Chapter 4: Products and Services Flashcards
What is the definition of customer-oriented quality?
a product’s ability to fulfill a customer’s needs as much as possible
From this perspective, quality is the positive (over) fulfillment of customer requirements
What does the product policy encompass?
Encompasses all decision-making criteria that relate to development of market-related performance.
Criteria in product design or an enterprise’s entire performance program:
1. The conception of the particular products, and
2. The conception of the product or services program
What is the system of conception levels?
Has established itself for the design of products or of a product or services strategy
What are characteristics of the core product?
Describes the actual need that should be satisfied (e.g. mobility is not a NEED. Saving time, coming from A to B is a need)
This can be different for the same products
(Example: shoes for dry feet for some target groups, fashion for another target group)
It is crucial to be guided by the core product when designing the basis product.
What is the characteristic of a basic product?
Is the core element of either the physical design or the service chain
(Example: at a hairdresser’s salon = haircut, hotel = bed in the manifestation of a core product as a place to sleep)
What does the expanded product include?
Includes every additional element of a product
==> usually it is a whole system of different physical performance components or service offers.
(Example: Hotel it is the room including the offers of TV, WiFi, bathroom, possibly with whirlpool)
What does the augmented product include?
Includes additional service elements that enhance the good’s or service’s value,
(Example: a nice sitting area or individual room service)
What does the potential product include?
Includes all goods or services available to a customer for potential use
(Example: the wellness center or business center of a hotel)
What does the product levels show?
Product levels show that from a product view, the boundaries between physical goods and services blur. (A physical performance element such as a bathtub is a source of services (bathing, relaxing)
What is the definition of service-dominant logic?
the conviction that marketing of all products, including physical products has to be designed in the sense of service marketing is establishing-
In this logic, Services are often rated as ultimate marketing objectives in the sense of problem solutions.
What is one key difference between physical product manufacturing and service provision?
One key property of services is that the service provision (e.g. a haircut) coincides with the service consumption.
==> the quality of this service is often determined by the experince during service provisoin (e.g. the experience during a flight)
As a result, one is drawn to the conclusion that product design and performance should be discussed together.
What does the change of marketing depend on?
- on the core product one starts with
- treating product primarily as a physical performance (and thus a storable unit) or as a service
- whether one operates on a B (producer) or C (end-customer) market
==> Different focuses in product design and marketing as a whole derive from the type of good or service
What is the definition of a product?
“something that is fit for the satisfaction of a need or the fulfillment of a desire”.
==> a marketable good or service that creates a benefit for an end customer.
Which strategies are there if a company is successful with their product to grow their company?
- some successful companies adhere to one basic product
- If there is a decision to change the goods and services program, there can be an
==> expansion or narrowing (in depth of range or breadth of range) or a fundamental structural change (a shift in emphasis or product variation)
When a company wants to expand or narrow down, they have two directions they can go with their product variation.
Which two are they and what do they mean?
Depth of range
How many goods and services are provided for the solution of an identical problem
Breadth of range
How many types of goods and services are provided for different problems
If a company wants to expand in their breadth of range, they can choose between three directions which are they?
Vertical diversificatoin
==> including new products along the added-value chain or into a product system
(e.g. if a ski manufacturer also operates a skiing area)
Horizontal diversification
fundamentally new products on the same performance level
(e.g. when tennis rackets or even surfboards are included in the range of products in addition to skis
Lateral diversification
fundamentally new product areas
(e.g. if a ski manufacturer offers life insurance)
What is it called, if a company expands their depth of range?
Product differentiation
What is it called if a company narrows down their depth of range?
Standardization
What is it called when a company narrows down their breadth of range?
Specialization
What is the definition of Performance processes?
Performance processes start from preparatory work and lead, via transformation (for material performance) or delivery to customers or their objects (for services), to performance marketed in the sales market
What are three characteristics of performance processes?
- they depend on product properties and on the industry
- they have a physical process level (e.g. installation, assembly etc.) and an informational level (e.g. implementation of customer wishes)
- they are closely connected with the customer process and is triggered by customer requirements.
Finally customer satisfaction is the ultimate goal of the process
What does Efficiency mean? What need does it represent?
Efficiency = do things right
Need for cost-quality optimization
What does effectivity mean? What need does it represent?
Do the right things
Need for strategic focus
In what ways is the customer the catalyst for performance for a relevant target group?
Either directly and personally
==> as an initiator of a specific product category
Or latently and impersonally
==> e.g. in the form of a changing need that market research has identified
How does the performance process work?
The performance process ranges from the explicit or latent customer enquiry to order clarification, construction or design to work preparation.
This is then followed by procurement from suppliers, production, assembly and shipping, and finally, to end-customer service (e.g. the completion of the whole train, that closes the circular flow)
What does design thinking methodically include?
Design thinking methodically includes:
- thinking from the product outward as an independent and important approach to the whole business process.
- Developing methods for promoting innovation in companies, based on strong customer orientation and by building prototypes among other things
What does a performance process start and end with?
Performance lead from intermediate goods and services via transformation (with physical goods) or via performance on customers or their objects (for services) to goods and services sold on markets.
–> the basic structure of performance processes thus starts with input and leads to output via throughput.
What is the added value?
The added value created by the company is the difference between the vlaue of the input and the value of the output.
Which requirements does the performance process have to meet?
The performance process has to meet the requirements of efficiency (do something right in the sense of high quality and reasonable cost) and effectiveness (do the right thing in the sense of the right products in terms of sustainablity and quality for customers and users)
During the performance process, what is the focus at the strategic level?
Focus at the strategic level: determining the output range
Meaning: what goods and services a company provides
(determining the provisions of added value or goods and services
==> production breadth and production depth)
What are the starting points for the strategic decision?
- Customer needs
- Company internal and external resources
- Strategic behavior of compatitors.