12 BUSN Product and Promotion: Creating and Communicating Value ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Product and Promotion: Creating and Communicating Value • What is a product and product classifications? • What is product differentiation? • What are the key elements of product planning? • What is innovation and how does it relate to the product life cycle? • What is promotion and integrated marketing communication? • What is the process to developing promotional messages? • What is the promotional mix and available tools? BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Product and Promotion: Creating and Communicating Value Product: It’s Probably More Than You Thought Car Wash ~ Cooking Lesson ~ Computer ~ Soap ~ Car Product – anything a company offers to satisfy customer needs and wants Brand ~ Image ~ Packaging ~ Reputation ~ Guarantee BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Product and Promotion: Creating and Communicating Value Services: A Product by Any Other Name Most services embody these qualities: Intangibility Inseparability Variability Perishability BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 BUSN Product and Promotion: Creating and Communicating Value Goods and Services Spectrum ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Product and Promotion: Creating and Communicating Value Product Layers: Peeling the Onion • Core benefit – satisfies the consumers need • The actual product – the physical good • Augmented product – warrantees, free service, instruction manuals, help lines BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Product and Promotion: Creating and Communicating Value Consumer Product Categories Consumer Products – products for personal use or consumption Consumer Products • Convenience Products • Shopping Products • Specialty Products • Unsought Products BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Product and Promotion: Creating and Communicating Value Business Product Categories Business Products – are purchased to use directly or indirectly in the production of another product • Installations Business Products • Accessory Equipment • Maintenance, Repair, and Operating Products • Raw Materials • Component Parts & Processed Materials • Business Services BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Product and Promotion: Creating and Communicating Value Product Differentiation and Planning: A Meaningful Difference A Meaningful Difference: • Product Quality • Features & Benefits • Product Lines & Product Mixes • Branding Packaging BUSN â2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Product and Promotion: Creating and Communicating Value Product Quality Quality Level – how well a product performs its core functions Product Consistency – how reliably a product delivers it promised level of quality BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 10 12 Rational: Product and Promotion: Creating and Communicating Value Positioning Statement: The Big Idea Science: Clinique: “Allergy tested 100% fragrance free” Price: Walmart: “Always low prices Always.” Engineering: BMW: “The ultimate driving machine” Emotional: Sex: Axe: “Bom Chicka Wah Wah” Security: Allstate: “You’re in good hands.” Humor: Vonage: “People stupid things.” BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 26 12 Product and Promotion: Creating and Communicating Value An International Perspective • DeBeers tried running ads in Japan using a proven western strategy But a Japanese woman would shed tears and feign anger that her husband would spend so much money • The revised DeBeers campaign featured a man and wife in their tiny apartment • Receiving a diamond, the wife chides her extravagant husband “Oh, you stupid!” • Taking a big idea to a foreign market requires careful research BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 27 12 Product and Promotion: Creating and Communicating Value The Promotional Mix: Communicating the BIG IDEA • Advertising These tools can help communicate the Big Idea to your target market BUSN • Sales Promotion • Direct Marketing • Personal Selling • Emerging Tools ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 28 12 Product and Promotion: Creating and Communicating Value Emerging Promotional Tools: The Leading Edge  Product Placement  Advergaming  Minimovies  Buzz Marketing  Sponsorships BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 29 12 Product and Promotion: Creating and Communicating Value Innovative Buzz Campaigns • The Subservient Chicken – Burger King launched the website to introduce their new TenderCrisp Chicken Sandwich Burger King reports that sales “significantly increased” • Tremor – Procter & Gamble’s Tremor marketing group recruited 200,000 sociable kids to talk up their products to their peers The teens talk up products in exchange for the inside scoop on new products BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 30 12 Product and Promotion: Creating and Communicating Value A Mini Campaign with Maximum Punch • BMW’s promotional budget for the Mini was 10% of the typical BMW budget • The team developed a quirky campaign with the message: Let’s Motor! • Ads appeared in Playboy, Rolling Stones and on billboards • A 40-page booklet inserted in U.S Magazines • The car played a feature role in the movie Italian Job • Brand awareness rose from 2% to 60% • Mini sales exceeded expectations by 50% • In 2009 Mini launched an official public field trial of the environmentally friendly Mini E BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 31 12 Product and Promotion: Creating and Communicating Value Traditional Promotional Tools: A Marketing Mainstay • Advertising • Sales Promotion Public Relations Personal Selling BUSN â2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 32 12 Product and Promotion: Creating and Communicating Value Traditional Promotional Tools: Advertising • Television • Broadcast • Cable • Newspapers • Direct Mail • Radio BUSN Which media effectively reaches your target market? • • • • Yellow Pages Magazines Outdoor Internet ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 33 12 Product and Promotion: Creating and Communicating Value Traditional Promotional Tools: Consumer Promotion • Premiums • Promotional Products • Samples • Coupons designed to stimulate immediate sales • Rebates • Displays BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 34 12 Product and Promotion: Creating and Communicating Value Traditional Promotional Tools: Trade Promotion • • • • • • Special Deals Allowances Trade Shows Contests Sweepstakes Special Events Designed to simulate wholesalers and retailers to push specific products BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 35 12 Product and Promotion: Creating and Communicating Value If you’re not blogging, you’re slogging Great ideas and scandals spread quickly Blogs offer great opportunity for savvy firms, here are some tips:  Surf through the blogosphere everyday  Consider launching a company blog  Consider advertising on blogs  Consider using the blogosphere to generate word-of-mouth  Draw up commensurate blogging guidelines for your employees BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 36 12 • • • • Product and Promotion: Creating and Communicating Value Traditional Promotional Tools: Public Relations The media looks for newsworthy stories Smart firms push potential news of their company The advantage of PR is that it is usually credible The disadvantage is that marketers don’t control media perceptions BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 37 12 Product and Promotion: Creating and Communicating Value Traditional Promotional Tools: Personal Selling Person-to-Person presentation of products • Today selling means building relationships • Personal selling is best for: • High-ticket items • Complex products • High volume customers BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 38 12 Product and Promotion: Creating and Communicating Value Personal Selling Process Prospect and Qualify Handle Objections BUSN Prepare Close Sale Present Follow-up ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 39 12 Looking Back • What is a product and product classifications? • What is product differentiation? • What are the key elements of product planning? • What is innovation and how does it relate to the product life cycle? • What is promotion and integrated marketing communication? • What is the process to developing promotional messages? • What is the promotional mix and available tools? BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 40 ... Variability Perishability BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 BUSN Product and... product features BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 11 12 BUSN Product and... existing product BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 21 12 BUSN Product and