What Are the Three Levels at Which a Product Can Be Seen?

Assign manpowert No. 9 Rome Business School Q1 What argon the triplet levels at which a result muckle be bring downn? In response, hire a cover example of crop. The produce is defined as a thing produced by labor or suit or the result of an act or a processand stems from the verb produce from the Latin produce which mover to come to begin with or bring forth. The first economic use of the word was by Adam Smith, known as the father of modern economics. -Kotler et al (1989) For commercialiseers, it is useful to divide the produce into three chief(prenominal) categories, being the amount of m atomic act 53y Product ( Also known as Core Benefit), the Actual harvest-tide and the Augmented Product.You can enamor them in the diagram at a lower place with some examples of what they encompass. -Kotler et al(2006) I shall use the example of the Adidas Sports app arl, a crossroad line of credit which they feed used heavy societal merchandising to promote. Adidas is th e largest sportswear manu particularurer in Europe, and the second largest in the institution. The 11% increase in gross revenue in 2011 thanks to their newborn merchandise efforts has meant an income of round 634 gazillion euros. Out of this, they invested intimately 136 million euros in food market. About 1/6th of their income. -Adidas annual report (2011)The system behind selling their sports app bel, has been to differentiate the go from their competitors same(p) Nike by providing much customization for the guests. They p breaking wind their key strategicalal pillars atomic number 18 Gaining sales and market sh be with key outgrowth categories much(prenominal)(prenominal) as course and hoops within Adidas Sport Performance Leading the indus screen in the fields of customization and interactivity across categories Expanding Adidas Sport carriage in the prodigal-fashion business sector with the Adidas NEO label It is obvious here, that Adidas has investe d heavily in developing all three layers of their product.The Core Product this is the sh be of the product which satisfies the staple expect of a consumer by providing a basic benefit. For Adidas app arel, it provides a comfortable dress in which to do animal(prenominal) exercise. Adidas, how started producing the standard type apparel shirts we appear today in the 1980s when they had their largest boom in sales. The warmheartedness benefit, does not however distinguish the product from competitors offerings, exclusively it is useful to know in order to realize the party a clear ca damage of exactly what need they are fulfilling.The Actual Product This is the physical product into which the core benefit is translated into, solely at this stage, the marketer has to make it physically and cognitively different from the competitors offerings in order for it to sell and pr stock-stillt a curious position in the customers mind. Kotler (2006) states that this can involve decid ing on the graphic symbol level, product and utility f cancel outures, styling, dirting and packaging. It is not the same as the 4Ps of selling, because those hold place and promotion, which are not level product attributes.I shall describe each of these so as to give a full idea of what Adidas has through with(p) to define and perfect the actual product. a) Product Lines In the 1990s, Adidas subdivided their apparel to appeal to three types of customer segments the sportsmen ( for which they open Forever Sport), this was based on the original concept of the blur by founder Adi Dassler . He do Adidas to assistance athletes perform at the peak of their ability, and this goal continues to drive the checks activities today. Adidas performance is c encipher on gibeing the performance needs of all athletes.Forever Sport products are engineered to perform, bringing high-level, performance-oriented products and forward-looking technologies to the market. Forever Sport is str uctured into five main sports categories running, basketball, football, tennis and training for sport. The stigmatize-followers in the life bolt market- or which they opened the style- counselingsed Adidas Originals . The originals line includes the brand NEO. The Label focuses on much accessible scathe proposes, maintaing a pension to competitors. From a geneder split point of view, adidas NEO is tar getting primarily the girls who invoice for two-thirds of the business.The Original division allows adidas to increase its founder into the lifestyle market, without losing sight of its ample heritage as the original performance brand. The Original division is adapt specifically toward consumers who may be less active sports demoteicipants, but who are style setters and style leaders. It is these mountain who set the trends which are later adopted by the mass market. Originals speak to the needs and determine of the lifestyle consumer with concepts that are smart, cool, po sitive, modern and alive. Adidas Originals are the perfect fusion of heritage sport authenticity and global pass style.Lastly, for the sports-elite Adidas opened Adidas Sports means . Adidas defined the last sensation as the Future of sportswear, which includes the labels Y-3 , Porsche Design, Adidas SLVR and Adidas NEO. Their positioning statement was Style your life . The overall selling statement that ties these three product categories is Adidas is in all. They made these product lines for the general public, but the main focus was on supplying the sports wear of the major(ip) sports , focusing on football, tennis, basketball, cricket and athletics and rugby. ) Manufacturing level Adidas owns four factories in China, the US, Germany and Japan, as well as sharing manufacturing with 863 different factories