Download Marketing Different Classes of Consumer Goods and Services

*
Chapter
Fourteen
*
Developing
and Pricing
Goods and
Services
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
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DEVELOPING VALUE
Product
Development and
the Total Product
Offer
LG1
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• According to the American Marketing
Association, value is a foundation of marketing.
• Value -- Good quality at a fair price.
• Adapting products to new markets is an ongoing
challenge.
• Product development is a key activity in any
modern business.
14-2
DEVELOPING a
TOTAL PRODUCT
*Developing a
Total Product
Offer
LG1
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• Total Product Offer -- Everything consumers
evaluate when deciding whether to buy something.
• Products are evaluated on
many different dimensions,
both tangible and intangible.
• Marketers must think like and
talk to consumers to find out
what’s important.
14-3
UNDERSTANDING
PRODUCT LINES
*Product Lines
& Product Mix
LG1
*
• Product Line -- A group of products that are
physically similar or intended for a similar market.
• Product lines often include competing brands like:
- M&Ms
- Peanut M&Ms
- Mint M&Ms
- Dark Chocolate M&Ms
14-4
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CLASSIFYING CONSUMER
GOODS and SERVICES
Marketing Different
Classes of
Consumer Goods
and Services
LG2
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• Convenience Goods and Services -- Products
consumers purchase frequently with minimal effort.
These include:
- Candy and snacks
- Gas
- Milk and eggs
14-5
*
CLASSIFYING SHOPPING
GOODS and SERVICES
Marketing Different
Classes of
Consumer Goods
and Services
LG2
*
• Shopping Goods and Services -- Products
consumers buy only after comparing value, quality,
price, and styles. These include:
- Clothes and shoes
- Appliances and furniture
- Childcare
- Home remodeling
14-6
*
CLASSIFYING SPECIALTY
GOODS and SERVICES
Marketing Different
Classes of
Consumer Goods
and Services
LG2
*
• Specialty Goods and Services -- Products with
unique characteristics and brand identity. These
include:
- Tiffany jewelry
- Rolex watches
- Lamborghini automobiles
- Ritz Carlton Hotels
14-7
*
CLASSIFYING UNSOUGHT
GOODS and SERVICES
Marketing Different
Classes of
Consumer Goods
and Services
LG2
*
• Unsought Goods and Services -- Products
consumers aren’t aware of or haven’t thought of
buying until they need them. These include:
- Car-towing services
- Funeral services
- Renter’s insurance
14-8
SOME KEY FUNCTIONS of
PACKAGING
*Packaging
Changes the
Product
LG3
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• To attract buyers’ attention
• Protect the goods inside and be tamperproof
• Describe and provide information about the
product
• Explain the product’s benefits
• Provide warranty information and warnings
• Give an indication of price, value, and uses
14-9
UNDERSTANDING BRANDING
*Branding and
Brand Equity
LG4
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• Brand -- Name, symbol, or design that identifies the
goods or services and distinguishes them from
competitors’ offerings.
• Trademark -- A brand that
has exclusive legal protection
for both its brand name and
design.
14-10
ESTABLISHING BRAND EQUITY
and LOYALTY
*Generating
Brand Equity
and Loyalty
LG4
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• Brand Equity – The combination of factors
(awareness, loyalty, perceived quality, images, and
emotions) that people associate with a brand name.
• Brand Loyalty -- The degree to which consumers
are satisfied and are committed to further purchases.
14-11
The NEW PRODUCT
DEVELOPMENT PROCESS
*
The New
Product
Development
Process
LG5
*
14-12
SALES and PROFITS DURING
the PRODUCT LIFE CYCLE
*The Product
Life Cycle
LG6
*
14-13
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PRICING OBJECTIVES
Competitive
Pricing
LG7
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• Achieving a target return on investment or profit
• Building traffic
• Achieving greater market share
• Creating an image
• Furthering social objectives both short-run and
long-run
14-14
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PRICING ALTERNATIVES
Other Pricing
Strategies
LG7
*
• Skimming Price Strategy -- Pricing new products
high to recover costs and make high profits while
competition is limited.
• Penetration Price Strategy -- Pricing products low
with the hope of attracting more buyers and
discouraging other companies from competing in the
market.
• Everyday Low Pricing (EDLP) -- Setting prices
lower than competitors with no special sales.
14-15