A Framework for Marketing Management
Ch 9 – Product Mix and New Offerings .......................................................................................................... 2
Ch 10 – Analysing and Marketing Services ..................................................................................................... 7
Ch 11 – Concepts and Tools for Strategic Pricing ...........................................................................................15
Ch 12 – Developing and Managing Strategic and Integrated Marketing Channels .........................................26
Ch 13 – Managing Retailing, Wholesaling, and Logistics................................................................................37
Lecture Week 4 ............................................................................................................................................46
Academic Article: Webinar on MUD Jeans ‘Circular Fashion Business’ - Bert van Son ...................................54
Feedback Lecture Week 4.............................................................................................................................55
Ch 14 – Designing and Managing Integrated Marketing Communications .....................................................56
Ch 15 – Managing Mass Communications: Advertising, Sales Promotions, Events & Experiences, & PR ........65
Ch 16 – Managing Digital Communications: Online, Social Media, and Mobile .............................................75
Ch 17 – Managing Personal Communications: Direct and Database Marketing and Personal Selling .............80
Lecture Week 5 ............................................................................................................................................88
Feedback Lecture Week 5.............................................................................................................................95
Ch 18 – Responsible Marketing in a Global Environment ............................................................................ 100
Lecture Week 6: Socially Responsible Marketing ........................................................................................ 108
Lecture Week 6: SHIFT (Mandatory Article) ................................................................................................ 111
,A Framework for Marketing Management
Ch 9 – Product Mix and New Offerings
Product Characteristics and Classifications
• A product is anything that can be offered to a market to satisfy a want or need, including physical
goods, services, experiences, events, persons, places, properties, organizations, information, and
ideas.
Product Levels: The Customer-Value Hierarchy
• In planning its market offering, the marketer needs to address five product levels.
• Each level adds more customer value, and together the five constitute a
customer-value hierarchy.
• The fundamental level is the core benefit:
o the service or benefit the customer is really buying.
o A hotel guest is buying rest and sleep.
o Marketers must see themselves as benefit providers.
• At the second level, the marketer must turn the core benefit into a basic product.
o Thus, a hotel room includes a bed, bathroom, and towels.
• At the third level, the marketer prepares an expected product, a set of attributes
and conditions buyers normally expect when they purchase this product.
o Hotel guests expect a clean bed, fresh towels, and so on.
• At the fourth level, the marketer prepares an augmented product that exceeds
customer expectations.
o In developed countries, brand positioning and competition take place at this level.
• At the fifth level stands the potential product, with all the possible augmentations and
transformations the product or offering might undergo in the future.
o Here companies search for new ways to satisfy customers and distinguish their offering.
• Differentiation arises and competition increasingly occurs on the basis of product augmentation.
o Each augmentation adds cost, however, and augmented benefits soon become expected
benefits in the category.
o As some companies raise the price of their augmented product, others offer a stripped-down
version for less.
o Marketers must be sure, however, that consumers not see lower quality or limited capability
versions as unfair.
Product Classifications
• Marketers classify products on the basis of durability, tangibility, and use (consumer or industrial)
o Each type has an appropriate marketing-mix strategy.
• Durability and tangibility.
o Nondurable goods are tangible goods (such as shampoo) normally consumed in one or a few
uses.
§ Because these are purchased frequently, the appropriate strategy is to make them
available in many locations, charge a small markup, and advertise to induce trial and
build preference.
o Durable goods are tangible goods (such as refrigerators) that survive many uses, require
more personal selling and service, command a higher margin, and require more seller
guarantees.
o Services are intangible, inseparable, variable, and perishable products (such as haircuts) that
normally require more quality control, supplier credibility, and adaptability.
• Consumer-goods classification.
o Classified on the basis of shopping habits, these include
§ convenience goods (such as soft drinks) that are purchased frequently,
immediately, and with minimal effort;
§ shopping goods (such as furniture) that consumers compare on such bases as
suitability, quality, price, and style;
§ specialty goods (such as cars) with unique characteristics or brand identification for
which enough buyers are willing to make a special purchasing effort; and
§ unsought goods (such as smoke detectors) that the consumer does not know about
or normally think of buying.
,A Framework for Marketing Management
• Industrial-goods classification.
o Materials and parts are goods that enter the manufacturer’s product completely.
o Raw materials can be either farm products (wheat) or natural products (iron ore).
o Manufactured materials and parts fall into two categories: component materials (wires) and
component parts (small motors).
o Capital items are long-lasting goods that facilitate developing or managing the finished
product, including installations (factories) and equipment (tools).
o Supplies and business services are short-term goods and services that facilitate developing or
managing the finished product.
