Product and Service Flashcards
Origins of Marketing Mix
- Concept came from Neil Borden, who reflecting on this in 1984 says that the term came from James Culliton’s description (1948) of a business executive as a:
○ “decider,” an “artist”—a “mixer of ingredients,”
§ who sometimes follows a recipe prepared by others,
§ sometimes prepares his own recipe as he goes along,
§ sometimes adapts a recipe to the ingredients immediately available, and
§ sometimes experiments with or invents ingredients no one else has tried.
4P’s Product
- Product
- Price
- Place
- Promotion
7P’s of services
- Product
- Price
- Place
- Promotion
- (Process)
- (people)
- (Physical Evidence)
product lifecycle Vernon 1960’s
- Product development, when you’re making it and manufacturing, below 0 and no money is being made, spending money and making none back
- Introduction- first sell and break even, profits grow
- Maturity- more people in the market, better features, maybe less shares in the market
○ But, generic is present, and more of a commodity
○ Innovation is more incremental
○ More price sensitivity - Competition is different at different stages
- Decline
○ Some things become niche e.g. black and white photography
○ Some disappear
Symptoms and Causes of Failure (for companies)
Often companies don't look into why that market is changing, or believe the market isn't shifting to new tastes People don’t innovate for many reasons - No resources - Inefficiency - 'that's how we've always done things'
Blue Ocean Strategy
- Spotting marketing opportunities,
- Essentially empty market
- Developing a new market
Red ocean
many people in this market i.e. mature; more incremental, “me-too”
Blue Ocean Strategy definition
is a marketing theory from a book published in 2005 which was written by W. Chan Kim and Renée Mauborgne
- 150 strategic moves in 30 industries
- Blue Ocean Strategies are those where firms enter uncontested market space
Value Innovation vs Red Ocean
How to create Blue Ocean Strategies:
- Create uncontested market space by reconstructing market boundaries
- Focus on the big picture
- Reach beyond existing demand and supply in new market spaces
- Get the strategic sequence right.
- Don’t look at existing, but bigger pictures and new market space; understand the opportunities to enter a new market
Red Queen Hypothesis
- From ecology
- Organisms have to continually evolve to survive-
- Based on Red Queen from Alice in Wonderland who has to run to stand still
- Organisations need to keep innovating in order to survive, what works in the past might not work for the future
(Van Valen 1975, Bell 1982
Characteristics of Intangible Dominant Services
- Intangible = cannot touch it
○ Cannot store it
○ E.g. airplane seats, don’t sell them, cannot sell them later, it’s gone- Inseparable = from provider
○ E.g. a restaurant, food and be good but service can have an impact on your experience - Perishable - don’t sell service that day, it’s gone = airplane orgs failure
- Variable - external factors can have an impact of the service
- E.g. a hotel in an island
A storm on a different day, room next door people are loud etc.
- Inseparable = from provider
Separable and inseparable service
- Hard services- more tangible
- Soft services- less tangible
Customer Experience
- Rooted in services marketing
- Contributions from Meyer and Schwager (2007), Naechler, Nayer and Park (2016)
- Comes as much – probably more – from practice than from theory
• Direct contact:
○ usually during purchase, use, and service and
○ is usually initiated by the customer.
Indirect contact
○ most often involve sun planned encounters with representations of a company’s products, services, or brands and
takes the form of word-of-mouth recommendations or criticisms, advertising, news reports, reviews, and so forth.
