Wk8 Presentation.pptx

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					Developing the Marketing Mix:
  Products are either Goods,
   Services or Experiences
             Chapter 8
     Self-check questions 1 & 7
      Self-Check Question One
Qantas is researching service quality concerning seat
allocation tickets with two (0 – 10) Likert-type scale
questions for each stage of the customer’s trip –
purchasing, check in, in-flight services, baggage claim –
and an overall satisfaction question. For example, the
check-in question asked about speed of check-in and
the courteousness of staff. Completed
tickets/questionnaires could be placed in any of the
specially marked receptacles on planes and in terminals
for a chance to win 5000 Frequent Flyer points.
Comment on the possible research findings and their
implications for product design.
           What is a product?
• Anything that can be offered to a market for
  attention, acquisition, use or consumption
  that might satisfy a want or need.

• It includes physical objects, services, persons,
  places organisations and ideas.
• Many products are in physical form such as
  cars, toasters, shoes and eggs; they are goods,
  in the jargon of the economists.

• We define products broadly to include
  tangibles such as services and experiences as
             Core Products
• The basic level of a product
             Product Design
“Buyers do not buy quarter-inch drills; they buy
  quarter-inch holes”
                      -       - Theodore Levitt
             Product Design
The next step:
• build an actual product (a product’s parts,
  styling, features, brand name, packaging and
  other attributes that combine to deliver core
  product benefits) around the core product.
              Product Design
Final step:

• build an augmented product (additional
  customer services and benefits built around
  the core and actual products) around the core
  and actual products by offering additional
  consumer services and benefits.
            Likert-Type Scale
A psychometric scale commonly involved in
  research that employs questionnaires. It is the
  most widely used approach to scaling
  responses in survey research.
For Example…
      Possible Research Findings
• Some consumers expect higher service levels than
  others – they may desire more interaction from their
  frequent flyer program and like to be seated in an aisle
  seat, and require vegetarian meals in-flight.

• Some may expect extra services before their flight in
  one of the 250 Qantas Club lounges across the world,
  and so they join the Qantas Club.
       Possible Research Findings
• Some expect
  augmentation by way of
  packaged tours to holiday
• Some like the idea of
  receiving a bonus in
  points from flying with
  Qantas, so they join the
  airline’s frequent flyer
     Possible Research Findings
• For some consumers however, these
  augmentation elements may not be necessary in
  meeting their product demands.

• Companies may strip away augmentation
  elements, thus enabling the firm to meet the
  requirements of market segments seeking value
  but at lower prices
      Self-Check Question 7
 Provide an example of a company that has
stretched its product line both upwards and
       Stretching the product line
• Stretching the product line both up and down is considered
  as two way stretching.
• Two-way stretching means that the company is extending
  their product lines upwards and downwards to address
  different segments of the market.
• The two way stretch strategy may be adopted by a
  company that sits in the middle range of a particular
• Examples of companies that
  have stretched their product lines
  are Sony, General Motors-Holden,
  and Apple.
• Sony introduced its first Walkman in the middle of the market.
• As lower-market products moved in, so did Sony by stretching
  their product line down-ward with cheaper models of the
  original Walkman.
• At the same time, Sony generated
   a more upmarket version of the
  Walkman by adding more features
  such as play-back only, recording
  options and high-quality playback,
  thus filling all potential gaps in the
                                        The original Sony Walkman
            General Motors-Holden
General Motors-Holden has stretched its product line by
introducing a line of cars that suit every income and every

Holden currently offers customers:

The Barina- Low priced car

The Commodore- Family car

The Statesman- Luxury car
Another company that has stretched their product line
is apple.

Apple currently offer customers:
iPhone 3GS          iPad
iPhone 4            iPad 2
Macbook             iPod shuffle
Macbook Pro         iPod nano
Macbook air         iPod classic
iMac                iTunes

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