Collegiate dissertation from the Business Marketing subject given in the 2nd year of Commercial Economics (2016/2017) by Hummelink at the Fontys University of Marketing Management location Rachelsmolen in Eindhoven.
Business Marketing
College 4 Chapter 5 Managing products and services Jurne Sleddens
1. Managing the firm’s offerings
Successful offerings: be better than your best competitor. However:
Products itself sometimes do not give a sustainable competitive advantage -> Make good
combinations of products and services
Products and services must be managed as a portfolio including: what to include, what to
improve, what to delete (remember BCG Matrix)
Some companies work with product platforms.
Three product types:
1. Catalogue products
Standard items, made in large production runs
Critical decisions: stock size, adding/deleting items
Example: Ahrend (company) has 800 desk chair types.
2. Modular products
Standard items plus extra options
Example: Car with extra options.
3. One piece series
Critical aspects: Coordination and cooperation
Example: Big infrastructure projects as harbours/airports.
Note: Coordination between exterior manufacturer, interior manufacturer, contractor, architect,
investor, transport company (climate problems) are important.
Three service situations:
1. Pre Sales services
Customer buying advice, making blueprints/engineering, product demonstrations
But how to avoid unpaid engineering?
2. Transaction-related services
Shipping to the customer, on-site installation, 24-h delivery, helpline.
3. After sales service
Spare parts supply, maintenance, repair, software upgrading, machine replacement.
Why service offerings:
Less chances for competitive advantage with products only
Services = additional income for the vendor -> ‘every machine sells itself 2 times’
With service you can also serve a large ‘installed base’ from the past -> money
Services = Low risk income for many years
Continous after sales service keeps on giving you market information
Services usually cost less capital investment than products. However, the more products sold
in the past -> More stock -> More services need -> More branche offices needed.
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