Product-Service Information Systems Nature of Products

Transcription

1 Product-Service Information Systems Nature of Products Univ.-Prof. Dr.-Ing. Wolfgang Maass Chair in Economics Information and Service Systems (ISS) Saarland University, Saarbrücken, Germany WS 2011/2012 Fridays, 10:00 11:30 a.m. Room HS 020, B4 1

2 Definition of Goods Goods are aids which are needed to satisfy human wishes. (Schierenbeck, 2003) Unternehmen produzieren Güter durch die Kombination oder Umwandlung anderer Güter. Die von den Unternehmen produzierten Güter bezeichnet man auch als Produkte, [ ] die zur Produktion eingesetzten Güter als Produktionsfaktoren [ ]. (Wöhe, 2002) Goods Economic Goods Shortage à Humans need more of these goods than are available Humans need to make an effort to gain these goods à Price Without shortage of goods, unfulfilled wishes would not exist à Core of the economy Can be traded on a market E.g., food, cloths, cars, machines Free Goods No shortage à Enough goods are available for everyone Humans do not need to make an effort to gain these goods à No price Free goods are often public goods: free for an individual, but national economy pays for them à environment is polluted E.g., air, sunlight (Wöhe, 2002; Schierenbeck, 2003) Slide 2

3 Definition of Product Ein Produkt ist [..] ein Bündel von Eigenschaften, das auf die Schaffung von Kundennutzen (jedweder Art) abzielt. (Homburg & Krohmer, 2009) Aus der Perspektive des Kunden stellt ein Produkt ein Mittel zur Bedürfnisbefriedigung und somit zur Nutzengewinnung dar. (Homburg & Krohmer, 2009) Wir definieren den Begriff Produkt als die Gesamtheit aller Austauschobjekte, die in der Lage sind, einen Wunsch oder ein Bedürfnis zu befriedigen. (Kotler et al., 2007) Wir sehen Produkt als Oberbegriff für Waren und Dienstleistungen an. (Kotler et al., 2007) Produkte sind die Basis des wirtschaftlichen Handels. Sie werden in modernen Gesellschaften gegen Geld getauscht, um den persönlichen Bedarf der Individuen zu befriedigen. (Herrmann & Huber, 2009) Slide 3

4 Product Typology Material/Physical goods: material products Consumer Durables: long-lasting Can be used many times Intensive advice and guarantees needed E.g., TV, car, fridge and machines Commodities: Short-lasting Can only be used once Low marges, a lot of advertising E.g., food, soap, drinks Services: immaterial products Cannot be stored Producer and customer need to be present to produce a service Material goods are needed to provide a service E.g., hair cut, IT-consulting, car repair Products Material/Physical Goods Services Consumer Durables Commodities (Kotler et al. 2007) Slide 4

5 Material Goods Typology Consumer Goods Are used by private consumers Are directly consumed Consumer Goods Typology: Convenience Goods (e.g., food, newspaper, soap, coffee) Shopping Goods (e.g. furniture, clothes, household appliance) Specialty Goods (e.g. special cars, TV, house) Industry/Investment Goods Are used by companies Are used for further production Industry/Investment Goods Typology: Inbound Goods (e.g., resources à fruit, wheat, cotton; semifinished products à steel, cement, tire, gray cast iron) Assets (e.g., buildings, large machines, assembly lines) Relief Goods (e.g., nails, grease, paint) Material/Physical Goods (Kotler et al. 2007) Consumer Goods Industry/Investment Goods Convenience Goods Shopping Goods Specialty Goods Inbound Goods Assets Relief Goods Slide 5

6 Product Perceptions 3 different product perceptions: Substantial product perception: Core product Bundle of physical-technical attributes Objective: satisfaction of functional needs Refers only to material goods, services are not included in this perception E.g. mobile phone: making phone calls Enlarged product perception: Bundle of material goods and services Product can be completely or partly immaterial (service) Objective: enlarged satisfaction of functional needs E.g. mobile phone: hotline if mobile is broken, service in mobile shops Generic product perception: Widest perspective Bundle of all material goods and services providing a benefit to the customer Objective: satisfaction of functional, emotional and social needs Includes image and prestige (brand) E.g., mobile phone: iphone instead of any mobile phone (Homburg & Krohmer, 2009, Kotler 1972) Slide 6

