Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need, including physical goods, services, experience, events, persons, places, properties, organizations, information, and ideas
Principles of Marketing Lecturer: Nguyen Quynh Mai (Ms.) | MSc School of Economics & International Business Email: mai.nq@ftu.edu.vn Product and types of product 1.1 Product concept: Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need, including physical goods, services, experience, events, persons, places, properties, organizations, information, and ideas Product and types of product 1.2 Levels of product: Product and types of product 1.2 Levels of product: Generic product Core benefit The fundamental need or want that consumers satisfy by consuming the product or service A version of the product containing only those attributes or characteristics absolutely necessary for it to function For example, the need to process digital images could be satisfied by a generic, lowend, personal computer using free image processing software or a processing laboratory For example, the need to process digital images Augmented product Potential product This refers to all additional factors which sets the product apart from that of the competition This is about augmentations and transformations that the product may undergo in the future For example, the computer comes preloaded with a high-end image processing software for no extra cost or at a deeply discounted, incremental cost Expected product The set of attributes or characteristics that buyers normally expect and agree to when they purchase a product For example, the computer is specified to deliver fast image processing and has a highresolution, accurate color screen For example, the customer receives ongoing image processing software upgrades with new and useful features Product and types of product 1.2 Levels of product: Implications: Consumers see products as complex bundles of benefits that satisfy their needs When developing products, marketers first must identify the core customer value, design product and find ways to create customer value and satisfy customer experience Kotler's Five Product Level model provides businesses with a proven method for structuring product portfolio to target various customer segments Ansoff’s product-market expansion grid Ansoff’s product-market expansion grid Price and roles of pricing policy 1.1 Concept of pricing: Price is the amount of money charged for a product or service; the sum of the values that customers exchange for the benefits of having or using the product or service No matter what the state of the economy, companies should sell value, not price Price and roles of pricing policy 1.2 Roles of pricing policy Price is the only element in the marketing mix that produces revenue; all other elements represent costs Pricing plays a key role in creating customer value and building customer relationships Pricing determines: Sales and profitability Competitiveness Brand equity Market penetration and market expansion Considerations in setting price If customers perceive that a product’s price is greater than its value, they won’t buy it If the company prices a product below its costs, profits will suffer Between the two extremes, the “right" pricing strategy is one that delivers both value to the customer and profits to the company Promotion mix Promotion mix tools: Public relations (PR) involves building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events PR Department functions Press relations or press agency Creating and placing newsworthy information in the news media to attract attention to a person, product, or service Product publicity Publicizing specific products Public affairs Building and maintaining national or local community relationships Lobbying Building and maintaining relationships with legislators and government officials to influence legislation and regulation Investor relations Maintaining relationships with shareholders and others in the financial community Development Working with donors or members of nonprofit organizations to gain financial or volunteer support Public relations is used to promote products, people, places, ideas, activities, organizations, and even nations Companies use PR to build good relations with consumers, investors, the media, and their communities Trade associations have used PR to rebuild interest in declining commodities, such as eggs, apples, potatoes, and milk Major Public Relations Tools News Speeches Special events Written materials Audiovisual materials Corporate identity materials Public service activities Buzz marketing Social networking Mobile tour marketing Internet Promotion mix Promotion mix tools: Personal selling consists of interpersonal interactions with customers and prospects to make sales and maintain customer relationships Salespeople are an effective link between the company and its customers to produce customer value and company profit by: Representing the company to customers Representing customers to the company Coordinating marketing and sales Promotion mix Promotion mix tools: Sales promotions consists of short-term incentives to encourage the purchase or sales of a product or service Whereas advertising offers reasons to buy a product or service, sales promotion offers reasons to buy now Major Sales Promotion Tools Consumer promotions are sales promotion tools used to boost short-term customer buying and involvement or enhance long-term customer relationships Samples Coupons Cash refunds Price packs Premiums Advertising specialties Patronage rewards Point-ofpurchase displays Demonstrations Contests Sweepstakes Games Major Sales Promotion Tools Trade promotions are sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers Discount Allowance Free goods Specialty advertising Major Sales Promotion Tools Business promotions are sales promotion tools used to generate business leads, stimulate purchases, reward customers, and motivate salespeople Conventions and trade shows Sales contests Promotion mix Promotion mix tools: Direct marketing consists of connecting directly with carefully targeted consumers, often on a one-to-one, interactive basis Using detailed databases, companies tailor their marketing offers and communications to the needs of narrowly defined segments or individual buyers Less public: The message is normally directed to a specific person Immediate and customized: Messages can be prepared very quickly and can be tailored to appeal to specific consumers Interactive: It allows a dialogue between the marketing team and the consumer, and messages can be altered depending on the consumer’s response Forms of Direct Marketing Online Marketing Online marketing: Efforts to market products and services and build customer relationships over the Internet Click-only companies: The socalled dot-coms, which operate online only and have no brickand-mortar market presence Click-and-mortar companies: Traditional brick-and-mortar companies that have added online marketing to their operations Online Marketing Domains Promotion mix Promotion mix strategies: Push strategy Pull strategy A promotion strategy that calls A promotion strategy that calls for using the sales force and for spending a lot on consumer trade promotion to push the advertising and promotion to product through channels The induce final consumers to buy producer promotes the product to the product, creating a demand channel members who in turn vacuum that “pulls” the product promote it to final consumers through the channel Tools: primarily personal selling Tools: primarily advertising (TV and trade promotion and print ads, Web site, YouTube channel) and consumer promotion (discount, buy get 1) Promotion mix Promotion mix strategies: ... customer segments 2 Ansoff’s product-market expansion grid Ansoff’s product-market expansion grid Price and roles of pricing policy 1.1 Concept of pricing: Price is the amount of money charged for... services often generates by-products Using by-product pricing, the company seeks a market for these byproducts to help offset the costs of disposing of them and help make the price of the main... its customers 2 The nature and importance of marketing channels The importance of marketing channels: How Adding a Distributor Reduces the Number of Channel Transactions Channel Behavior and