Managing Products for Business Markets Chapter 11 Business M ARKETING MKTG 450

1. Managing Products for Business Markets Chapter 11 Business MARKETING MKTG 450 Dr. Irvine Clarke III

2. Chapter Objectives To understand… • core products - the tangible link between core competencies and end products. • the strategic importance of providing competitively superior value to customers. • the various types of industrial product lines and the value of product positioning. • how to build a strong high-tech brand. • a strategic approach for managing products across the stages of the technology adoption life cycle.

3. Core Competencies • Key dimensions - Technology - Knowledge - Management Skills • Give rise to core products • Across SBUs • Producing many different end-user products

4. Identifying Core Competency • Provides potential access to array of markets • Contribute to customer benefit - What creates value in a consumer’s perspective? • Difficult for competitors to imitate • Rarity of core competency • Time it will take to imitate • Difficulty in understanding the source of the competence

6. Quality • What is quality? • Name 4 “quality” products? • What common characteristics do they share?

7. Quality • Baldridge Award • Quality sells globally • Gains company attention • Supply chain effects • Assists in controlling costs

8. Product Policy • Proprietary or catalog items • Produced for inventory • Custom-built items • Standard items offered with accessories and options • Custom-designed items • Items to meet the needs of one or a small group of buyers • Industrial services

9. Defining the Product Market • Defining the product/market boundaries helps identify needs and the nature of the technology and brand-level competition • Product • Technological dimension • Value-added dimension • Market • Customer segment dimension • Customer function or benefit dimension

10. Product Positioning • Business customers evaluate your product by attributes (functions or benefits) • All attributes are not equally important to customers nor are they all differentiated from competition • Determinant attributes are used for differentiation • Make unimportant attributes of your product important to customers • Maintain superior differentiation • Close the gap on inferior differentiation

11. High-technology Products • Brand equity is important for B2B marketers to establish and maintain loyalty • Building brand equity • Product characteristics and benefits represent product competition • Brands are differentiated by the ability to deliver value to consumers, establish a connection between consumer feelings and the brand, and by personalizing the brand • Appropriate for global strategies

13. Stages of the Technology Adoption Life Cycle

14. Strategies for Mainstream High-tech Markets • Bowling alley • Focus on one or two key segments to build good reference sites • Tornado • Ramp up production, distribution, drive to the next lower price point • Main Street • Develop value-based strategies for many different market segments in maturity stage

15. Questions or Comments? Irvine Clarke III Associate Professor of Marketing James Madison University College of Business Marketing Program MSC 0206, ZSh 643 Harrisonburg, VA 22807 Phone: 540-568-3049 e-mail: CLARKEIX@JMU.EDU Home Page: http://welcome.to/dr.clarke