1. What is a product and how can product planners build customer value?
A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include more than just tangible objects. Broadly defined, “products” also include services, events, persons, places, organizations, ideas, or mixes of these.
A product can be thought about on three levels. Each level adds more customer value. The most basic level is the core customer value, which addresses the question What is the buyer really buying? When designing products, marketers must first define the core, problem-solving benefits or services that consumers seek. At the second level, product planners must turn the core benefit into an actual product. They need to develop product and service features, design, a quality level, a brand name, and packaging. Finally, product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits.
2. How does an industrial product differ from a consumer product? Discuss the types of industrial products and provide an example of each.
Industrial products are those purchased for further processing or for use in conducting a business. Thus, the distinction between a consumer product and an industrial product is based on the purpose for which the product is bought. If a consumer buys a lawn mower for use around home, the lawn mower is a consumer product. If the same consumer buys the same lawn mower for use in a landscaping business, the lawn mower is an industrial product.
The three groups of industrial products and services include:
(1) materials and parts,
(2) capital items, and
(3) supplies and services.
(1) materials and parts
Materials and parts include raw materials and manufactured materials and parts. Raw materials consist of farm products (wheat, cotton, livestock, fruits, vegetables) and natural products (fish, lumber, crude petroleum, iron ore). Manufactured materials and parts consist of component materials (iron, yarn, cement, wires) and component parts (small motors, tires, castings).
(2) capital items
Capital items are industrial products that aid in the buyer’s production or operations, including installations and accessory equipment. Installations consist of major purchases such as buildings (factories, offices) and fixed equipment (generators, drill presses, large computer systems, elevators). Accessory equipment includes portable factory equipment and tools (hand tools, lift trucks) and office equipment (computers, fax machines, desks). They have a shorter life than installations and simply aid in the production process.
(3) supplies and services
The final group of industrial products is supplies and services. Supplies include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms). Supplies are the convenience products of the industrial field because they are usually purchased with a minimum of effort or comparison. Business services include maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, management consulting, advertising).
3. Discuss the product attributes through which benefits are communicated and delivered to customers.
Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by product attributes such as quality, features, and style and design.
Product quality is one of the marketer’s major positioning tools. Quality has a direct impact on product or service performance; thus, it is closely linked to customer value and satisfaction. In the narrowest sense, quality can be defined as “freedom from defects.” But most customer-centered companies go beyond this narrow definition. Instead, they define quality in terms of creating customer value and satisfaction. Product quality has two dimensions—level and consistency. In developing a product, the marketer must first choose a quality level that will support the product’s positioning. Here, product quality means performance quality—the ability of a product to perform its functions. Beyond quality level, high quality also can mean high levels of quality consistency. Here, product quality means conformance quality—freedom from defects and consistency in delivering a targeted level of performance. All companies should strive for high levels of conformance quality.
Product Features. A product can be offered with varying features. A stripped down model, one without any extras, is the starting point. The company can create higher level models by adding more features. Features are a competitive tool for differentiating the company’s product from competitors’ products. Being the first producer to introduce a valued new feature is one of the most effective ways to compete. The company needs to assess each feature’s value to customers versus its cost to the company. Features that customers value highly in relation to costs should be added.
Product Style and Design. Another way to add customer value is through distinctive product style and design. Design is a larger concept than style. Style simply describes the appearance of a product. A sensational style may grab attention and produce pleasing aesthetics, but it does not necessarily make the product perform better. Unlike style, design is more than skin deep—it goes to the very heart of a product. Good design contributes to a product’s usefulness as well as to its looks.
4. Define brand equity. What competitive advantages does high brand equity provide a company?
Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service. It’s a measure of the brand’s ability to capture consumer preference and loyalty.
High brand equity provides a company with many competitive advantages:
(1) high level of consumer brand awareness and loyalty,
(2) more leverage in bargaining with resellers because consumers expect stores to carry the brand,
(3) ease of launching line and brand extensions due to the brand name’s high credibility,
(4) defense against fierce price competition, and
(5) a basis for building strong and profitable customer relationships.
The fundamental asset underlying brand equity is customer equity—the value of the customer relationships that the brand creates. A powerful brand is important, but what it really represents is a profitable set of loyal customers. The proper focus of marketing is building customer equity, with brand management serving as a major marketing tool.
5. Discuss the brand development strategies marketers use to develop brands. Provide an example of each strategy.
A company has four choices when it comes to developing brands. It can introduce line extensions, brand extensions, multibrands, or new brands.
Line extensions occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category. Examples include microwave Quaker oatmeal, Skippy low fat peanut butter, and Kleenex facial tissue with lotion.
A brand extension extends a current brand name to new or modified products in a new category. Examples include Apple’s iPhone, Quaker oatmeal breakfast squares, and Arm & Hammer carpet deodorizer.
With multibranding, companies introduce additional brands in the same category. For example, Procter & Gamble markets many different brands in each of its product categories.
Finally, a company might believe that the power of its existing brand name is waning and a new brand name is needed. Or it may create a new brand name when it enters a new product category for which none of the company’s current brand names are appropriate.
Wednesday, March 2, 2011
Produk, Perkhidmatan dan Jenama
1. What is a product and how can product planners build customer value?