Product and Service Strategy and Brand Management

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2/3/2010

CHAPTER

5

Product and Service Strategy and Brand Management
Slide 5-1

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Explain the offering concept and offering mix portfolio. 2. Describe how the marketing manager modifies the offering mix. 3. Identify and describe the stages in the new-offering development process. 4. Identify and describe the stages in the product life cycle. Slide 5-2

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AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 5. Explain the types of positioning strategies. 6. Define the concepts of brand and brand equity. 7. Describe how brand equity is created as well as its value to organizations. 8. Explain the types of branding and brand growth strategies. Slide 5-3

OFFERING STRATEGY FRAMEWORK
 The profitability of an organization depends on its product or service offering(s) and the strength of its brand(s).

 Marketers face three offering-related strategy decisions: Modifying the Offering Mix Positioning Offerings Branding Offerings Slide 5-4

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CHAPTER 5: PRODUCT AND SERVICE STRATEGY AND BRAND MANAGEMENT

THE OFFERING PORTFOLIO

Slide 5-5

THE OFFERING CONCEPT
 An offering consists of the benefits or satisfaction provided to target markets by an organization.  It consists of the following elements: Tangible product/service Related services
(delivery, setup, etc.) (a physical entity)

Brand name(s)

Warranties/ Guarantees

Packaging Other Features
Slide 5-6

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THE OFFERING MIX
Offering Mix/ Portfolio
The totality of an organization’s offerings is known as its product or service. Groups of offerings similar in terms of usage, buyers marketed to, or technical characteristics. A specific product or service noted by a brand, size, or price. Slide 5-7

Product Lines

Product Items

THE OFFERING MIX
Offering mix decisions concern the:
Width
(breadth)

The number of offering lines.

Depth

The number of items in each line. The extent to which offerings satisfy similar needs, appeal to similar buyer groups, or use similar technologies. Slide 5-8

Consistency

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THE OFFERING MIX
Offering mix decisions depend on the:
Competitive Situation Marketing Strategy Organizational Resources

One Offering

High-Profit or High-Volume Offerings

Complete Lines
Slide 5-9

THE OFFERING MIX
Bundling involves the marketing of two or more product or service items in a single “package” that creates a new offering:

Value Meals

Vacation Packages
Slide 5-10

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THE OFFERING MIX
Bundling:
 Means that consumers value the package more than the individual items.  Is due to benefits received from not having to make separate purchases and the satisfaction from one item given the presence of another.  Provides a lower total cost to buyers and lower marketing costs to sellers. Slide 5-11

CHAPTER 5: PRODUCT AND SERVICE STRATEGY AND BRAND MANAGEMENT

MODIFYING THE OFFERING MIX

Slide 5-12

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OFFERING MIX MODIFICATON STRATEGY DECISIONS
Adding to the Offering Mix Modifying the Offering Harvesting the Offering Eliminating the Offering Slide 5-13

New Offering Development
Trading Up Trading Down

Single Offering Entire Line

ADDITIONS TO THE OFFERING MIX
 Additions take the form of:
Single Offering Entire Line

 Questions to ask when considering new offerings:
Consistency How consistent is the new offering with existing offerings? Does the organization have the resources to introduce and sustain the offering?

Resources

Market

Is there a viable market for the offering?
Slide 5-14

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ADDITIONS TO THE OFFERING MIX
Consistency

 Consider demand interrelationships (offering substitutes or complements) —the cannibalization effect.  Consider the degree to which the new offering fits the organization’s existing selling and distribution strategies. Slide 5-15

ADDITIONS TO THE OFFERING MIX
Resources...
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