CH8

What is Product?

Product is anything that satisfy a need or want of the customer.

What is Service?

Service is any activity or benefits which is essentially intangible, inseparable, variable and perishable that
might satisfy a need or want of the customer.

Levels of Product?

There are 3 levels of product

1. Core Custom value

2. Actual Product
3. Augmented Product

Types of Products:

1. Consumer Product (Consumer products are the product and services for personal consumption)

Consumer Product are 4 types

a) Convenience Product (for customer use buys frequently, immediately)

involvement low, purchase frequently.
b) Shopping Product (consumer product that the customer compares carefully
on suitability, quality, price and style) purchase infrequently, involvement
high,
c) Specialty Product (with unique characteristics or brand) consist special
features, high brand product, price sensitivity low, customer gives special
time and effort
d) Unsought Product (products that consumer don’t plane to buy until it
becomes necessary)
2. Industry Product (product for further processing or for use in conducting a business)
Product Line:

Is a group of products that are closely related because they function in a similar manner and sold to the
same customer group.

Product linelength:

Number of items in the product line.

1. Line stretching
2. Line filling

Product Mix:

Consists of all the product and items that a particular seller offers for sale.

1. Width (different line of product)

2. Length (items in the product line)
3. Depth (How many product in the linelength)
4. Consistency (How much those product are closely similler to each other)

Service marketing:

Service marketing is different because it has some unique characters.

1. Intangible
2. Inseparable
3. Variability
4. Perishability
Brand

Is a name, term, sign and symbol that distinguishes a product from its competitors and helps to identify the
origin of the product.

2 benefits:

1. Distinguishes a product from its compotators

2. Helps to identify the origin of the product

Brand name desirable qualities

1. Suggest benefits and qualities

2. Easy to pronounce, recognize and remember
3. Distinctive
4. Extendable
5. Translatable for the global economy
6. Capable of registration and legal protection

Brand development strategies

***Why marketing for service is harder than marketing for goods?

CH9

New product develop process

Idea Generation:

Is the systematic search for new product ideas

Sources of New product ideas

1. Internal (company own formal research and development and intrapreneurial

programs)
2. External (sources outside of the company such as customer, competitors and outside
design firms)

Idea Screening:

Identify good ideas and drop poor ideas

There is a framework for this and it is RWW

 Is it real?
 Can we win?
 Is it worth doing?

Concept development and testing

Concept testing refers to testing new product concepts with groups of target consumers.

Product idea is an idea for a possible product that the company can see itself offering to the market.

Product concept is a detailed version of the idea stated in meaningful consumer terms.

Product image is the way consumer perceive an actual or potential product.

Marketing strategy development

Marketing strategy development refers to the initial marketing strategy for introducing the product
to the market.

Marketing strategy statement includes

 Description of the target market

  Value proposition
 Sales and profit goals

Business analysis

Business analysis involves a review of the sales, costs, and profit projections to find out whether they
satisfy the company’s objectives.

Product Life cycle strategies

5 types of customers who buy new product.

1. Innovators (risky, adventures)

2. Early Adapters (Little less risker from the innovators and also adventures)
3. Early Majority (Take recommendations from the early adapters)
4. Late Majority (Takes full review and than buy the product)
5. Laggers (when the price of the product is low and at the end of the stage they buy the product.)
trend doesn’t matter and price sensitive. Only functionality

There are few characters to identify a product

 1. Cost
2. Profit
3. Sales
4. Customer
5. Number of Competitors

Product development

Sales are zero and investment cost mount

Introduction

 Cost is high
 The profit will be at negative
 Sales very low. Rise really slowly and many people aren’t aware of it.
 Customer only the innovators and the early adapters
 Not to many compactors

Growth

 Cost – Lower
 Profit – increases
 Sales – high and grows very Fastly
 Customer – Early adaptors and early majority
 Number of compactors – will increase

Maturity

 Cost – Minimum because of high quantity or production

 Profit – very high at it’s maximum
 Sales – Max level
 Customer – Early majority and late majority
 Number of competitors – High but will decrease because of decline stage

Decline

 Cost – lowest amount of cost per unit because they reduce all the other cost in the company like
promotion etc.
 Profit – reduce
 Sales – very low
 Customer – Leggers (Also called the saviors of company at the decline stage)
 Number of competitors – Will fall very faster

Special product life cycle strategy

Style

Style is move enduring and personal concept. It is a distingtible and identifiable visual languagable
or a character manner of expression

Fashion

It is a brand societal phenome that indicates a propeller style last relatively long period of time.

