Chapter 6 - Product Marketing Principles of Marketing PDF

Principles of Marketing Chapter 6 – Creating Offerings Unless otherwise noted, this work is licensed under a Creative Commons Attribution- NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license. Feel free to use, modify, reuse or redistribute any portion of this pres...

Principles of Marketing Chapter 6 – Creating Offerings Unless otherwise noted, this work is licensed under a Creative Commons Attribution- NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license. Feel free to use, modify, reuse or redistribute any portion of this presentation. 6.1 What Composes an Offering? Learning Objectives: Distinguish between the three major components of an offering— product, price, and service. Explain, from both a product-dominant and a service-dominant approach, the mix of components that compose different types of offerings. Distinguish between technology platforms and product lines. 6.1 What Composes an Offering Continued Product, Price and Service Most offerings consist of a product, or a tangible good people can buy, sell, and own. A service is an action that provides a buyer with an intangible benefit. A haircut is a service Services usually also require the consumer to Service Reception Official - Free image on Pixabay be physically present or involved. Augmented and Core Product The physical product, is the core product. Surrounding it are services and accessories, called the augmented product, that support the core product. Together, these make up the complete product. Campbell's Product Mix Key Takeaway A product line is a group of similar offerings. A product line can be deep (many offerings of a similar type) and/or broad (offerings that are very different from one another and cover a wide range of customers’ needs). The entire assortment of products that a company offers is called the product mix. The Product Dominant Approach From the traditional product-dominant perspective of business, marketers consider products, services, and prices as three separate and distinguishable characteristics. Product Oriented firms The Service Dominant Approach The service-dominant approach is that it integrates the product, price, and service dimensions of an offering. This integration helps marketers think more like their customers, which can help them add value to their firm’s products. This perspective helps marketers think more like their customers, which helps firms add value to their offerings. Shopping Online Sale - Free vector graphic on Pixabay  Product Levels & Product Lines Most firms sell several offerings designed to work together to satisfy a broad range of customers’ needs and desires. A product line is group of related offerings. Product lines are created to make marketing strategies more efficient. A product line can be broad. Or, a product line can be narrow. Nick Youngson CC BY-SA 3.0 Pix4free Product Levels There are Four offering levels. Consider the iPod Shuffle. (Fig 6.9) 1. the basic offering (the device itself) 2. the offering’s technology platform 3. the product line to which the Shuffle belongs (Apple’s iPod line of MP3 music players) 4. the product category to which the offering belongs. 6.2 Consumer Offerings Convenience Offerings Shopping Offerings Specialty Offerings Unsought Offerings Convenience offerings Convenience offerings are products and services consumers generally don’t want to put much effort into shopping for because they see little difference between competing brands. For many consumers, bread is a convenience offering. Jason – Life Savers – CC BY-NC 2.0. Shopping offerings A shopping offering is one for which the consumer will make an effort to compare and select a brand. Consumers believe there are differences between similar shopping offerings and want to find the right one or the best price. Buyers might visit multiple retail locations or spend a considerable amount of time visiting Web sites and reading reviews about the product, such as the reviews found in Consumer Reports. Ben Lucier – Crest Toothpaste – CC BY 2.0. Specialty offerings Specialty offerings are highly differentiated offerings, and the brands under which they are marketed are very different across companies, too. For example, an Orange County Chopper or Iron Horse motorcycle is likely to be far different feature-wise than a Kawasaki or Suzuki motorcycle. Wikimedia Commons – CC BY 2.0. Unsought Offerings Unsought offerings are those that buyers do not generally want to have to shop for until they need them. Towing services and funeral services are generally considered unsought offerings. Wikimedia Commons – Ruben de Rijcke CC BY-SA 3.0. 6.3 Business-to-Business (B2B) Offerings Capital Equipment Raw Materials Original Equipment Manufacturer (OEM) offerings Maintenance, Repair, and Operations (MRO) offerings Facilitating offerings 6.3 Capital Equipment Any equipment purchased and used for more than one year and depreciated over its useful life. Machinery used in a manufacturing facility, for example, would be considered capital equipment. Professionals who market capital equipment often have to direct their communications to many people within the firms to which they are selling because the buying decisions related to the products can be rather complex and involve many departments. From a marketing standpoint, deciding who should get what messages and how to influence the sale can be very challenging. 6.3 Raw Materials Raw materials offerings are materials firms offer other firms so they can make a product or provide a service. Raw materials offerings are processed only to the point required to economically distribute them. Lumber is generally considered a raw material, as is iron, nickel, copper, and other ores. 6.3 Original Equipment Manufacturer (OEM) Offerings Is a manufacturer or assembler of a final product. An OEM purchases raw materials, manufactured materials, and component parts and puts them together to make a final product. OEM offerings or components, like an on/off switch, are components, or parts, sold by one manufacturer to another that get built into a final product without further modification. 6.3 Maintenance, Repair, and Operations (MRO) Offerings Refer to products and services used to keep a company functioning. Janitorial supplies are MRO offerings as is hardware used to repair any part of a building or equipment. MRO items are often sold by distributors. However, you can buy many of the same products at a retail store. For Source: http://www.tgchemical.com/ example, you can buy nuts and bolts at a hardware store. 6.3 Facilitating Offerings Include products and services that support a company’s operations but are not part of the final product it sells. Marketing research services, banking and transportation services, copiers and computers, and other similar products and services fall into this category. Facilitating offerings might not be central to the buyer’s business, at least not the way component parts and raw materials are. 6.4 Branding, Labeling, and Packaging Branding Brand Name/ Brand Mark Cannibalization Packaging Functions of Packaging Primary/ Secondary/ Tertiary Packaging Branding A brand is a name, picture, design, or symbol, or combination of those items, used by a seller to identify its offerings and to differentiate them from competitors’ offerings. Branding is the set of activities designed to create a brand and position it in the minds of consumers. Photo by David Hurley licensed under the Unsplash License Labelling A brand name, like Apple, is the spoken part of a brand’s identity. A brand mark is the symbol, such as Coke’s wave or Apple Computer’s multicolor apple Photo by Kristian Egelund is licensed under the Unsplash License Cannibalization Cannibalization occurs when a firm’s new offering eats into the sales of one of its older offerings. (Ideally, when you sell a new product, you hope that all of its sales come from your competitors’ buyers or buyers that are new to the market.) A completely new offering will not result in cannibalization, whereas a line extension likely will. Photo by Nimble Made is licensed under the Unsplash License Packaging Sometimes the package itself is part of the brand. For example, the curvaceous shape of Coca-Cola’s Coke bottle is a registered trademark. If you decide to market your beverage in a similar-shaped bottle, Coca- Cola’s attorneys will have grounds to sue you. laxysupper – Coke – CC BY NC-ND 2.0. Primary/ Secondary/ Tertiary Packaging Primary Packaging: holds a single retail unit of a product. For example, a bottle of Coke, a bag of M&Ms, or a ream of printer paper (five hundred sheets) are all examples of primary packages. Secondary Packaging: holds a single wholesale unit of a product. A case of M&M bags is an example, as are cartons of reams of paper. Tertiary Packaging: is packaging designed specifically for shipping and efficiently handling large quantities. 6.5 Managing the Offering Learning Objectives: Understand the people involved in creating and managing offerings. Recognize the differences in organizing product marketing for consumer versus B2B companies. Managing the Offering A Product manager, someone with business responsibility for a particular product or product line. Brand managers decide what products are to be marketed and how. Category managers are found in consumer markets, usually in retail. Market managers can be found in both consumer markets and B2B markets. Vertical market managers are found only in B2B markets