CHAPTER V

SHAPPING
THE MARKET
OFFERINGS
TOPICS TO BE DISCUSSED

01 02
PRODUCT AND DEVELOPING
SERVICES PRODUCT STRATEGY
03
DECIDING ON PRICING
STRATEGIES AND
PROGRAMS
OUTLINE:
WHAT...

01 PRODUCT SERVICES
04
What can you give? What can you do?

SERVICES
02 05
PRODUCT
DIFFERENTIATION DIFFERENTIATION
What makes you special? What makes you different?

03 PRODUCT MIX SERVICE QUALITY 06

What do I want it with? What makes you better?
WHAT CAN YOU GIVE?
Products can be anything offered
to a market. They satisfy wants
and needs.

Can be:
1. Durable/Non-Durable
2. Tangible/Intangible
3. Consumer/Industrial Goods
WHAT CAN YOU GIVE?

Customer Value can be the:

1. Core benefit
2. Basic Product
3. Expected Product
4. Augmented Product
5. Potential Product
What makes you special?
Products can be differentiated by:

1. Form (appearance)
2. Features (additional benefits)
3. Customization (customer requirements)
4. Performance quality (operation function_
5. Conformance quality (production consistency)
6. Durability (operating life)
7. Reliability (chance to malfunction)
8. Repairability (ease of fixing)
9. Style (look and feel)
 WHAT DO I WANT WITH IT?
Product mixes are characterized by:

Width (product lines)

Soap Shampoo Perfumes Ice Cream

Length
(brands)

Depths (variants)
Consistency (relatedness of product)
WHAT CAN YOU DO?

Your service is also your product!

Characteristics:

1. Intangibility - services cannot be seen, tasted, felt, heard, or smelled

before purchase
2. Inseparability - services cannot be separated from their providers
3. Variability - quality of services depends on who provides them and
when, where, and how
4. Perishability/Storability - services cannot be stored for later sale or use
WHAT MAKES YOU DIFFERENT?
Service can be differentiated by:

1. Ordering Ease - how easy it is for the customer to place an order with the
company.
2. Delivery - speed, accuracy, and care throughout the process.
3. Installation - ease of installation is a true selling point for buyers of complex
products like heavy equipment and for technology novices.
4. Customer Training - helps the customer’s employees use the vendor’s equipment
properly and efficiently.
5. Customer Consulting - data, information systems, and advice services the seller
offers to buyers.
6. Maintenance and Repair - help customers keep purchased products in good
working order.
WHAT MAKES YOU BETTER?

Make yourself stand out through:

1. Customer relationship
2. Marketing excellence
3. Differentiation of service
4. Managing customer expectations
5. Quality of service
ICE BREAKER!!
GUESS THE PRICE!
GUESS THE PRICE!

₱ 300
GUESS THE PRICE

₱ 1,200
GUESS THE PRICE

₱ 3,980
GUESS THE PRICE

₱ 280
GUESS THE PRICE

₱ 276
CHAPTER 12

DEVELOPING
STRATEGY
PRODUCT
PRODUCT DESIGN DECISION FOR
COMPETITIVE ADVANTAGE
Product - anything that satisfies a want or need through use,
consumption, or acquisition.

• What is important is how the consumer perceives the products as

satisfying a need, not how the seller sees the product
• The seller must turn the wanted benefits into tangible product
withfeatures and other elemets of the augmented product that will
provide the intended satisfaction better than competitive products.
-Features: Tangible or intangible attributes given the product by its
designer
-Benefits: Solutions to customer problems or needs delivered by the
product
 BRANDING DECISIONS
Branding - identifies and helps • Through its branding efforts, a
differentiate the goods or services of one company improves its brand equity
seller from those of another. position, which consists of four major
- Simplifies shopping asset categories.
- Facilitates the processing of
informationconcerned with purchase - Brand name awareness
options - Brand loyalty
- Provides confidence that the consumer - Perceived quality
has made the right decision - Brand association
- Helps to ensure quality
- Satisfies certain status needs
 BRANDING STRATEGIES
• Individual branding - requires the • Cobranding - use multiple brand
company to provide each product names with single product or
or product line with a distinctive service offering
name. • Global branding
• Family branding - uses the same • Corporate identity and family
brand name to cover a group of branding as a source of synergy
products or prodict lines. • Retailer and distributor brands
• Brand extension - incolves the use
of a family brand name established
in one product class as a vehicle to
enter another product class.

PACKAGING
DECISIONS
Packaging - the process of
designing a package for the
consumer product.
• Functions of a product’s
package:
- Protecting the product
- Facilitating use of the
product
- Promoting the product
-Providing information
about the product and its use
• Increasingly firms are
recognizing the need to use
environmentally sensitive
packages
PACKAGING AS A MARKETING TOOL
• Self service - an increasing number of products are being sold without any
personal interaction, on a self service basis.
• Consumer affluence - rising consumer affluence means consumer are willing
to pay a little more for convenience, appearance, dependabillity, and prestige
of better packages.
• Company and brand image - packages contribute to instant recognition of
the company or brand.
• Innovation opportunity - innovative packaging can bring large benefits to
consumers and profits to producers.
DETERMINANTS OF SERVICE QUALITY

Services - act of performance, intagible, does not result in ownership.

• Reliability - the ability to perform the promised service dependably
and accurately.
• Responsiveness - th ewillingness to help customers and to provide
prompt service.
• Assurance - the knowledge and courtesy of employee and teir
ability to convey trust and confidence.
• Empathy - the provision of caring, individualized attention to
customers.
• Tangibles - the appearance of physical facilities, equipment,
personnel, and communication materials.
NEW PRODUCT
• New to the world products - products that create an
entirely new market. The product has the greatest cost
and risk of all product types.
• Incremental innovation entering new markets by
tweaking products for new customers using variations on
a core product to stay one step ahead of the market, and
creating interim solutions for industry wide problems.
PROCESS OF NEW DEVELOPMENT
 Idea screening
 Concept testing
 Product development
 Test market
 Business analysis
 Launching & commercialization
REASONS FOR THE FAILURE OF NEW
PRODUCTS
1. shortage of important ideas in certain areas
2. fragmented markets
3. social, economic, and governmental constraints
4. high cost of development
5. capital shortages
6. shorter required development time
7. poor launch timing, shorter product life cycles
8. organizational support