Fed

Fed is a short lived trend that gains popularity shortly quickly and then disappears quickly as well.

Ch 10
Price

There are 4 objectives of setting price

1. Maintaining the current status (marketing status, competitors)

2. Maximizing the market share (
3. Ensuring product quality leadership
4. Current profit maximization

3 General pricing strategy

1. Cost based pricing (Mark up Price) (low price)

2. Value based pricing (Generally high price)
3. Computation based pricing

`
Ch 11

Adoption

What is Adoption?

Adoption is a mental process that passes from first hearing about an innovation to it’s final adoption

There are 5 stages of adoption

1. Awareness
2. Interest
3. Evaluation (Search in interest)
4. Trial
5. Adoption

New product pricing strategies

There are 2 ways

1. Market skimming pricing (Aren’t aware of the product so set a high price)

Condition:

o Product quality and image must support the price

o Buyers must want the product at the price ( so set it a reasonable price)
o Cost of producing the product in small volume should not cancel the
advantage of higher price
o Competitors should not be able to enter the market easily
2. Market penetration pricing
Set a low initial price in order to penetrate the market quickly and deeply to attract a large number
of buyers quickly to gain market share
Condition:
 Price sensitive market
 Inverse relationship of production and distribution cost to sales growth
 Low price must keep competition out of the market

Product mix pricing strategies

Product line pricing

Takes into account the cost differences between products and setting their price accordingly.

Optional Product pricing

Product that you can use with the main product.

If the main product demand is high

The optional product price is high too.

Captive-product pricing

Necessary things with the main product.

Ex: printer are cheap, but ink cartridges are expensive.

By-product pricing

Product which are left over of the main finished product.

Product bundle pricing

Combine several products at a reduced price.

Price adjustment strategy:

1. Discount and allowance

Reduce the price to reward customer and make them pay early

 Discount
 Allowance
2. Segmented pricing

Selling same product to at different prices to different customer segment (Not based on cost)
 3. Psychological pricing

The price that customer carry in their mind like 9.99 rather then 10 to make is look cheaper.

4. Promotional pricing

Lower the price temporarily.

5. Geographical pricing

Adjusting price depending on the location of the customer

FOB – Free on Board (International) seller to buyer and seller will bear all the cost
Uniformed delivery pricing – Prices will be same everywhere

Zone pricing

Basing point pricing

Price change:

1. Price cut:

Excess capacity – Demand < supply

So lower the price to increase the market share.

2. Price increase:
 Cost inflation – money value decreases
 Increase demand (Inflation) demand pull inflation
 Lack of supply – Supply is short (Shortage)
CH 5

Characteristics of a product that affects its rate of adoption

1. Relative advantage (new product better than the existing one)

2. Complexity (not knowing the product and hard or easy to use)
3. Compatibility (does it fit with people habit and values)
4. Divisibility (can people try it before full use)
5. Communicability (How much you can express or show your product)

Customer buying process

1. Need recognition (realizing they have need)

2 sources to know about it

 Internal stimuli (knowing it by your own)

 External stimuli ?
2. Information search

Customer looking for information for the need or a solution for the problem

There are 2 sourcing

 Personal sourcing (family, friends, neighbors)

 Non personal sourcing (commercial, advertisement)
3. Evaluation of alternatives (compare different product)

The thing customer search for criteria

 Budget (can they afford it?)

 Security (is it safe to use?)
 Reliability (will it work properly overtime without breaking down)
 Status (is it sutable for the customer)?
 Operating cost (is there are any addition or hidden cost to use it?)
4. Purchase decision

The customer makes the final choice to buy the product (when, how, where)

5. Post-purchase Behavior

After buying the product the customer evaluates satisfaction or dissatisfaction

Type of customer buying behavior: