Particularities in the Marketing Mix for Service Operations - Case Study Example

Product Products must be able to provide benefits which enhance the situation of users (Baker & Saren, 2010). In our case we will consider Levi's® jeans for women. Levi's® jeans are the original, authentic jeans produced by Levi Strauss & Co. The products has over the time continued to define Jeanswear providing a wide range of products which vary from quintessential classics such as Levi's® 501® Original jean, to favorite fits and styles in the Red Tab™ and premium collections. The photo below illustrates Red Tab™ for women. http://www.labdailyblog.com/wp-content/uploads/2011/01/Levis-Red-Tab-Women-65-euros.jpg Levi's® jeans for women is one of the foremost revenue earners for Levi company. Levi's® jeans allows women around the globe to express their personal style. The firm values innovation and as such its products are constantly evolving to meet the consumers needs (Belohlavek, 2008). The newest product for women is the Levi’s® Curve ID denim line. The picture below illustrates women in Levi’s® Curve ID denim. http://www.fashiontrendsetter.com/article_images/2010/Levis-Curve-ID-3-Girls.jpg This product has been touted to be one of the Levi’s revolutionary products. It is based on the shape rather than the size. Thus, the product allows women to find apparel that is matches her shape. The product has won the hearts of over a million women since its launch in 2010. The brand celebrates women and their shape. Levi’s® jeans emphasize quality, style and function in their production. Even though Levi's® jeans has been one of the most imitated clothing products it stands out as a specialty product among women who love style, quality and function for their Jeanswear. Women who fall under this category search extensively and are often reluctant to accept substitutes for Levi brand. This product is chosen for consideration because of its history of valuing quality in all its products and its success in the market (Haberer, 2010). Levi's® jeans for women is valued because of the wide range of products in this category. In addition, they are valued because of its emphasis on quality, style and function which is the main attributes valued by women when buying clothing products. Products typically have three levels: core product, the actual product and the augmented product. The core product is what the consumer actually buys in terms of benefits. For the case of Levi's® jeans for women, consumers buy the value that the apparel delivers. Thus the product is meant for value conscious consumers. The actual product is built around the actual product. It consists of the brand name, features, packaging, parts and styling. These components are the ones which provide the product the benefits it confers to consumers and as such are sought at the core level. In the case of Levi's® jeans for women, quality, style and function are emphasized in the production in order to deliver value sought at the core level. In addition Levi's® brand is a unique and effective brand that is associated with quality and hence it also helps add value to the Levi's® jeans for women that is sough at the core level. Furthermore, the brand has a long history of quality and its packaging reflects this since it is re-designed in store packaging to add value that is sought during the core level. The in-store re-design help to differentiate Levi's® jeans for women from other clothing apparel that traditionally packaged in standard shopping bag. This gives Levi's® jeans for women a unique, functional and memorable form that add to core and actual component of the apparel. The augmented components consist of additional services and benefits that surround the core and actual component of the product. This may include things such as technical assistance in operating product and service agreements. The store that sell Levi's® jeans for women have great customer service that helps customers with choice of the right apparel based on the shape of the consumer. The high income target market, value quality over pricing and thus to be able to win over this market segment, Levi's® jeans for women emphasises quality of products produced. As such the firm produces offer Levi's® jeans brands for consumers who seek high quality, affordable and fashionable jeans wear from a trustworthy company. On the other hand, low income consumers value price over quality. However, Levi's® jeans for women try to balance quality and pricing of products targeting this segment at a relatively lower cost to satisfy the needs of this market segment. Just like living organisms, products go through various stages of development synonymous to birth, growth, maturity, decline and death of living organisms. The product life cycle passes through various phases, many professional disciplines involved and many skills, processes and tools are required. Product life cycle concerns the product life in the market pertaining business sales and costs measures. For a product to have a life cycle then it must fulfill the following. First the life of a product is limited. Second, the product goes through various distinct stages with associated challenges, problems and opportunities to the seller. Third, depended on the life cycle of the product, its profits rise and fall. Finally, varied marketing, manufacturing, and human resources, financial and purchasing strategies for products are required at each stage of their life cycle. The