7 Components of a Product (Generic) Product Brand Additional services ( Value added services ) Basic services Packaging/Design of environment Additional attributes Product core (core attributes) (Homburg & Krohmer, 2009) Slide 7

8 Components of a Product Product core: Comprises the core attributes of a product (basic characteristics) General functionality of the product E.g., general driving characteristics of a car Additional attributes: Generate an additional benefit for the customers Exceeds general functionality E.g., air conditioning in a car Packaging/Design of environment: Physical goods: packaging à protection of product, easy handling, influences buying decision Services and physical goods: design of tangible environment à atmosphere E.g., design of a car, atmosphere at the car dealership Basic services: Are expected by the customer while purchasing the product E.g., advice at the car dealer ship Additional services ( Value added services ): Are not expected and assumed by the customer while purchasing Provide further benefit to the customer Objective: competitive advantage, increase of customer loyalty E.g., visiting tour of VW Autostadt while collecting the car Brand: E.g., Audi, VW à (Generic) Product (Homburg & Krohmer, 2009) Slide 8

9 Brainteaser 10 Minutes Think of 3 examples for each of the product perceptions and write them down. Repeat the 6 components of a product and transfer them to a flight with an airline company. Discuss your notes with your neighbour! Slide 9

10 Product Lifecycle (PLC) Product Lifecycle = Every product passes different phases while existing at the market (compared to human lifecycle). Each phase is characterized by different potentials for turnover and profit. à The course of the lifecycle may vary for different products Ideal course of a lifecycle: Phase 1: Introduction à Product is introduced to the market. Low, but rising turnover No profit, but a loss due to product development and market investment costs Low market share High risk of product failure Phase 2: Growth à Sales increase. Turnover is rising disproportionally Break-even point is reached and exceeded Profit maximum is reached at the end of the phase Strongly rising market share Decreasing risk of product failure (Pahl et al., 2007; Runia et al., 2007; Homburg, 2000) Slide 10

11 Product Lifecycle (PLC) Phase 3: Maturity à Product is well accepted by the consumers. Decreasing turnover augmentation, maximum of turnover is reached at the end of the phase Decreasing profit à Intensive competition High market share Low risk of product failure Phase 4: Saturation à Sales is decreasing Decreasing turnover Decreasing profit Decreasing market share Newly developed products are needed Phase 5: Degeneration à Product is replaced by following products Strongly decreasing turnover Hardly any profit or even a loss Strongly decreasing market share Product is taken from the market Maybe: Relaunch of the product due to improvements and adjustment to the customers needs (Recovery) Problems: Time of lifecycles reduces continuously à Time for product development reduces as well à Product development processes need to be improved Lifecycle shown in graph is just the ideal version à Many products flop immediately after market introduction and no profit is gained Other factors of influence are not considered (e.g., marketing activities, economic fluctuations) (Pahl et al., 2007; Runia et al., 2007; Homburg, 2000) Slide 11

12 Product Lifecycle (PLC) Turnover, Profit 1 Recovery 3 Turnover 2 4 Profit Time (Pahl et al., 2007; Runia et al., 2007; Homburg, 2000) Introduction Maturity Degeneration Growth Saturation 1 = Turnover maximum 2 = Break even point à profit 3 = Profit maximum 4 = Break even point à loss Slide 12

13 Product Appearance Product appearance = Exterior of a product Influences product preference à Very complex (Yamamoto & Lambert,1994) Product design à Opportunity to differentiate the own product from the competitors (Löbach, 1976; Veryzer, 1995) Different functions of product appearance for consumers: 1) Communication of aesthetic information (Aesthetic Product Value) 2) Communication of symbolic information (Symbolic Product Value) 3) Communication of functional information (Functional Product Value) 4) Communication of ergonomic information (Ergonomic Product Value) 5) Attention drawing-ability 6) Categorization à Most important functions: symbolic & aestetic product value à Differs according to the target group (Creusen & Schoormans, 2005) Slide 13

14 Product Appearance 1) Communication of aesthetic information Look of product is valued for its own sake. If function and price of two products are equal à Consumer decides for more beautiful one. à Emotional (Bamossy et al., 1983). E.g., Color Style (modern or traditional) à Changes due to product type, cultural background and time (Whitfield and Wiltshire, 1983). Complexity: Very colored product à Valued aesthetically or of low quality (Creusen & Schoormans, 2005). 2) Communication of symbolic information Symbolic meaning à Can be connected with a product or brand due to e.g., advertising (McCracken, 1986), country of origin, or the kind of users (Sirgy, 1982). Symbolic value à Sometimes key determinant for product choice (Hirschman & Holbrook, 1982). Product itself also can communicate symbolic value à Cheerful, childish or expensive appearance (Murdoch & Flurscheim, 1983). E.g., Angular forms: dynamism and masculinity Round forms: softness and femininity (Schmitt & Simonson,1997) Slide 14

15 Product Appearance 3) Communication of functional information Signals the functions that the use of a product can provide (Löbach, 1976; Veryzer, 1995). Differences in the product s ability to perform basic function (e.g., communication), but also in quality (e.g., technology used). Presence or missing influences functional value of the product (Bloch, 1995; Dawar & Parker, 1994). Utilitarian functions of a product are obvious from its appearance à Appearance: also shows important but less tangible attributes (Berkowitz, 1987; Dawar & Parker, 1994). E.g., Large hairdryer: much power Small hairdryer: less power 4) Communication of ergonomic information Comprises comprehensibility and usability of a product (Löbach, 1976; Schürer, 1971; Veryzer, 1995). Consumer sees a product à Gets a positive or negative impression of product handling à Important: Consumer perceives it to be easily used. Indicators of ergonomic product value: ease of operation, weight, stability (Murdoch & Flurscheim, 1983). E.g., Telephone with few, large buttons: easy to use Telephone with many small buttons: difficult to use (Creusen & Schoormans, 2005). Slide 15

16 Product Appearance 5) Attention drawing-ability Gaining attention is important for product purchase à Stimulus is needed (Engel et al., 1995). Product must be an eye-catcher à Needs to stand out from other products (Garber, 1995). E.g., Increasing the product size Bright colors à Needs to be unusual (Engel et al., 1995). 6) Categorization Appearance influences assignment of product to category à If product is typical of category: Recognized more easily (Loken & Ward, 1990). Product should be visually typical à If not: Might not be considered by consumer (Creusen & Schoormans, 2005). However: If product is slightly different from typical product: Regarded positively by consumer (Meyers-Levy & Tybout, 1989; Schoormans & Robben,1997). Products with prestige, exclusiveness, or innovations: Non-typical appearance is important à Uniqueness is valued (Ward and Loken,1988). Slide 16

17 Brainteaser 10 Minutes Think of 2 reasons why a product life cycle could be non-ideal. Think of an example for each of the functions of product appearance. Slide 17

18 Outlook 1. Introduction 2. Design Science in Information Systems 3. Nature of Products 4. New Product Development (NPD) 5. Nature of Services 6. New Service Development (NSD) 7. Nature of Product-Service Systems (PSS) 8. Product-Service Information Systems 9. Designing PSS (1) 10. Designing PSS (2) 11. Empirical Evaluation of PSS (1) 12. Empirical Evaluation of PSS (2) 13. Guest Lecture 14. Advanced Topics: Design Science of PSS Slide 18