Differentiation
• To be branded, product offerings must be differentiated.
• At one extreme are products that allow little variation: chicken and steel.
• At the other extreme are products capable of high differentiation, such as automobiles, commercial
buildings, and furniture.
Product Differentiation
• Form.
o Form refers to the size, shape, or physical structure of a product.
o For example, aspirin can be differentiated by dosage size, shape, color, coating, or action
time.
• Features.
o Most products can be offered with varying features that supplement their basic function.
o A company can identify and select new features by surveying recent buyers and then
calculating customer value versus company cost for each potential feature.
o Marketers should consider how many people want each feature, how long it would take to
introduce it, and whether competitors could easily copy it.
• Performance quality.
o Performance quality is the level at which the product’s primary characteristics operate.
o Firms should design a performance level appropriate to the target market and competition
(not necessarily the highest level possible) and manage performance quality through time.
• Conformance quality.
o Buyers expect a high conformance quality, the degree to which all produced units are
identical and meet promised specifications.
o A product with low conformance quality will disappoint some buyers.
• Durability.
• Durability, a measure of the product’s expected operating life under natural or stressful
conditions, is a valued attribute for durable goods.
• The extra price for durability must not be excessive, and the product must not be subject to
rapid technological obsolescence.
• Reliability.
• Buyers normally will pay a premium for reliability, a measure of the probability that a
product will not malfunction or fail within a specified period.
• Repairability.
• Repairability measures the ease of fixing a product when it malfunctions or fails.
• Ideal repairability would exist if users could fix the product themselves with little cost in
money or time.
• Style.
• Style describes the product’s look and feel to the buyer and creates distinctiveness that is
hard to copy, although strong style does not always mean high performance.
• Style plays a key role in the marketing of many brands, such as Apple’s tablets.
• Customization.
• Customized products and marketing allow firms to be highly relevant and differentiating by
finding out exactly what a person wants and delivering on that.
• Customized products include M&M’s with specialized messages and Burberry coats with
customer-selected fabric and accessories.
Services Differentiation
• Ordering ease.
, A Framework for Marketing Management
o How easy is it for the customer to place an order with the company?
• Delivery.
o How well is the product or service brought to the customer, including speed, accuracy, and
care throughout the process?
• Installation.
o How is the product made operational in its planned location?
o This is a true selling point for buyers of complex products like heavy equipment.
• Customer training.
o How does the supplier teach a customer’s employees to use new equipment properly and
efficiently?
• Customer consulting.
o What data, information systems, and advice services can companies sell to buyers?
• Maintenance and repair.
o How can companies help customers keep purchased products in good working order?
o These services are critical in business-to-business settings and with luxury products.
Design Differentiation
• As competition intensifies, design offers a potent way to differentiate and position a company’s
products and services.
• Design is the totality of features that affect the way a product looks, feels, and functions to a
consumer.
• It offers functional and aesthetic benefits and appeals to both our rational and emotional sides.
• As holistic marketers recognise the emotional power of design and the importance to consumers of
look and feel as well as function, design is exerting a stronger influence in categories where it once
played a small role.
o To the company, a well-designed product is easy to manufacture and distribute.
o To the customer, it is pleasant to look at and easy to open, install, use, repair, and dispose of.
Product and Brand Relationships
• Each product can be related to other products to ensure that a firm is offering and marketing the
optimal set of products.
The Product Hierarchy
• The product hierarchy stretches from basic needs to particular items that satisfy those needs.
• A product system is a group of diverse but related items that function in a compatible manner.
• A product mix (also called a product assortment) is the set of all products and items a particular firm
offers for sale.
o A product mix consists of various product
lines.
o A company’s product mix has a certain
width, length, depth, and consistency.
• The width of a product mix refers to how many
different product lines the company carries.
• The length of a product mix refers to the total
number of items in the mix.
• The depth of a product mix refers to how many
variants are offered of each product in the line.
• The consistency of the product mix describes how closely related the various product lines are in end
use, production requirements, distribution channels, or some other way.
• These product mix dimensions permit the company to expand its business in four ways.
o It can add new product lines, thus widening its product mix; lengthen each product line; add
more product variants to deepen its product mix; and pursue more product line consistency.
Product Line Analysis
• In offering a product line, companies normally develop a basic platform and modules that can be
added to meet different customer requirements, the way car manufacturers build vehicles around a
basic platform.
• Product line managers need to know the sales and profits of each item in each line to determine
which ones to build, maintain, harvest, or divest.
