Airline Paper Bus 6190

Great example Airline

What 5 product levels constitute the "customer value hierarchy?

Core benefit: basic product, expected product, augmented product, and potential product

core benefit 1st level: the service or benefit the customer is really buying. Rest and sleep

basic product" 2nd level: the core benefit turned into a product. Bed, bathroom, towels

"expected product?" 3rd level: a set of attributes and conditions the hotel guests expect with purchase. Clean bed, fresh towels

augmented product? 4th level: the product is changed to exceed customer expectation. Free Internet; free breakfast

the potential product? 5th level: here is where companies search for new ways to satisfy customers and distinguish their offering. Future augmentations

Product Life Cycle

INTRODUCTION

The Company’s objective in the early stages of the product life cycle is to stimulate demand for the new market entry. Since the product is not known to the public, promotional campaigns stress information about its features and benefits. Losses are common during the introductory stage due to heavy promotion and extensive research and development expenditures.

In this phase, the public becomes acquainted with the merits of the product and begins to accept it. Mktg strategies inform potential customers, induce product trial, and secure distribution

However, the ground is being laid for future profits. Companies expect.to recover the costs and to begin earning profits when the new product moves into the second phase of its life cycle the growth stage.

GROWTH

Sales volumes rise rapidly during the growth stage as new customers make initial purchases and early buyers re purchase the product. 'Word of mouthl and advertising makes buyers to make trial purchases.

realize substantial profits from its investment during the growth stage, the product attracts competitors.

Success breads imitation and other companies rush into the market with competitive products. The majority of...