Week 4 Flashcards
(14 cards)
Products vs Services
Products are tangible, physical, (non) durable, and consistent whereas services are intangible, non-physical, perishable, inconsistent and time/place dependent. It doesn’t always have to be strictly one or the other it can also fall in between as shown in the graph below:
Product & creating
value
= Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or a need. Layers:
(1) Core → basic thing that a product does/is
(2) Basic → the way you shape the product such as the features/quality
(3) Augment →→ supporting a product and providing it services, tangible
(4) Perceived → how the customer perceives the product such as the image and value it gives to the
consumer
→ On the slide on the left you can see an example of how we might classify different cars. Even though they are all cars, we think of them in different in terms of design (basic), services (augmentation), reason for use (core) and what we think when we see people with that car (perceived)
Branding
→ Branding is HUGE.
E.g Coca Cola has the biggest share in the coke industry. In a study, people had to choose between CocaCola and Pepsi, with 65% of votes going to CC and 23% of votes to Pepsi. However, when a blind taste was done, 51% went for Pepsi and 44% went for CC! So taste and objective quality isn’t the only factor, but the way a company is branded can often be more crucial.
= Brands are much more than just logos or names. They are the culmination of a user’s total experience with the product over many years. That experience is made of a multitude of good, neutral and bad encounters such as the way a product performs, an advertising message, a press report, a telephone call, or a rapport with a sales assistant.
→ A strong brand is seen as a key to commercial success, providing many benefit such as:
(a) High brand equity
(b) increased product awareness
(c) Ability to charge a premium price
(d) Reduced susceptibility to price wars
(e) a sound basis for customer relationships
(f) A higher likelihood of repeat purchases
(g) Retail leverage
(h) better chance of success for new products
(i) more attractive for employment
Developing new products
→ New products are important to:
- Increase or defend market share by offering
more choice
- Appeal to different market segments
- Maintain reputation as a leading-edge company
-Diversify into new markets and thereby spread risk
- Make better use of resources such as production capacity Even out peaks and troughs in demand
Product life Cycle (PLC)
PLC = the course of a product’s sales and profits over time Examples:
(1) Introduction: Chat GTP, small market, no competition and low margins
(2) Growth: Oat milk, less new concept, moderate competition and high margin (3) Maturity: Coca-Cola, large market, high competition, moderate margins
(4) Decline: Home phone companies, moderate market with low competition and low margin as people aren’t interested in it anymore due to mobiles phones
Boston matrix (also called BCG matrix or product portfolio)
(1) Super stars: high market growth, high market share. Companies should invest in the stars as they have high future potential
(2) Cash cows: High market share, low market growth. Companies should milk these for cash to reinvest
(3) Question marks: Low market share, high market growth. Companies should invest in or discard these depending on their chances of becoming stars (4) Dawg (pet): low market share, low market growth. Companies should liquidate, divest or reposition these.
Product Adaptation
The 7 P’s
(1) Product→ the characteristics, unique selling facts and overall quality of the product or service being offered
(2) Price → The product’s long-term price plan, including promotions, discounts and special offers
(3) Place → Where the customers will find your product, learn about it and buy it (hopefully!!!!)
(4) Promotion → Methods used to advertise the product through many channels
(5) People → everyone that influences the buyer’s perceptions, including the buyers themselves
(6) Process → How you will deliver the product to clients and provide them with the finest experience possible. Includes procedures, mechanisms and flow of activities by which the service is delivered.
(7) Physical → evidence tangible goods and experiences that convince clients that your product is genuine. In the case of digital, this would include website visits, confirmation emails, testimonials, feedback etc.
People
Services tend to be produced and consumed at the same moment. Service employees (as well as the consumers) are therefore a major factor in consistency of the service quality.
E.g Waiters at a restaurant are important people! Or employees at a big cooperation too! Your people represent you as a company and are a mirror of who you are
Physical Evidence
=
The environment in which the service is delivered; where the company and customer interact. Due to intangibility, consumers perceive greater risks.
-
How your location looks gives different views on what your company is like. E.g restaurants + quality/price/occasion
Process
= includes the procedures, mechanisms and flow of activities by which the service is delivered. It is critical in service satisfaction.
→ E.g in McDonald’s you have a very fast service where everything from ordering to receiving your food is done within 10min with takeout options or eating in.
Blueprinting Process
A process blueprint describes a business process, including details about the activities in the process, the people who perform or know about the activities, the milestone that activities are performed in etc. → It illustrates the whole service by highlighting how the company delivers the service to the customer → It divides all aspects of the service into a process; a set of tasks which have to be carried out in a particular order
(a) Picture or a map (b) illustrates the whole service (c) Divides all aspects of the service into a process
Servicescape
= The environment in which the service assembled and in which the seller and customer interact, combined with tangible commodities that facilitate performance or communication of the service
Service environment (depending on the way it looks, people will have a different perception on your service):
gives information: symbolic cues about the service and the quality of the service
→ Attracts attention: it marks you stand out in the crowd, attracts the right customers
→ creates affect with the consumer: colour, smell, sound, texture, spatial lay out, the customer is influenced This can help us within medical services, retail experience and restaurant preference.
Its can be seen with packaging, facilitators, socialisers, differentiators
› Physical environment is important in creating the right mood (like a casino or a cinema vibe)
→ It can also be that physical environment as the primary value proposition (like Efteling/Centerparcs)
→
› Companies can also use physical environment to give you a more relaxing feeling, so companies like Phillips give a better feeling by giving you a comfort design products / services
Service quality dimensions (rater)
(1) Reliability → The ability to perform the promised service dependably and accurately
(2) Assurance → Employees knowledge and courtesy and their ability to inspire trust and confidence
(3) Tangibles → Appearance of physical facilities, equipment, personnel and written materials
(4) Empathy → Caring, easy access, good communication with customer understanding and individualized attention given to customers.
(5) Responsiveness → willingness to help customers and provide prompt service