worldwide, 60% being in Asia. For the Y-3 product lines, they arrest used expensive materials at times such as kangroo leather ( football home with kangaroo leather were worn by david bechkam in 2006) , and many enclothe in the SLVR style, in like manner fork up camel fur and the softest of fabrics available on the market ( which inevitably drives the price up) .Most of their apparel, oddly for the sports shirts is made of a polyester/cotton blends. c) Quality level and Pricing Adidas strives to Make athletes better , indeed the quality of their apparel has been produced to mirror that statement. The fact that their shirts are worn by the best athletes ( and celebrities) in the world such as Rafael Nadal in tennis, David Beckham in football and Suresh Raina in Cricket all told prooves the quality of the apparel they sell. In their own oral communication Ensures Adidas material quality meets or exceeds customer expectations Ensures Adidas takes a leadership role in the industry in terms of material quality and color management Leads material quality in the pursuit for continuous product and process improvement -Adidas (2011) In regards to pri cing, Adidas is still adopting a price shaving system on their new products. For example, shoes in the Y3 and SLVR line cost about 300-700 USD. The price decreases with to a greater extent economical brand ranges such as the Adidas originals, but still remains higher than the competitors like cougar and Nike.They do as well accommodate used however penetration pricing, especially in their new strategic markets like central Russia and china, to ensure their products stay competitive at the point of sale. d) Styling level The style of Adidas has been focused nigh being a young for the type of customers which were the main users of the apparel upcoming sports men , or volume who want to be in shape ( because feel younger). They say the design of their clothing should be elegant, timeless, honest, inspiring and courageous.To ensure they recruited the best designers, they opened their own design academy with schools in Tokyo, New york and London, as well as hiring what is proba bly the worlds best youth designer, Japanese Yohji Yamamoto . e) Branding peerless of the biggest marketing handments I think has been that of Adidass brand management, where they established al more or less unparalleled brand identity. They say their brand mission was to be the leading sports brand in the world and they set forth their brand measures to be Authentic, passionate, groundbreaking, inspirational, committed and honest.Adidas believe that consumers want choice. Therefore, the group implemented a multi-brand strategy, which allows them to enceinteise on opportunities from some(prenominal) perspectives, as both(prenominal) a mass and a niche player. According to that, the brand is able to come on a unique identity and focus on its core competencies, whilst at the same time providing the group with a handsome spectrum of products. International marketing is crucial for the group in its quest to generate substantial cabbage as survival depends on their establish ed presence on the global world market.Their strategy was to concentrate on specific customer needs and wants. As they put it Only by identifying and understanding consumers buying habits, their fittingness level, their motivations and goals for doing sport and their individual lifestyle, can we create meaningful products, operates and experiences that build a unyielding impression To do this , they divided each product segment e. g the Adidas originals into various brands which focused on target-specific wants as as to generate greater customer loyalty.Each brand is responsible for the execution of its own strategic focus ( DE-centralized management approach) by creating a constant stream of innovative and inspiring products and generating communication strategies that represent each brand and category in an engaging and compelling course. Their major brands are NEO, SLVR, Y-3( high price range), Reebok ,Adidas originals, Adidas golf and CCMHockey. Reebok is an especial s uccess story of their brand because it didnt stem rom them, but was acquired as part of a global expansion strategy in It occupies a specific market which then aches Adidass brand strategy instead of cannibalizing it. Its market is similar to that of the Adidas Originals, Reebok is suppose to make the consumers fit for life. Innovation at the brand is rooted in developing technologies and concepts that enable consumers to train at their best each day, whether they are running to keep fit, exercising in the gym or participating in early(a) fitness activities.Reebok Classics leverages the fitness attitude and roots of the brand into the lifestyle segment. Reebok thus focuses in-between the two ends of the consumer spectrum as you can date stamp in the diagram below To give the product a brand identity, the focused on getting Brand ambassadors within sports as well as sponsoring many team shirts and events. For example, they teamed up with FIFA, clothing most of the worlds footbal l teams including Manchester united, Barcelona, Argentina, and recently signed up Manchester united encouragementger Nani as their new brand ambassador.It is to be noted, they do not only contrive one, but several brand ambassadors for their different apparel product categories. For example, they hired NBAs champion Kobe Byrant to reinforce Adidass support of the best of the athletes and withal their design credentials. f)Packaging Adidas helps customers distinguish between the fakes and the originals with the help of its packaging. Most uniform bought even in the shops lease several tags with manufacturing details, composition, designer information, history of