Chapter 8: Developing and Managing Products and Services

I. What is a Product?
Goods, Services, Experiences, Organizations, Persons, Places, Ideas, and combinations of any of these

(Your text uses "product" in many places where I believe it should say "good", since "product" contains both goods and services, but I use their terminology in order not to confuse you as you work through this webpage along with your text).

A product is anything that might satisfy a want or need, whether it is a:  

Good

Service

Event

Person

Place

Business or Organization

Socially Responsible Act

Experience

Combination

Todd writes: A word of advice to everyone: I just returned from an establishment called “Casino Niagara”. The product offering isn’t very strong. I sat at a table and gave the nice man in a tuxedo money. He then gave me a bunch of coloured tokens; he then told me to put them down on the table. He then took those tokens back and told me to go home because I didn’t have any more. I don’t know if this product “gambling” is going to fly. This product may be good, maybe just not this specific business. I plan to try out other product offerings at competitors in a city in the Nevada desert.

Exercise Experience as Product Report on an "Experience" you have purchased. What "extra value" did it offer you beyond just a product?  Post your answer in the Moodle Discussion Group.

The Good/Service Continuum

Exercise - Plan GS Continuum Explain where on this continuum (from left to right) your Marketing Plan product will fit Post your answer in the Moodle Discussion Group.

Levels of Products and Services

Exercise: Plan Levels of Product For your Marketing Plan product, list the Actual Product, the Core Benefit, and at least two parts of the Augmented Product. Post your answer in the Moodle Discussion Group.

Product as the packaging of a solution

Charles Revson   "In the factory we make cosmetics...

...in the drugstore we sell hope."

Theodore Levitt "A purchasing agent buys 1/4 inch holes, not a 1/4 inch drill."

Elmer Wheeler "Sell the Sizzle, not the steak."

Exercise: Plan Packaging a Solution Describe the problem for which your Marketing Plan product will be a solution. Post your answer in the Moodle Discussion Group.

Product and Service Classifications

1. Consumer Products		2. Industrial Products
		Materials and Parts > Raw Materials > Manufactured Materials > Parts Capital Items > Installation > Accessory Equipment Supplies and Services > Operating Supplies > Repair and Maintenance Items

3. Organizations, Places, and Ideas 

One of the most important social uses of marketing is what is called Social Marketing, where we use the techniques and theories of marketing to sell an idea that will be good for society. Click here to read about what  Social Marketing is and is not. We teach a 4000 Honours level course on Social Marketing AK/ADMS4280 3.0.

Industrial Products

The main classification difference between consumer products and industrial ones is the purpose for which they are purchased. If you buy something for your own use, it's a consumer product. If someone buys somoething to resell or to use in building something else, it is an industrial product.

II. New Product Development

New Product Development Strategy

The following story comes from a graduated York student Danny Hadida, who took several marketing courses with me and who now comes back to speak to marketing classes. A few years ago, he introduced a new product to the market. The product failed miserably, but he learned some solid marketing lessons, and he also used the video and presentation he created about the experience to land himself a teaching job in a Toronto High School, after completing his teaching certification.

The Study Buddy Eight Dangers of New Product Introduction   - Danny Hadida

SIGNALS Don't ignore the danger signals hoping they'll go away. During the creation and research of the Study Buddy I received a lot of information that was contradictory to my ideas and plans. I had subscribed to a “never give up” attitude towards the Study Buddy, so instead of changing direction I tried to “keep positive”. For example, when speaking to people who were not interested in purchasing the product, I discarded their comments, thinking, “well they are just not a part of my market”. The lesson I learned here was: read the signals -- separate the product from the person; revise goals and objectives following the uncovering of new relevant information. Entrepreneurs should not confuse changing their goals with quitting.   PROFIT My goals were predominantly financial. I realized that being money-driven was difficult for me, but in business success is usually equated with accumulation of financial wealth. Don't get greedy, however; don't try to do too much all at once.   TARGET + FLUENCY Defining a product’s target market is very difficult. You also cannot assume that a product will move fluently from one market to another. Know your target but also be willing to change if it seems necessary. Although I was sure of my general target market, I didn’t consider the “pop culture” of the 18 – 24 post-secondary markets. I should have also paid closer attention to the geographical influence on each specific target market. These things require a lot of research prior to a product launch.   EGGS Don't put all your eggs in one basket; try not to become obsessed with only your new product. While inventing the Study Buddy I became obsessed. My entire life was dedicated to inventing, gaining the financing required, researching and launching the product. I took an entire summer between second and third year of university to bring this product to the market. This put an enormous amount of stress on me. I had not considered what would happen if it didn’t work. My suggestion to any budding entrepreneur is that they start a business while working full-time and once the business becomes successful enough they leave their full-time position to run the business.    DEADLINES I took an absolutist approach to deadlines. Instead of realizing that the deadlines I had set for myself were unrealistic, I produced a mediocre piece of work. Entrepreneurs must take a flexible approach to deadlines. My problem was that I was running out of funds and that is another reason I rushed.   SHORTAGE You can have a shortage of product if it sells too quickly, and you also can have a shortage of sales when the hoped-for response doesn’t materialize. A marketer should be cognizant of the possibility of failure. However, there is also the argument that if one is attempting to achieve something, they should put everything they have in to it. Entrepreneurial Quote “You will never know how close you were to success if you give up”      RELIANCE Don't rely on just one product and don't forget your "old" products. Marketers should realize that there are many products on the market that can fulfill the same need as your product. Just because a product is new doesn’t mean it is better. Have something to fall back on.

The New-Product Development Process

Exercise - Plan New Product Development Which of these things was most important in your launching of a new product, and why? Post your answer in the Moodle Discussion Group.

