some perspective regarding GCG’s application solutions can be gained by
looking in more detail at commercial printing, publishing, and enterprise solutions.
Commercial printing solutions involve advertising and brochure printing, catalog printing, direct
mail printing, and integrated marketing communications.7 Direct mail printing and integrated
marketing communication illustrate this product group. “Direct mail has a life cycle with many
touch points that demand targeting and personalization to communicate effectively and provide
return on investment. [The] Kodak [direct mail solution] works with content creation,
workflow and delivery options to create the best solution for each customer.”8 With the
integrated marketing communications solution, GCG assists its customers in unifying and
streamlining their production processes across organizational units and marketing media.9
GCG’s publishing solutions include newspaper printing, magazine publishing, book publishing,
and directory printing. 10 The book printing solution, for example, supports customers using
mixed environments of offset printing and digital printing technologies to meet a variety of run
lengths and to help reduce waste as well to increase quality and productivity.11 Enterprise
solutions include: archive scanning for art galleries, museums, scientists, and others; document
imaging; brand protection against counterfeiting; and marketing workflow from initial concept to
final production of the printed matter.12
The final component of GCG’s product line provides service and support to keep customers’
equipment and systems in good repair and operating effectively and efficiently.16
10
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
With this impressive array of goods and services, how does Kodak’s Graphic Communications
Group keep abreast of customers’ needs and concerns? Kodak’s GCG regularly receives
extensive market feedback through the Graphic Users Association (GUA) of Kodak Solutions.
The annual GUA conference “provides an invaluable opportunity to receive data and comments
directly from users,” according to Kodak executives.17 GUA members point out the value of
“unfiltered access to executives and product specialists from Kodak[,]” noting that the Kodak
team “genuinely listens to our feedback and takes it into consideration when developing new
products and features.”18
1. What are the main products offered by Kodak to its customers, and how would you
position these products on the goods-to-services continuum of products?
Answer:
Four main products are offered by the Kodak Graphics Communications Group to its
customers. These products are digital printing, consumables, workflow, and services.
Digital printing focuses on equipment for quick, on-demand printing. Consumables
include goods such as paper, ink, and other supplies that are used in printing processes.
Workflow provides systems for tracking jobs and systems for operating printing shops.
Services cover support activities for the operation of printing shops and maintenance of
equipment. With respect to placement on the goods-to-services continuum of products,
digital printing and consumables would be placed on the goods end of the continuum,
workflow would be placed in the middle of the continuum, and services would be placed
toward the services end of the continuum.
BUSPROG: Analytic
Tier II: DISC: Product
Tier III: MBA: Knowledge of general business functions
Bloom’s: Analysis
Topic: How are Goods Different from Services?
Difficulty: Moderate
2. Describe the core elements and the value-added elements of Kodak’s product line(s).
Answer:
The core elements of a product are the generic components of the product that are
identical across all competitors’ products. The value-added elements of a product reflect
the services that are added to the core elements to distinguish the product from
competitors’ products.
Although this question cannot be answered in precise detail given the available
information in the video, it can be approached in a general way. Linking back to the
response to question 1, it might be argued that the ratio of core elements to value-added
elements would be greater with the digital printing and consumables product categories.
On the other hand, the core elements would decrease and the value-added elements would
increase ⎯ perhaps significantly in both cases ⎯ for the workflow and services product
categories.
BUSPROG: Analytic
Tier II: DISC: Product
Tier III: MBA: Strategic and systems skills
Bloom’s: Analysis
11
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
SOURCE: This case was written for this textbook by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair
of Christian Business Ethics and Professor of Management, College of Business Administration, Valparaiso
University. © 2013 Cengage Learning.
Concepts Illustrated:
• Products
• Goods
• Services
• Goods-to-services continuum
• Core elements
• Value-added elements
• Breadth of product line
• Depth of product line
1
Anonymous, “About Us,” Kodak Graphic Communications website,
http://graphics.kodak.com/US/en/About_GCG/default.htm (accessed June 29, 2011).
2
Anonymous, “Products,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Product/default.htm (accessed June 29, 2011).
12
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
3
Anonymous, “Computer-to-Plate (CTP),” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Product/computer_to_plate/default.htm (accessed June 29, 2011).
4
Anonymous, “Enterprise Marketing,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Product/Enterprise_Marketing/default.htm (accessed June 29, 2011).
5
Anonymous, “Image Capture,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Product/Image_Capture/default.htm (accessed June 29, 2011).
6
Anonymous, “Applications Solutions,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Application_Solutions/default.htm (accessed June 29, 2011).
7
Anonymous, “Commercial Printing,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Application_Solutions/Commercial_Printing/default.htm (accessed June 29, 2011).
8
Anonymous, “Direct Mail,” Kodak Graphic Communications Group website,
Printing,”http://graphics.kodak.com/US/en/Application_Solutions/Commercial_Printing/Direct_Mail_Printing/defau
lt.htm (accessed June 29, 2011).
9
Anonymous, “Integrated Marketing Communications,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Application_Solutions/Commercial_Printing/Integrated_Marketing_Communicati
ons/default.htm (accessed June 29, 2011).
10
Anonymous, “Commercial Printing,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Application_Solutions/Commercial_Printing/default.htm (accessed June 29, 2011).
11
Anonymous, “Book Printing,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Application_Solutions/Publishing/Book_Printing/default.htm (accessed June 29,
2011).
12
Anonymous, “Enterprise,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Application_Solutions/Enterprise/default.htm (accessed June 29, 2011).
13
Anonymous, “Consulting,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Consulting/default.htm (accessed June 29, 2011).
14
E. Cagle, “Business Builders,” Printing Impressions 49(10) (March 2007): 40-42.
15
E. Cagle, “Business Builders,” Printing Impressions 49(10) (March 2007): 40-42.
16
Anonymous, “Service,” Kodak Graphic Communications Group website,
http://graphics.kodak.com/US/en/Services/default.htm (accessed June 29, 2011).
17
Anonymous, “Kodak Users Get the Real Deal,” Printing Impressions 51(1) (June 2008): 52.
18
Anonymous, “Kodak Users Get the Real Deal,” Printing Impressions 51(1) (June 2008): 52.
13
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.