Products and Services Flashcards
(21 cards)
What is the BCG Matrix?
It is used for the evaluation of an organisation products portfolio in marketing, sales and planning. It is also a growth/share matrix.
What are the advantages of the BCG Matrix?
Helps to manage balance between current products portfolio’s
What are the limitations of the BCG Matrix?
- Neglects the effects of synergies between business units
- high market share is not the only success factor
- market growth is not the only indicator for attractiveness
What does the Star section of the BCG matrix contain?
Products that grow quickly and have a high market share. Market leading products and require investment to retain the market share. As the products mature and products remain successful they start to migrate to cash cows.
What does the Cash Cow section of the BCG matrix contain?
Products that are growing slowly and have a high market share. Products are the leaders in the market place. Cash flows generated by them are high and are used for Stars and question marks. Firms invest little cash as possible in the Cash Cow to reap the benefits
What does the Dogs section of the BCG matrix contain?
Products that are growing slowly and have a low market share. Dogs are considered cash traps because businesses have money tied up in them.
What does the Question Mark section of the BCG matrix contain?
products that are growing fast and have a low market share. In the best case, question marks turn into stars. If question marks do not succeed they end up becoming dogs.
What is a product?
The tangible and intangible attributes related to physical goods and services, ideas, people, place, experiences and even a mix of these various elements.
Intangible = education, entertainment hairdressing
Tangible = toiletries, frozen food, fruit
Products in between = financial services, health care, theme parks, computer hardware, 3D televisions and fast food retailers.
What are core customer values?
The core, problem solving benefit that the consumer seeks when buying the product. Functional benefit and emotional benefit.
What is actual product?
Consists of the physical good or service that provides an unexpected benefit - features, packages, brand aspects, quality, appearance etc. Markets must turn the core customer values into an actual product
What are augmented products?
consists of the embodied products plus all those other factors that are necessary to support the purchase and any post purchase activities - warranty, repair, delivery, installation, customer service.
What are services?
any act or performance, offered by one party to another, that is essentially intangible. Consumption of the service does not result in any transfer of ownership, even though the service processes may be attached to a physical product.
What are the different characteristics of a service?
- intangibility = no physical thing e.g. advice from a product
- perishability = service is only valid there and then e.g. doctors advice in a years time
- variability = produced as an event for people to consume e.g. theatre
- inseparability = inextricability tied to giver/receiver
- lack of ownership - service products are consumed not kept
What is servitisation?
refers to industry using their products to sell ‘outcome as a service’ rather than a one-off sale e.g. Netflix, Spotify, Adobe.
What do experiences need?
you need both tangible and intangible components to make the experience such as restaurant experiences.
What are value opportunities in the ‘experience economy’?
- enhances consumers engagement
- premium pricing
- builds brand relationships
- collects consumer data generates shareholder content
- unique competitive pricing
What are the opportunities for brand experience design?
Shaped by 2 dimensions - customer participation, connection
4 types of experiences - entertainment, educations, esthetical, escapist.
What are hybrid offerings?
where companies combine products and services to drive revenue, enhance customer value and improve business sustainability. However many firms fail to structure markets and price these combinations effectively.
What are the types of hybrid offerings?
- Flexible bundle = high independence but high complementary, customers can buy components separately but benefit from combining them (Oracles database software and consulting services)
- Piece of mind bundle - low complementarily, high independence, customers pay for assurance and reliability
- Multi-benefits bundle - high dependency and complementary success comes from offering enhanced, must have features (DVR subscription services)
- One-stop bundle - low complimentary and independence, customers buy out of convinces (Regis hair salons and hair care products.
What are the different rules of success?
- Differentiate through products & services - solve complex customer problem or improve a commoditised product values with superior service
- Ensure scalability - centralises or digitises services to reduce costs and improve efficiency e.g. healthcare software.
- Balance revenue streams - determines whether profit comes primarily from the product or service
- Invest in branding - use branding to strengthen the connection between product or services
What do hybrid offerings do?
Significantly boost revenue and customer engagement if executed properly. Companies must carefully analyse market conditions, pricing models and branding strategies to create sustainable product service combinations.
