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PartThreeDevelopingthemarketingmixLectureSevenProductStrategyAtaglanceDefineproductandmajorclassificationsofproductsandservicesUnderstandingindividualproductdecisionsExplainthedecisionsofdevelopingproductlinesandmixesDefinethestepsinthenew-productdevelopmentprocessDescribethestagesoftheproductlifecycleProductAnythingthatcanbeofferedtoamarketforattention,acquisition,use,orconsumptionthatmightsatisfyawantorneed.ThreelevelsofproductQualityStylingPackagingBrandnameFeaturesAfter-saleserviceInstallationWarrantyDeliveryandcreditRepairingCore,benefitorserviceThreelevelsofproduct(Airline)In-flightservicesDutyfreeshoppingMealsSeatallocationSchedulesSafetyrecordQantasClubPrioritybaggageFrequentflyerschemeHolidayPackagesToursTime-criticaltransportFlightbookingsystemGenericProduct•Stores,preserves,cools,andotherwisehelpstosatisfyhomefood-consumptionneedsTangibleProduct•Color•Design•Quality•Size•Weight•Features•Materialusedinconstruction•Efficiencyinuse•Powersource•BrandnameAugmentedproduct•Image•Status•Guarantee/warranty•Delivery•Installation•Repairfacilities•Instructionsandtechnicaladvice•Credit•Returnpolicy•Follow-upserviceThreelevelsofproductContinuumofGoodsandServicesAlmostPureGoodsGoodswithServicesHalfGoods,HalfServicesServiceswithGoodsAlmostPureServicesPhysicalproductsthatarepurchasedandconsumedwithlittleornoservicesProductssupportedwithrepair,maintenance,add-ons,andadviceProductsthatconsistofbothgoodsandservicesIntellectualpropertyorequipmenttomakegoodsworkExperiencesthatareconsumedduringdeliveryGroceriesGasoline(Self-serve)SteelAutosAutorepairVideogamesRestaurantsBookstoresMovietheatersPreparedfooddeliveryRentalmoviesTrainingbooksSoftwareElectronicmailFaxserviceHealthclubMedicalcareConsultingLegalservicesDaycareProductcanbeclassifiedas:ConsumerproductsconvenienceproductsshoppingproductsspecialtyproductsIndustrialproductsCapitalitems:installation,accessoryequipmentMaterialsandparts:rawmaterials,components:SuppliesTypeofProductConsumerCharacteristicsConvenienceShoppingSpecialtyKnowledgepriortopurchasehighLowHighEffortexpendedtoacquireproductMinimalModeratetohighAsmuchasnecessaryWillingnesstoacceptsubstitutesHighModerateNoneFrequencyofpurchasehighModerateorLowVariesInformationsearchLowHighLowMajordesireAvailabilitywithouteffortComparisonshoppingtodeterminebestchoiceBrandloyaltyregardlessofpriceandavailabilityExamples(a)Staple:cereal(b)Impulse:candy(c)Emergency:tirerepair(a)Attribute-based:name-brandclothes(b)Price-based:budgethotelHellman’smayonnaiseCharacteristicsofConsumerProductsProductattributesBrandingPackagingLabelingProductsupportservicesIndividualproductdecisionsShouldeachproductbeindividuallyorfamily-branded?•Individualbrandnames•Blanketfamilyname•Separatefamilyname•Company/IndividualnamesShouldabrandbedevelopedfortheproduct?•Brand•Non-brandShouldtwoormorebrandsbedevelopedinthesameproductcategory?•Onebrand•MorethanonebrandShouldthebrandberepositioned?•Brandrepositioning•NobrandrepositioningShouldotherproductsbegiventhesamebrandname?•Brandextension•NobrandextensionWhoshouldsponsorthebrand?•Manufacturer’sbrand•Privatebrand•MixedbrandBrandingdecisionBrandsponsordecisionFamilybranddecisionBrandextensiondecisionMultibranddecisionBrandrepositioningdecisionAnoverviewofbrandingdecisionsFewproductlineswithafewitemsineachManydifferentproductlineswithanumberofitemsineachManydifferentproductlineswithafewitemsineachFewproductlineswithanumberofitemsineachNarrowBroadShallowDeepProductLineBreadthProductLineDepthLowLowLowLowLowLowHighHighHighPriceHighHighHighQualityPresentproductPresentproductPresentproductNewproductNewproductNewproductNewproductStretchingdownwardStretchingupwardStretchingbothwaysProductlinestretchingdecisionWhyafirmneednewproducts?NewproductsleadtosalesgrowthorstabilityofferdifferentialadvantagesRespondtoconsumerneedsRiskmaybelessenedthroughdiversityIncreaseprofitsandcontrolMajorissuesinnew-productdevelopmentIdeagenerationIdeascreeningConceptdevelopmentandtestingMarketingstrategy&BusinessanalysisProductdevelopmentTestmarketingCommercialisationProductLifecycleIntroductionTheproductistargettoaparticularmarketandintroducedtothatmarketGrowthTheproductbecomeswell-knowninthemarketandsalesvolumeincreasesDeclineThevolumedeclinesasdemandfortheproductdeclinesorcompetitionincreases.MaturitySaleshitapeakthenbegintoleveloffasaresultofcompetitionfromnewandexistingproducts.StageinLifeCycleCharacteristicsIntroductionGrowthMaturityDeclineMarketingobjectiveAttractinnovatorsandopinionleaderstonewproductExpanddistributionandproductlineMaintaindifferentialadvantageaslongaspossibleCutback,Revive,orterminateIndustrysalesIncreasingRapidlyincreasingStableDecreasingCompetitionNoneorsmallSomeSubstantialLimitedIndustryprofitNegativeIncreasingDecreasingDecreasingCustomersInnovatorsAffluentmassmarketMassmarketLaggardsProductmixOneortowbasicmodelsExpandinglineFullproductlineBest-sellersDistributionDependsonproductRisingnumberofoutletsGreatestnumberofoutletsDecreasingnumberofoutletsPricingDependsonproductGreaterrangeofpricesFulllineofpr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