the item, washing guidelines and a hologram with the logotype that can be seen clearly.The packaging excessively helps to communicate the brand values of sustainability. The packaging for the shoes for example comes from 100% recycled material, and to save on fuel costs, the weight on packaging has decreased by 33% s ince 2006. g) Service Features Adidas tries to help its customers find the right product for them, and most of their service is centered around this. In-store they have trained staff that can consult customers what is the best product depending on the sport they do, or what they want to achieve fitness wise.They also have stylists which in their major stores can help a person re-define their style. Lately, they set up a VFW( a Virtual Footwear Wall) . Its the first in the world and can be found at its flagship store on Londons Oxford Street, which uses advanced touchscreen technology and veridical-time 3D rendered products to allow customers to find out more about products before they buy. They can rotate footwear, view it from ninefold angles, zoom in to see details, etc. The Augmented Product this part of the product is the non-physical part of the product.It usually consists of lots of added value, for which you may or may not pay a premium. It may include the warranty, the c ustomer service support offered , Installation, deli genuinely, financing help and after-sales service. The augment product is an important way to tailor the core or actual product to the needs of an individual customer. The features of augmented products can be converted in to benefits for individuals. For Adidas, the augmented product of their apparel is that it provides a complete solution for the exercising needs of the individual.Through their marketing efforts, they have created an Adidas sports community to make the customer really feel as past of a group when they grease ones palms the apparel. Adidas provides the customers its brand as a way of definition of the self, as one aspires to have the brand personality. It on that pointfore can be used as an group identification tool , for the group that one belongs in, and one that they aspire to be. To help in this, Adidas offers heavy customization of the product as well as the possibility of invention and ordering team shir ts.In their websites miteam. adidas. com , they really try to create a sense of team spirit with their brand, and frequently those who have bought their shirts get invited to events such as their catwalk first steps. Apparel is also waranteed for 6 months after obtain, with the possibility of returns if the thickening is not satisfied with the product. Q2. Provide examples of the four types of consumer products and how varies the way in which they are marketed. The United States Consumer Product refuge Act has an extensive definition of consumer product, which beginsConsumer Product-The term consumer product means any article, or component part in that respectof, produced or distributed (i) for sale to a consumer for use in or around a permanent or temporary category or residence, a school, in recreation, or otherwise, or (ii) for the personal use, function or enjoyment of a consumer in or around a permanent or temporary household or residence, a school, in recreation, or oth erwise but such term does not include (A) any article which is not customarily produced or distributed for sale to, or use or consumption by, or enjoyment of, a consumer,Kotler et al(2010) describes five main types of customer products as you can see bulleted below 1) Convenience Products are those that customers buy frequently, immediately and with a minimum of comparison and buying effort. e. g candy, powder snips and fast food 2) Shopping products are less frequently purchased and it is those that customers compare carefully on the basis of suitability, quality, price and style. usages are furniture, clothing, used cars, hotel and airline services. ) Specialty products are those with unique characteristics or brand identification for which a significant group of buyers is leave aloneing to make a special purchase effort . 4) Unsought product are consumer products that the consumer either does not know about or knows about but does not usually think of buying. Most major inno vations are unsought until the consumer engenders aware of them through advertising. Classical examples are funerals and ocellus donations to the red cross. These products require a lot of advertising, personal selling and marketing efforts. ) Industrial products are those bought by individuals and organizations for further processing or for use in conducting a business. The three main groups are materials and parts, capital items and supplies and services. I have chosen four customer products, starting from the cheapest to the more expensive. I shall describe the marketing for these four consumer products 1) intercept skirt apples. ( Convenience Product) The pink lady apples come from a variety called cripps apples, before bred by John Cripps which made them an especially crisp and fruity variety.The apple variety is owned by the DAFWA( Department of Agriculture and Food,Western Australia) and run by IPLA ( International beg lady alliance) which is a large order of battle o f apple farmers that have special rights to cultivate the apple worldwide. pick apart Lady brand apples must meet certain trade mark quality specifications. Criteria for the specifications include sugar content, secureness, blemishes and color. Inspections are unfluctuatingly performed to ensure both the quality and traceability of the apple from the orchard to the shop.This is part of their marketing as the Origin is an important point of product differentiation. It brand started when one of the producers offered the apple to his wife for valentine, thus came the idea for the romantic theme of the apple and its main slogan knock Lady-so much more than an apple. Product The main product features (part of the actual product) are Its s elegant with its characteristic glow and perfect interwovenion Its good enough to eat It is sensual with its voluptuous charm, subtle fragrance, delicate and juicy flesh, it is the most glamorous of apples.It denotes pleasure its crunch unite wi th the subtle aromas of wild strawberries, vanilla, litchi and rose give this fruit a unique and long lasting taste It is the perfect balance of sweet and slightly tart. -Pink apple. Com Their marketing campaign was aimed at increasing the apples sales and positioning it as an apple of better taste and higher quality than competitor products . They succeeded, especially in Italy where 97% of the customers thought it was a higher quality apple than the others.They also highlighted the products attributes, and marketed it for its nutritional quality, having high amounts of Vitamin C, antioxidants and fiber. An initial campaign featuring Audrey Hepburn, heroine of cool girls the world over, propelled Pink Lady toward becoming the most popular girl in school. Marketing campaigns revolved around female-centric holidays , Valentines Day, mothers Day, and worthy, trendy causes (breast cancer research). To market the apple they have done the adjacent ) Branded it with appealing heart shape d stickers Most competitors have products with round poorly visible stickers, but Pink Lady has put larger wiretap heart shaped stickers to attract the customers to buy the product in-store b)Promotion Television campaign One of the few apple companies that launched a very successful television commercial-grade to highlight the romantic nature of the apple . Their main target market is obviously women who care about their bodies and want to eat healthy nutritious but also great tasting apples.They also released a couple of arty Posters, featuring people eating the intercept apple in Paris, worthy of bedroom decoration. Pink Lady has undertaken also a wide range of initiatives to boost the brand and consumption in the U. S. , forming alliances with other groups such as the American Cancer Council and Sherwyn Williams. The latter has been an important promotion strategy called paint it pink. Where the customers were encouraged to paint something pink in their life, and then they co uld submit the picture to the Pink company via their website and win cash prizes.They have also been involved in flash mob dances and enlisted Biggest Loser celebrity Ali Vincent as a Pink Lady spokesperson. It is hoped that other initiatives including pre-mix cocktail development and brand sliced apples could also boost the brand in the future. They have also aligned with Walt Disney companies to produce Pink-Kids, that will in the future not only sell apples that have a higher sugar content than the ones for adults, but also make pre-packaged snacks .Pink lady also uses heavy occasion-marketing , offering customers discounts, apple recipes, gift bouquets with roses and apples as well as cards with pink lady cartoons as a part to boost sales for occasions like Valentine and Mothers day. Online, through their website Pink lady offers many , recepies, competitions like the food picture taking award, customer opinion blogs. They use other websites such as causebook and twitter to pr omote awareness of the brand.They also organize and take part in events such as the Vitality show ( wellness and fitness exhibition in the UK), The Virgin London endurance contest and the Valentines day bonanza, where the winner this year won a new FIAT 500. c) Elite Pricing Pink Lady apples cost on average 3. 20 Euros per kilo, which is about 1. 50 euros more than their competitors. They distinguish their product through this, thus appealing to the more wealthy health-conscious customers. They target the generation X and baby boomer females, who have more disposable income on luxuries.As John Reeves, the CEO Says The Pink Lady is high priced even when its on promotion d) Place Pink lady apples are not sold immediately by the company but via upmarket retailers such as Coop supermarkets in Italy, or Waitrose and Sainsburys in the UK . Their marketing campaign recently has been aimed at increasing sales in developed countries of the world. Here, is an example of a couple of countri es. They have started marketing with retailers in Brazil, India, China (giving import licenses in Shanghai and Shenzhen)and Russia.They do this by organizing B2B exhibitions and meetings, with potential wholesalers and retailers who then push the product to the customer through in-store promotions. For their discipline customers, Pink lady utilise the concept of Experiential marketing . They opened many kiosks on the high streets of the big cities like London, gave wanton apples away at offices, talked face to face with the customers and went into schools to tell the romantic foundation story. This really encouraged the customers to try the apple and then buy it. )Customer Relationship management This was designed for email marketing to the 8,000 strong Pink Lady Club database to engage with Pink Lady loyalists, to promote the weekly competition www. pinkladysunshine. co. uk/your-sunshine-moment/ and encourage them online to enter the main competition. It also kept track of onli ne poles, customer surveys and general comments posted about the apple online. Overall, the Pink lady has differentiated itself from its competitors by positioning itself as an apple for women who was both nutritional and sensual to eat.The augmented product included the membership that one could have to the Pink club, the competitions one could enter, as well as the information one had on its production and origins. The mainly societal marketing approach aimed to increase sales in the Northern hemisphere before moving onto the southern hemisphere worked incredibly well, letting them be the no. 1 favored apple of Europe by 2012 and providing them with a sustainable competitive advantage. 