19 Literature Books: Engel, J.F., Blackwell, R.D. & Miniard, P.W. (1995), Consumer Behavior, The Dryden Press Orlando. Herrmann, A. & Huber, F. (2009), Produktmanagement: Grundlagen Methoden Beispiele, Gabler Wiesbaden. Homburg, C. (2000), Quantitative Betriebswirtschaftslehre: Entscheidungsunterstützung durch Modelle, Gabler Wiesbaden. Homburg, C, & Krohmer, H. (2009), Marketingmanagement: Strategie Instrumente Umsetzung Unternehmensführung, Gabler Wiesbaden. Kotler, P. (1972), Marketing management; analysis, planning, and control, Prentice-Hall Englewood Cliffs. Kotler, P., Keller, K.L. & Bliemel, F. (2007), Marketing-Management Strategien für wertschaffendes Handeln, Pearson München. Löbach, B. (1976), Industrial Design: Grundlagen der Industrieproduktgestaltung, Verlag Karl Thiemig München. Murdoch, P. & Flurscheim, C.H. (1983), Form, in: Industrial Design in Engineering, Flurscheim, C.H. (ed.). The Design Council Worchester, Pahl, G., Beitz, W., Feldhusen, J. & Grote, K.-H. (2007), Konstruktionslehre: Grundlagen erfolgreicher Produktentwicklung, Methoden und Anwendung, Springer Berlin Heidelberg. Runia, P., Wahl, F., Geyer, O. & Thewißen, C. (2007), Marketing Eine prozess- und praxisorientierte Einführung, Oldenbourg München. Schierenbeck, H. (2003), Grundzüge der Betriebswirtschaftslehre, Oldenbourg München Wien. Schmitt, B. & Simonson, A. (1997), Marketing aesthetics: The strategic management of brands, identity, and image, Free Press New York. Schürer, A. (1971), Der Einfluss Produktbestimmender Faktoren auf die Gestaltung, Boenecke-Druck Clausthal-Zellerfeld. Wöhe, G.(2002), Einführung in die Allgemeine Betriebswirtschaftslehre, Vahlen München. Papers: Gary Bamossy, Debra L. Scammon, Marilyn Johnston (1983), "A PRELIMINARY INVESTIGATION OF THE RELIABILITY AND VALIDITY OF AN AESTHETIC JUDGMENT TEST", in Advances in Consumer Research Volume 10, eds. Richard P. Bagozzi and Alice M. Tybout, Ann Abor : Association for Consumer Research, Pages: Slide 19

20 Literature Berkowitz, M. (1987), Product shape as a design innovation strategy, Journal of Product Innovation Management, 4(4), ppt Bloch, P.H. (1995), Seeking the ideal form: product design and consumer response, Journal of Marketing, 59(3), pp Creusen, M.E.H. & Schoormans, J.P.L. (2005), The different roles of product appearance in consumer choice, Journal of Product Innovation Management, 22, pp Dawar, N. & Parker, P. (1994), Marketing universals: consumers use of brand name, price, physical appearance, and retailer reputation as signals of product quality, Journal of Marketing, 58(2), pp Garber, L.L. (1995), The package appearance in choice in: Advances in Consumer Research, Kardes, F.R. & Sujan, M. (eds.), Association for Consumer Research Provo, pp Hirschman, E.C. & Holbrook, M.B. (1982), Hedonic consumption: emerging concepts, methods and propositions, Journal of Marketing, 46, pp Loken, B. & Ward, J. (1990), Alternative approaches to understanding the determinants of typicality, Journal of Consumer Research,17(2), pp McCracken, G. (1986), Culture and consumption: A theoretical account of the structure and movement of the cultural meaning of consumer goods, Journal of Consumer Research, 13(1), pp Meyers-Levy, J. & Tybout, A.M. (1989), Schema congruity as a basis for product evaluation, Journal of Consumer Research, 16(1), pp Schoormans, J.P.L. & Robben, H.S.J. (1997)., The effect of new package design on product attention, categorization, and evaluation, Journal of Economic Psychology, 18(2 3), pp Sirgy, M.J. (1982), Self-concept in consumer behavior: A critical review, Journal of Consumer Research, 9(3), pp Veryzer, R.W. (1995), The place of product design and aesthetics in consumer research, Advances in Consumer Research, 22, pp Yamamoto, M. & Lambert, D. R. (1994), The impact of product aesthetics on the evaluation of industrial products, Journal of Product Innovation Management 11(4), pp Slide 20

21 Univ.-Prof. Dr.-Ing. Wolfgang Maass Chair in Information and Service Systems Saarland University, Germany Univ.-Prof. Dr.-Ing. Wolfgang Maass