 

The Product Life Cycle

Stages in the Product Life Cycle

 

Check out how advertising is used in different stages of the Product Life Cycle, in the Unit on Promotion

Styles, Fashions and Fads

Style	Basic and distinctive mode of expression	Formal Clothing
Fashion	Popular style in a particular field	Business Casual
Fad	Fashion that enters quickly is adopted quickly declines quickly	Pet Rocks

Exercise - Plan Your Plan Product - Style, Fasion, or Fad? Which of these three most closely describes your Marketing Plan product? (Don't say "none" - pick the one that is closest and explain the fit). Post your answer in the Moodle Discussion Group.

 

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III. Product and Service Decisions

Individual Product Decisions
Product Attributes

Branding - So important it has its own chapter

Packaging and Labelling

Packaging is so important to the Marketing process that it is often called the Fifth P

There are main purposes to Packaging

Protection		Example: Protect breakable products, or keep many small parts safely together
Promotion		Example: Cosmetics and perfumes cost very little to make but pretty packaging allows a huge markup and profit
Information		Example: Changing the consumer's perception of your product with anew and different package
Convenience		Example: Hold ready-made dinners
Unitization		Example: Group products according to consumer, retail, and transportation
Handling		Example: Shipping product to retailers

Exercise: Lab Packaging Go to a store where you shop frequently and find one specific  example each of each of the three purposes of packaging. Tell us about them. Post your answer in the Moodle Discussion Group.

Labelling 

Product Support Services

Exercise - Plan Competitive Advantage What are you offering your customers in your Marketing Plan in the way of product support services that gives you a competitive advantage? Post your answer in the Moodle Discussion Group.

Product Line Decisions

Product Line Length	add or subtract items in the present range
Up-Selling	Move customers up to higher models BMW wants customers to move from the 3-series models to the 5 and 7 series
Cross-Selling	Hewlett Packard sells printers as well as cartridges
Down-Selling	add lower quality products that sell for less Daimler-Chrysler stretched Mercedes down with a cheaper version in a slow marker
Filling Within Current Range	Fill in both directions Mariott Hotels added Renaissance (up) and TownePlace Suites (down)

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Product Mix Decisions

Exercise Product Mix What is Marriott Hotels trying to do with this product mix strategy?  Post your answer in the Moodle Discussion Group.

 

Exercise Extensions How might your Marketing Plan use the Product Line Stretch in the future?   Post your answer in the Moodle Discussion Group.

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IV. Services Marketing

Good Service is important in Marketing. Take this company's brag on its truck: In case you can't read it, it says, "Quality Service since 3:00 last Thursday! (picture provided by Milt Chamberlain)

Nature and Characteristics of a Service

Marketing Strategies for Service Firms

For an example of good services marketing, check out Sarah Gilbert's story about Jeans Jeans Jeans and scroll down to "Subterranean Blues"

Three Types of Service Marketing

Internal Marketing	Train and Motivate Customer-Contact Employees
External Marketing	All the rest of Marketing
Interactive Marketing	Quality of the Buyer-Seller Interaction

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Additional Product Considerations

Product Decisions and Social Responsibility

Exercise Social Responsibility Describe one area in which your product might be either socially responsible or potentially harmful to someone. Post your answer in the Moodle Discussion Group.

International Product and Services Marketing

Exercise International What's going to be your worst nightmare if you take your product international?  Post your answer in the Moodle Discussion Group.

Real-Life Case Study - Applying "Sought" and "Unsought" Products to Church Services

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Chapter 9: Branding Strategy and Management

I. What is a Brand?

Brand Meaning
Brand Relationships
People as Brands

II. Brand Characteristics

Logos - It's sometimes necessary to update a brand, but it's often difficult to do so because customers object

Brand Personality - Brands have different personalities just as people do; it's part of why it can be so difficult to change a brand

Brand Equity:

adds value assures quality gets preference ensures original protects features increases markets builds image

Exercise Brand Equity Choose a product you buy either regularly or occasionally and tell us which layer of the pyramid your product purchase fits into Post your answer in the Moodle Discussion Group.

 

III. Branding Strategy and Management

Brand Name Selection	Pick a name that suggests something about the product is easy to pronounce is distinctive is extendable can translate easily is capable of registration and legal protection Exercise - Plan Brand Name For your Marketing Plan product, which of these requirements does your brand name meet? What might you have to change about your chosen brand name in order to meet these requirements? Post your answer in the Moodle Discussion Group.
Brand Positioning	Position Dove Soap on: Product Attributes 1/4 moisturizing lotion Desirable Benefits Softer Skin Beliefs and Values "A healthier more democratic view of beauty"
Brand Sponsorship	National and Private Brands Licensing Co-branding
Brand Development	Line extensions Multi-brands New brands - choose new strategy for new brand Individual Brand Names P&G makes 8 different brands of detergent Blanket Family Name Everything Coca-Cola makes carries its name Separate Family Name At Sears, think:  Kenmore Washers Craftsman Tools Company Trade Name/ Individual Product Name Quaker Oats Cap'n Crunch appeals to both parent & child
Ongoing Brand Management	To keep a brand, you need to police its use Continual Communication to Customer Brand Experience through advertising, work of mouth, personal interaction Employees as customer-centred brand builders Brand equity managers Brand Audits Rebranding when necessary

IV. Brand Communications

Brand Experiences and Touchpoints

Exercise Touchpoints Tell us one of your favourite brands and describe a "touchpoint" you experience with that brand. Post your answer in the Moodle Discussion Group.

 

Brand Icons and Characters - Read carefully the text's description of the M&M characters to understand what we mean when we say a brand has "personality".

Brand Ambassadors - Check out Benetton's ad to see some of the people described in the text

Brand Stories - Branded Content and Entertainment

Brands and Social Media - Brand Advocates

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