2) Zara wearable (Shopping Product) Zara is owned by the Inditex Group.Inditex Group is a large company based out of Spain running around one hundred stores dealing with textile design. Inditex operates over 4,350 stores worldwide with brands like Massimo Dutti, Bershka, Oysho, Pull and Bear, Zara, Zara Home, Uterque, and Stradivarius(History of Zara, 2008) Zara is present in 71 countries, with a network of 1,475 stores located in major cities throughout the world. The group also has a dispersion center in Zaragoza, called Plataforma Europa, which distributes to all the Zara stores within Europe. Marketline France Apparel retail industry report, 2008, pg. 20) Zaras marketing strategy has been centered around creating Zara clothing, not as a fad but more as a lifestyle choice for the independent working woman. They seek to bring the major catwalk models into the ordinary life by do the design more practical and economic. To do this, they had to understand the psychology of their customer needs. Including, what makes the customers re-buy Zara products and how they feel when they are wearing them. They discovered that 1/3 women dont like the way their clothes fit them.To overcome this, Zara recruited a team of designers that completely revolutionized the Product, making them look beautiful on almost every body. They did this by accentuating the style and neutralizing the body contours beneath the body. Now, the customers who wear Zara have an immediate self esteem boost, which is why the company boasts an astounding growth of about 18% per year. 1) Place . Zaras target market is the Euro-chic crowd who wants more fashionable clothes with a shorter lead time. Zara produces lower quantities of clothing, therefore the supply of their items are very scarce.Zara relies more on side of a retail establishment rather than advertising to attract customers. Only . 3 percent of sales are spent on advertising for the company compared to that of its competitors who spend around 3. 5 percent. Zara is more relate with finding the exact retail site that best suits the company rather than spending the extra funds on luring customers into the store . They usually book the bottom floors in large shopping malls, so they are the first stores which a customer visits, an d they also ensure that their spot on the high street Is in the most visible areas and install very large windows in their shops.The inside of their stores is usually moderately lit, with a minimalistic furniture and decor, and a definite professional vibe. This matches with Zaras brand personality . 2) Pricing Zara has often adopted a market penetration pricing strategy by positioning itself cheaper than most of its competitors as you can see in the diagram below c -Slideshare(2012) They give many coupons, online discounts and do frequent bargain offers in their shops. They seek to keep the prices fairly low and to provide quality. as can be seen in the diagram above). The pricing ties in with their logistics strategy to have a high turnover of clothes. Louis Vuittons Fashion Director Daniel Pietter has described the brand as the most innovative and devastating retailer in the world. Zara has a reputation of disrupting the market wherever it goes. A clear brand proposition has been crucial in the brands success. This is a great example of a brand built on a simple idea that is delivered ruthlessly and at a good price Daniel Pietter ,New York times(2010) ) Promotion Zara, compared to her competitors in the haute fashion world has never been a big fan of using television commercials, but rather celebrity endorsement. The most chic considered stars like Angelina jolie, Scarlett Johanesen and Nicole Kidman have all been famous supporters of the Zara brand. To reinforce this celebrity image, all of their marketing material like their brochures glossy, expensive looking and glittery. However, they never make adverts on large billboards nor use posters. Because they do not use a lot of TV advertising, they are spending relatively little on their marketing campaign( about 0. % of occur revenue). Therefore, their marketing strategy is focused around Zaras presence in the world and rapid expansion and distribution of its stores. With more than 1,500 stores around the world in over 70 countries, they open around 150 new stores every year. With the brand becoming world renown, the company is also focusing on sustainable marketing by opening stores which consume 30% less energy compared to the average conventional store. The new stores also save 50% of water consumption and maintains their CO2 emissions below 150 toms a year.With this said, I have to add that Zara does however organise fashion events to attract its clients. They are present in almost every international fashion show from Ethiopia to Finland. This presence not only promotes their brand amongst the elite, but also gives their designers upsurge of inspiration for the constant innovation they have to deliver. 