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Module 4: Marketing Mix 1 (Product policy/design (Conceptual levels for…
Module 4: Marketing Mix 1
Product policy/design
Product:
a performance suitable for satisfying needs and producing a benefit for customers”
Conceptual levels for the products
core product
basic product
expended product, augmented product, potential product
Product policy
comprises all decisions that relate to the design of the market performance
Goods and service typology
Assortment policy
Depth of range
--> change a little bit the product but it remains the same
Breath of range
--> big change
vertical diversification (complements products)
lateral diversification (jump in other needs/possibilities)
horizontal diversification (substitutes)
Physical performance
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.
Performance process
depends on product properties and on the industry
has a physical process level and an informational level
is closely connected with the customer process
starting point
: customer needs
goal
: creating products, meaning goods that can satisfy customer needs and generate benefit
Strategic level
focused on determining the output range, what goods and services a company provides
Important terms
ecnonomies of scale
: reduction of performance's average costs through specializing → less different products, mass production
economies of scope
: increase the breadth or depth of performance → variety of products, individualization
learning-by-doing economies
Outsourcing
Network effect:
collaboration between different suppliers
production breadth/production depth
Operational level
starting point
for planning/controlling the production: type of business
The
operational performance proces
s involves decisions
on the products and on the usage of production tools and methods.
focused on determining which goods and services should be produced when and how
production planning
strongly influenced by the type of business
work preparation, work scheduling, work controlling
Services
service blue-print
Characteristics
principle of uno actu
heterogeneous service (dependent of external factor)
intangible (no transformation of goods)
signifiance of personal contact
service
: act that is performed on a human being/object without the transformation of material goods
increasingly significant in business and marketing; physical goods are more and more perceived as services (smooth transition between material goods and service)
performance =>
service chain
every step counts!
process with a sequence of activities that the customer/object passes through