Chapter 9: Designing and Managing Products

1. A product is anything that can be offered to a market for attention,

acquisition, use, or consumption that might satisfy a want or need. It
includes physical objects, services, places, organizations, and ideas.
Figure 9.1

2.
3. Marketers must uncover the core benefit to the consumer of every product
and sell these benefits rather than merely selling features.
4. Facilitating products are services or goods that must be present for the guest
to use the core product.
5. Product design requires an understanding of the target markets and the
facilitating services that they require.
6. Core products require facilitating products but do not require supporting
products.
7. Supporting products are extra products offered to add value to the core
product and help to differentiate it from the competition.

8. In summary, supporting products offer a competitive advantage only if they

are properly planned and implemented. They must meet or exceed customer
expectations to have a positive effect.
9. The delivery of the service affects the customers perception of the service,
illustrated by the room service example earlier. The augmented service
offering combines what is offered with how it is delivered.
10.If a product is not accessible it has no value.
11.Two barriers to accessibility are hours of operation and lack of knowledge.
12.Sensory terms provide descriptions for the atmosphere of a particular set of
surroundings.
13.The main visual dimensions of atmosphere are color, brightness, size, and
shape.
14.The main aural dimensions of atmosphere are volume and pitch.
15.The main olfactory dimensions of atmosphere are scent and freshness.
16.The main tactile dimensions of atmosphere are softness, smoothness, and
temperature.
17.Bright colors, bright lights, loud noises, crowds, and movement are typical
elements of a high-load environment, whereas their opposites are
characteristic of a low-load environment.
18.As marketers we should understand what the customer wants from the
buying experience and what atmospheric variables will fortify the beliefs and
emotional reaction the buyers are seeking or, in some cases, escaping.
19.In the joining stage, the customer makes the initial inquiry contact.
20.In addition to employeecustomer interaction, hospitality firms also have to
consider how customers will interact with each other during the consumption
stage.
21.The detachment phase is when the customer is through using a product and
departs. For example, hotel guests may need a bell person to help with the
bags.
22.The passenger paying a premium to sit in first class did not appreciate a
worker in dirty construction clothes in the next seat. Hospitality organizations
must manage the interaction of customers to ensure that some do not
negatively affect the experience of others.

23.Involving the guest as an employee can increase capacity, improve customer

satisfaction, and reduce costs.
24.Self-service technologies (SSTs) are a rapidly growing means for increasing
customer coproduction in food-service experiences.
25.A brand is a name, term, sign, symbol, design, or a combination of these
elements intended to identify the goods or services of a seller and
differentiate them from competitors.
26.A brand name is the part of a brand that can be vocalized. Examples are
Disneyland, Hilton, Carnival Cruise, and Outback.
27.A brand mark is the part of a brand that can be recognized but is not
utterable, such as a symbol, design, or distinctive coloring or lettering.
Examples are McDonalds golden arches and Hiltons H.
28.A trademark is a brand or part of a brand given legal protection; it protects
the sellers exclusive rights to use the brand name or brand mark.
29.Brands identify the source or maker of a product and allow consumerseither
individuals or organizationsto assign responsibility for its performance to a
particular company.
30.Brands signal a certain level of quality so that satisfied buyers can easily
choose the product again.
31.Loyalty also can translate into customer willingness to pay a higher price
often to 25 percent more than competing brands.
32.Marketers need to teach consumers who the product isby giving it a
name and other brand elements to identify itas well as what the product
does and why consumers should care.
33.Branding creates mental structures that help consumers organize their
knowledge about products and services in a way that clarifies their decision
making and, in the process, provides value to the firm.
34.Brand equity is the added value endowed on products and services. It may be
reflected in the way consumers think, feel, and act with respect to the brand,
as well as in the prices, market share, and profitability the brand commands
for the firm.
35.The premise of customer-based brand equity models is that the power of a
brand lies in what customers have seen, read, heard, learned, thought, and
felt about the brand over time.
36.A brand has positive customer-based brand equity when consumers react
more favorably to a product and the way it is marketed when the brand is
identified than when it is not identified.

37.Consumer knowledge is what drives the differences that manifest themselves

in brand equity.
38.The quality of the investment in brand building is the critical factor, not
necessarily the quantity beyond some minimal threshold amount.
39.A brand promise is the marketers vision of what the brand must be and do
for consumers. At the end of the day, the true value and future prospects of
a brand rest with consumers, their knowledge about the brand, and their
likely response to marketing activity as a result of this knowledge.
40.Understanding consumer brand knowledgeall the different things that
become linked to the brand in the minds of consumersis thus of paramount
importance because it is the foundation of brand equity.
41.Unlike food courts in which restaurants are operating by individual
proprietors, multi-branding features different brands owned by a single
company operating under a common roof.
42.This concept is similar to multi-branding with two or more brands but with
different ownership. These brands may or may not be operated by a single
proprietor.
43.Another form of co-branding is two entirely different products that may have
common ownership operating together.
44.A company can obtain new products through acquisitionbuying a whole
company, a patent, or a license to produce someone elses product.
45.New product development starts with idea generation, the systematic search
for new ideas.
46.The company should carefully define the new product development strategy.
The strategy should start with what products and markets to emphasize.
47.The companys salespeople are another good source because they are in
daily contact with customers.
48.Consumer needs and wants can be examined through consumer surveys.
49.Often, the copy product is of inferior quality and may create a poor reputation
for the product class, so when the original company enters the market it must
overcome a negative image.
50.Distributors are close to the market and can pass along information about
consumer problems and new product possibilities.
51.Suppliers can tell the company about new concepts, techniques, and
materials that can be used to develop new products.

52.The idea or concept screening stage is the appropriate time to review

carefully the question of product line compatibility.
53.A product idea envisions a possible product that company managers might
offer to the market.
54.A product concept is a detailed version of the idea stated in meaningful
consumer terms.
55.A product image is the way that consumers picture an actual or potential
product.
56.A clear product concept greatly assists with branding, trade, and positioning.
57.Concept testing occurs within a group of target consumers. New product
concepts may be presented through word or picture descriptions.
58.The next step is marketing strategy development: designing an initial
marketing strategy for introducing the product into the market.
59.The first part describes the target market, the planned product positioning,
and the sales, market share, and profit goals for the first few years.
60.The second part of the marketing strategy statement outlines the products
planned price, distribution, and marketing budget for the first year.
61.The third part of the marketing strategy statement describes the planned
long-run sales, profit goals, and marketing mix strategy.
62.Market testing allows the marketer to gain experience in marketing the
product, to find potential problems, and to learn where more information is
needed before the company goes to the great expense of full introduction.

63.Figure 9.5

64.During product development, sales are zero and the companys investment
costs add up.
65.Introduction is a period of slow sales growth as the product is being
introduced into the market. Profits are nonexistent at this stage because of
the heavy expenses of product introduction.
66.Growth is a period of rapid market acceptance and increasing profits.
67.Maturity is a period of slowdown in sales growth because the product has
achieved acceptance by most of its potential buyers.
68.Decline is the period when sales fall off quickly and profits drop.
69.In practice, it is very hard to forecast the sales level at each PLC stage, the
length of each stage, and the shape of the PLC curve.
70.The products current PLC position suggests the best marketing strategies,
and the resulting marketing strategies affect product performance in later
life-cycle stages.