4) Product On-top what I have already mentioned in my opening paragraph , it should be noted that Zara produces most of its clothes in-house, and rarely outsources to ensure major quality control.If they do conciliate to outsource, they move their factories to places like Roman ia and the Czech republic rather than the developing world. This way they also spend less on transportation and can implement a Just-in-time manufacturing approach which guarantees there is a lead time of 2 weeks between the design of the clothing and its appearance in the retail shops. It should be also noted, that Branding is not a big part of Zaras marketing like Adidas. They never place their logo on any of the clothing they make to avoid competition from imitator products.Instead, they train their customers to have a good eye on what is the real Zara product and what is a fake. Overall, with minimum marketing effort, Zara is an interesting company because they have demonstrated to the world you can still have customer loyalty and grow rapidly by offering a great value proposition instead of investing heavily in marketing campaigns. In the end, it is the customers through their own word of mouth that promote Zara the most. 3) ING Direct Online Banking(Specialty Product) ING Is t he worlds biggest online bank, founded in 1991 and the fastest growth bank in UK history.Its main target market is the Generation X and Y who know how to journey the internet very well , who do not have time because of their busy schedule to go to a regular bank, because of their restricted opening ours and also who are interesting in parsimony the funds they have. Regular bank accounts make it easier to take out money, but online banks are more geared to saving money, which is why they usually do not have a minimum deposit requirement. a) Product ING direct offers banking services and support 24/7 for wherever you are in the world.The service aspect of their product ( the augmented product) is their biggest competitve advantage and biggest source of differentiation. Unlike other online banks and investment groups like Ally bank and sink in Street, they assign every customer to a bank representative which stays with you for as long as your relationship may last in the bank. Thi s is part of their CRM efforts ( Customer relationship management) and it has proven to be a big success because people feel less afraid of being just another face in the crowd, and know there is a person in the bank who knows about them and can administer them faster.The customer does not have to pay service fees as well, as in a regular brick and mortar bank and they offer low interest rates to borrowers and high rates to savers. All of this does great word-of-mouth marketing for the bank, who being online relies on it more heavily than a traditional bank , collectible to the fears of online scammers. Another big source of marketing for them and differentiation comes from their customer-specialised products.They have accounts for kids ( Kids Savings accounts), Business Accounts and for Pensioners that are more flexible than traditional banks and offer more benefits, and also a cash prize everytime someone opens an account major way to attract clients. b) Promotion ING Direct br ands iself as the Forward thinking bank. It tries to deliver innovative marketing campaigns, in the main in the form of billboards, posters and television commercials to its clients. It makes an effort to associate its brand with all the number one achievers in the sports and business world.For example, has recently signed a contract with Ferrari and Formula One to depart the major sponsor of their events. They invest also in the promotions at Football games, large billboards and Tennis championships. Recently, they launched a new brand positioning campaign which should make clients see them as the most convenient way to do everyday banking. For this sey made a 60 second youtube spot, which was then viewed on select tv finance and news conduct like CNN, CBC, CTV, Global and TVA, as well as specialty channels including HGTV, History, TSN, RDS, Series+ and Canal D .However, a huge aspect of their marketing efforts still is Viral Marketing . They are heavily dependent on website adv ertising space, you-tube video clips, facebook and twitter online presence to increase brand awareness. They also partnered with application builders to be part of the increasing app market. Now, if you download Sharebuilder app on your smart phone, you can use money directly from your online ING account to invest in the market. The CEO Jim Hemmer says ING Directs mobile banking and trading apps are innovative and reflect the personality of the brand,Overall, INGs financial products have succeeded because it understood its customers. The money ING saved from not building physical establishments, they passed these cost-savings directly onto the customers who now get cash prizes when they open an account, very good rates and no service fees. The marketing has been mostly online for them, even if they still do sponsor many sports events, but most importantly its a bank who has thrived like Zara on word-of-mouth, and based its biggest advertising on the actual products it offered-being more price competitive, more personalized and more appealing than the competitors offerings. ) Nomenus Quarterly ( Unsought product). This magazine is the most expensive in the world ( about 2200 pounds sterling) and came out as a limited edition of 50 published pieces. It was created by the German artist Erik Madigan Heck, as an attempt to create something of lasting real beauty. Its publications show photographic spreads of fashions by Azzedine Alaia and Ann Demeulemeester (shot by Heck himself), as well as works by some of the art worlds sterling(prenominal) figures, including Lucien Freud and Anselm Kiefer.It has to be noted that all art in the magazine are one-off exclusive and original pieces, therefore the product offering appeals not to those who are arouse only in art, but also photography and art collectionists. Price Of course, with the price tag of over 2200 pounds, it is a magazine for the 1% elite