Cosmetics Industry c

y Cosmetics y The promise ,

companies sell billions of dollars worth of products y Consumers buy more than just a particular smell

image, company, name, package, and ingredients are all part of the product, as are the stores where it is sold.
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y Service y Product y Any activity or benefit y Anything offered that one party can to a market for offer to another that is essentially attention, acquisition, intangible and does consumption or use that might satisfy a not result in the ownership of need anything. or want.
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y Products,

Services, & Experiences

y Market

offerings, pure tangible goods, pure services, experiences

Experiences include zoos and aquariums 9- 3

Figure 9-1:

Three Levels of Product

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 Every product provides a basic functions

that solves a customer problem The core consist of the benefits customers are provided with when they purchase and use goods and services For examples: locks and alarms provide security, drill provide holes, cars provide transportation and cameras provide memories
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y Refers to the actual product that the

customer buys y The specific offering aimed at the market including tangible features associated with the product benefits y These five elements that are blended to make up the actual product are: design, style, features, quality and packaging
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 The additional bundle of benefits purchased with

the actual product Additional service or benefits that include additional costs This augmented benefit is important because it offers psychological benefits that enhance the value of the core and actual product Augmentation enhances the attractiveness of the product and it a source of competitive advantage By augmenting the product firms are adding values to the product

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y Product and service

classifications fall into two broad classes based on the types of buyers who use them:
y Consumer products y Industrial products
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y Frequent purchases bought with minimal buying y y y y y y

effort and little comparison shopping Consumers do not spend much time shopping for Buyers want to make quick buy at the most convenient location Low price Widespread distribution making the product available at all location Mass promotion by producer Range from staples to product purchase on impulse or in emergency

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y Less frequent purchases requiring more shopping effort y y

y y y y

and price, quality, and style comparisons. Consumers willing to spend time shopping for these products When product is perceived having similar characteristics consumers will shop around looking for the best price Higher priced than convenience goods Selective distribution in fewer outlets Advertising and personal selling by producer and reseller Examples: shopping for electronics appliances. Clothing, home appliances, furniture

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y Strong brand preference and loyalty, requires special

y y y y y y

purchase effort, little brand comparisons, and low price sensitivity Unique characteristics and brand identification Consumers want specific brand and willing to look and search and travel for the brand High price Exclusive distribution Marketers limit the distribution to only exclusive outlet Carefully targeted promotion by producers and resellers

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y Little product awareness and knowledge (or

if aware, sometimes negative interest) y Consumers either do not know about or know about but do not normally think of buying y Pricing varies y Distribution varies y Aggressive advertising and personal selling by producers and resellers

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 Product and Service Classifications Industrial products are those purchased for use in conducting a business or those purchased as ingredients or components to be used in manufacturing. Materials and parts Capital items Supplies and services
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 Product and Service Classifications

Products also include organizations, persons,

places, and ideas

Organizational marketing makes use of corporate image advertising Person marketing applies to political candidates, entertainment sports figures, and professionals Place marketing relates to tourism Social marketing campaigns promote ideas
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Key Decisions
y Individual

y Product attributes y Quality, features, style and design y Branding y Packaging y Labeling y Product support

Product y Product Line y Product Mix

services
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Figure 9-2:

Individual Product and Service Decisions

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Key Decisions
y Individual

y Product line length

y Line stretching: adding

Product y Product Line y Product Mix

products that are higher or lower priced than the existing line y Line filling: adding more items within the present price range

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Key Decisions
y Individual

y Product line width:

y Number of different

product lines carried by company

y Product line depth:
y Number of different

Product y Product Line y Product Mix

versions of each product in the line

y Product line consistency
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y Brands with strong equity

have many competitive advantages:

y y y

y Brands are powerful

assets that must be High consumer awareness carefully developed Strong brand loyalty and managed. Helps when introducing new
y Both Tiger Woods

products y Less susceptible to price competition

and Nike can be considered brands

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Figure 9-3:

Major Brand Strategy Decisions

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Key Decisions
y Brand Positioning y Brand Name Selection y Brand Sponsorship y Brand Development

Three levels of

positioning:
Product attributes

Least effective
Benefits Beliefs and values

Taps into emotions

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Key Decisions
y Brand Positioning y Brand Name Selection y Brand Sponsorship y Brand Development

y Good Brand Names: y Suggest something about the product or its benefits y Are easy to say, recognize and remember y Are distinctive y Are extendable y Translate well into other languages y Can be registered and legally protected

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y Manufacturer brands

Key Decisions
y Brand Positioning y Brand Name

Selection y Brand Sponsorship y Brand Development

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Key Decisions
y Brand Positioning y Brand Name

y Private (store) brands y Costly to establish and

promote y Higher profit margins

Selection y Brand Sponsorship y Brand Development

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Key Decisions
y Brand Positioning y Brand Name

y Licensed brands y Name and character

licensing has grown

Selection y Brand Sponsorship y Brand Development

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Key Decisions
y Brand Positioning y Brand Name Selection y Brand Sponsorship y Brand Development

Co-branding Advantages Broader consumer appeal Greater brand equity Efficient means of expansion into new product categories Limitations Complex legal contracts Requires careful coordination of IMC Requires that partners trust one another
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Key Decisions
y Brand Positioning y Brand Name Selection y Brand Sponsorship y Brand Development

y Line extensions y Minor changes to existing products y Brand extensions y Successful brand names help introduce new products y Multibrands y Multiple product entries in a product category y New brands y New product category
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Figure 9-4:

Brand Development Strategies

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Figure 9-5:

Four Services Characteristics

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y Concept: Service by nature is intangible which y

y y

cannot be seen, touched, tasted and displayed The problem associated to service intangible is the difficulty to convince the consumer for trying or purchase the service The solution of the problem is to incorporate tangible cues to the service Instead for Goods, because goods are tangible, marketing strategy emphasize the intangible benefit derived from consuming the product Example?

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y The concept is service cannot be stored for later usage.

It needs to be sold on the day it is offered to consumer y The problem associated to this characteristic is if service cannot be sold, the service provider will suffer from loss y Solution wise is for service provider to use different strategies to manage demand refer as demarketing y To increase price when demand is expected to increased and lower price when demand is expected to be lowered

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y The concept is service cannot be separated from the y y

service provider and the customers The problem that may arise is if any party was absent the service cannot be delivered The solution to such problem is to consider for the service to be relocated as near as possible to the customers Or the service provider should go and present themselves to the customer s premise instead of expecting the customers to visit the store Or to consider delivering the service using technology i.e video conferencing if location of both service provider and customer are far from each other
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y The concept is service is performed by

human being and human has mood swing y The problem associated to this concept is difficult to deliver the same or standard service from the same service provider y Solution to be considered is for firm to analyze the service process and develop standardize and procedures/blue print to minimize the variability

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Figure 9-6:

Three Types of Marketing in Services Industries

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 Service Firm Marketing Strategies The Service-Profit Chain Internal Marketing: service firms Marketing: train and effectively motivate their employees to work as a team to satisfy the customer Interactive Marketing: recognizes that Marketing: service quality depends heavily on the quality of buyer-seller interaction buyer9- 35

y Service Firm Marketing Strategies y Managing Service Differentiation

British Airways differentiates its service by offering firstfirst-class world travelers private demidemi-cabins
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 Service Firm Marketing Strategies

Managing Service Quality One method of differentiation Customer retention is often the best measure Top service firms are customer obsessed Service recovery and employment empowerment are key Managing Service Productivity Many methods of enhancing productivity Key is to avoid reducing quality
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