of the baseball club who are interested in alternative art forms re presented through painting and photography. The price does sort of a bit or word of mouth marketing for it, as it is the most expensive, and because of this, boasts quite a few online publications solely on its pricing strategy.Erik comments directly on the price saying Let people pay the highest price, because you know what, we have the best product out there and its worth it. And it works. It sells out before it even launches. Packaging The product comes in a unique black box-set laced together with a silver silk ribbon , in which inside there is the magazine. It is not only to protect it, but also to introduce the publication. Please see the picture below, from their own website. Place The product sells online, through its own website, or you can view it for free online Erik calls it the Robin Hood deal of marketing, that is give it for free. He understands that the real customers buy the work to treasure the collection of art which is inside, not to merely have a flip-through. The magazine can also be found at exclusive book clubs like Damien Hirst and stores around mostly London and New York. Then, there are many magazines and televison shoes who quote from the magazine, or use part of its contents, giving it free publicity. For example, Vernissage Tv-an exclusive art and fashion channel is notable for citing Nomenus quaterly and showcasing its work in a couple of short documentaries.Promotion The magazine promotes itself through the business network of its founder, Erik, who basically does not spend anything on promotion he claims, apart from the website expenses. All of the clients of the magazines are mostly designers who know him, or imputeed interested peoples like Kevin Roberts , C. E. O of Saatchi & Saatchi. As a way to promote the magazine itself, its pages feature exclusive photographs of celebrities and major art figures. For example, the latest issues had photos of the supermodel Mary Katrantzou and Tilda Swinton. In conclusion, Nomenus quat erly has demonstrated that passion does pay.It breaks away from the other examples I have used, because it plays in a very niche market of the cream of the high-class, who have very specific and complex wants-especially if they need to pay that kind of price for the product. Its marketing is almost purely word-of-mouth, and has worked extremely well for this magazine that delivers beautiful original work and has in its own market no direct competitors. A completely original, innovative and eccentric consumer product that has demonstrated that via differentiation and quality, it has occupied a very specific market niche and gained a loyal customer base for the long-term. . What is a brand? Why are there many people willing to pay more for branded products than non-branded? A brand is a name, term, design, symbol, or any other feature that identifies one sellers good or service as distinct from those of other sellers. Branding began as a way to tell one persons cattle from another by means of a hot iron stamp, and today its still doing the same thing- differentiating products from each other. -The American Marketing Associations vocabulary (2011) Brands may be the most important tools for creating value and profitable customer relationships.Marketing is about building brands that connect fatly with customers. -Kotler et al(2010) People are more wiling to pay for a branded product than for a non branded because of the concept of Brand Equity. Brand equity is the differential effect that knowing the brand name has on the customer response to the product and its marketing. To explain this further, I shall use the example of a couple of iconic brands. These are defined as having aspects that contribute to consumers self-expression and personal identity.Brands whose value to consumers comes primarily from having identity value are said to be identity brands. more or less of these brands have such a strong identity that they become more or less cultural icons whic h makes them iconic brands. Examples are Apple, Nike, Mc. Donalds and Harley Davidson. People pay more for these brands because of the deep connection these brands have been able to make with their customers. Holt (2004) identifies four main elements to creating iconic brands, which will create a bond with the customer and justify the higher prices than non branded products. Necessary conditions The performance of the product must at least be acceptable, preferably with a reputation of having good quality. Myth-making A meaningful storytelling fabricated by cultural insiders. These must be seen as legitimate and respected by consumers for stories to be accepted. Cultural contradictions Some kind of mismatch between prevailing ideology and emergent undercurrents in society. In other words a difference with the way consumers are and how they wish they were. The cultural brand management process actively engaging in the myth-making process in making sure the brand maintains its pos ition as an icon. Kotler et al(2010) also adds that if the brand is going to be successful, differentiation from competitors is not enough. It needs to be relevant to the customers needs. The more there is a tight fit between the what the customer wants and what the brand gives and stands for, the greater chance of attaining a long term competitive advantage. To summarize, the branding done by companies makes people pay more for them because )They have an worked up connection to the brand- like McDonald people associate It with fun and tasty food. -relating somehow back to their childhood and family bonding. 2) It gives them a way to Express their identity through the brand image or personality. For example, buyers of Harley Davidson are usually men who want to feel more masculine and rebellious. 3) They are guaranteed a certain degree of quality and surety as with the case for Parmigiano cheese, customers repeat purchases because they know what to expect in terms of taste, thus i ts part of a dissonance-reducing buying behavior. ) It gives customers a greater Self Esteem, for example, women who buy Fendi apparel get an immediate self-esteem boost from the purchase because they feel they are a step closer to their aspirational group, and feel they have rewarded themselves in making that purchase. In conclusion, for a brand to remain successful, it must rely less on the products patent attributes and more on creating surprise, passion and excitement surrounding a brand. It must also make sure that its brand image and personality does not suffer as the business extends its product lines or invests into new products. Q4.What are the four characteristics that affect service marketing and the additional marketing considerations for this sector? The service sector is one whos grown is increasing greatly. They not account for about 79% of USAs gross domestic product. There are two different types of services the public ( offered by government and non-profit organiz ations, and the private ones ( offered by all business organizations). Kotler et al (2010) state that there are four main characteristics that define and affect services. They are intangibility Services are intangible and do not have a physical existence.Hence services cannot be touched, held, tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering. Heterogeneity/VariabilityGiven the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider. While products can be mass produced and be homogenous the same is not true of services. g All burgers of a particular flavor at McDonalds are almost identical. However, the same is not true of the service rendered by the same counter staff consecutively to two customers . 3) Perishability Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer. eg A customer disgruntled with the services of a barber cannot return the service of the haircut that was rendered to him. At the most he may decide not to visit hat particular barber in the future. 4)Inseparability/Simultaneity of production and consumptionThis refers to the fact that services are generated and consumed within the same time frame. Eg a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase. Moreover, it is very difficult to separate a service from the service provider. Eg the barber is necessarily a part of the service of a haircut that he is delivering to his customer.The additional marketing considerations for this sector are that a company must prepare that increasingly what drives customer satisfaction is the level of services and the extra services offered compared to competitors, even if a company is selling a physical tangible product. E. g Sky-tv offers free installation when a customer purchases a good. This is part of the augmented product, but it also gives them an advantage point over their competitors. This said, companies must realise that the point of service devliery is when the employees ( representatives) of the firm meet the customers.Successful companies must focus their attentions on both the employees and the customers in order to achieve a satisfied client. This is part of the Service profit chain, that is the chain that links service firm profits with employee and customer satisfaction. For it to be successful it needs Internal service quality- superior employee selection and training to support them when dealing with customers Satisfied and productive service employees- the extra smiles are always passed ont o the customer and adds more value to the overall service deliverySatisfied and loyal customers- if people had good service, it is more likely they will repeat purchase and give out a positive word of mouth Healthy service profits and growth this is the final stage of the link which gives superior service firm performance. To ensure that this chain works well, marketers need to keep their employees happy and keep a good communication from the front-line employees to the top management. To ensure it all foes well, they have to employ a degree of Internal Marketing. Kotler et al(2010) say that internal marketing means that the service firm must orient and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction,infact internal marketing must precede external marketing. An Example is the Four Seasons hostel , that invests on their human resources to motivate, reward and correct their employees when necessary , empowering t hem with the right motivation tools. They give a constant training in order to contentiously improve the service.This in turn, improves the quality of Interactive marketing , being the satisfaction the customer gets after being delivered with a certain quality of service. If this is successful, the customer will repeat purchase and spread a positive word of mouth. REFERENCES Kotler, Philip Gary Armstrong (1989). Principles of Marketing, fourth edition (Annotated Instructors Edition). Prentice-Hall, Inc.. pp. 639 Kotler, Philip. , Armstrong, G. , Brown, L. , and Adam, S. (2006) Marketing, 7th Ed. Pearson commandment Australia/Prentice Hall. Kotler,Philip. ,Armstrong,G. (2010) Principles of Marketing 13th Ed.Pearson education. Australia/Prentice hall. History of Zara. (2008). Retrieved November 3, 2009, from Zara-Clothing http//www. zaraclothing. net/history-of-zara/ MarketLine. (2008, July 8). Zara company profile. Retrieved from http//www. marketlineinfo. com American Marketing Ass ociations Dictionary. Retrieved 2011-06-29. Holt, DB (2004). 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