products pass through market introduction stage, growth stage, maturity stage, saturation, and decline stage. The graph below illustrates product life cycle. http://tutor2u.net/business/images/product_life_cycle.gif The market introduction stage is characterized by the following. The costs of the product are usually high, their sales are low, the products have no or little competition, the demand for the product has to be created, the customers need to be urged to give a try for the product and no profits are made at this stage. Growth stage is characterized with reduced costs as a result of economies of scale, there is an increase in sales volume, there is increased public awareness, and competition start increasing and prices decrease due to increased competition. Maturity stage is characterized with lower costs resulting from increased production volumes and the effects of experience curve. The market reaches saturation and sales volumes are at their peak at this stage. The stage is also characterized with increased competitors and drop in prices as a result of increased number of competing products (Prenzel, 2010). There is emphasis on product diversification and product differentiation at this stage. This is aimed at maintaining or increasing market share. The final characteristic at maturity stage is that the industrial profits for the product go down. Saturation and decline stage is characterized with costs of products becoming counter optimal, declining or stabilization of sales volumes and diminishing prices and profits. This stage is also characterized with increased profit challenges than increased sales. From the analysis of Levi's® jeans for women it is apparent that the products available are at various stages of product life cycle in the different markets that it is sold. For instance, in United states of America and Canada some of the Levi's® jeans for women are at maturity stage while others are at growth stage. For instance, Levi’s® Curve ID denim line is at growth stage while Levi's® 501® Original jean is at maturity stage. On the other hand in Asia Pacific region including Australia some of the products are at growth stage while others are at introductory stage. For example the Levi's® 501® Original jean is at growth stage while the Levi’s® Curve ID denim is at introductory stage. Price Price is the only flexible element of marketing mix which can be adjusted at any time. Different ways are used to price products and services. These include premium pricing, penetration pricing, economy pricing, price skimming, psychological pricing, product line pricing, optional product pricing, captive product pricing and product bundle pricing. The strategy chosen is dependent on factors illustrated on the chart below. Levi Strauss & Co. employs different pricing strategies including premium pricing, penetration pricing, product line pricing and prestige pricing strategies. Premium pricing uses a high price because of the uniqueness of the product or the service. It is mainly used to price products when there is a substantial existence of competitive advantage. It is commonly used in pricing luxury products. The Levi Strauss & Co. uses this strategy to price Levi’s® Curve ID denim line of products that emphasizes the shape of the client rather than the size. Penetration pricing involves setting lower prices for goods and services in order to gain market share. The prices are increased ones the firm penetrates the market. this strategy is being employed to introduce Levi’s® Curve ID denim line of products in Asia Pacific region. Even though, premium pricing is used to price Levi’s® Curve ID denim line of products, they also follow product line pricing strategy. This is used where there is a range of products or services on offer and pricing reflect the benefits of parts of the range (Wenderoth, 2009). The product pricing of Levi’s® Curve ID denim line of products is illustrated in the table below. Types of products Unit Price Jegging (Portia) $119.95 501 jeans for women (Patched up) $169.95 Jegging with Zip (Black Rinse) $129.95 Chino (Camel) $129.95 Chino (Dark Olive) $129.95 Flare Demi Curve (Dark Flare) $129.95 Flare Demi Curve (Mid Flare) $129.95 Flare Demi Curve (Medieval Indigo) $149.95 Flare Demi Curve (Rinse) $119.95 Prestige pricing strategy is common in markets where quality is emphasized over price. As shown in the table above the pricing of 501 jeans for women (Patched up) is relatively higher than other apparel. This is based on the perceived quality of this product and as such prestige pricing is used to price it in order to limit the number of people acquiring this apparel. The photo below illustrates women’s levi jeans for models that uses prestige pricing. Price: $218 It is apparent that the strategies employed to price Levi’s® jeans for women is consistent with product lifecycle and the product, promotion and place. Reference Baker, M., & Saren, M. (2010). Marketing Theory: A Student Text, 2nd Ed. New York: SAGE Publications Ltd. Belohlavek, P. (2008). Unicist Marketing Mix. London: Blue Eagle Group Haberer, J. (2010). Disneyland International Marketing Mix: International Marketing Mix of Disneyland Hong Kong. London: GRIN Verlag. Haberer, J. (2010). Disneyland International Marketing Mix: International Marketing Mix of Disneyland Hong Kong. London: GRIN Verlag. Levi’s. (2011). Home. Retrieved from http://us.levi.com/home/index.jsp Prenzel, I. (2010). Applicability of Mobile Marketing in the Marketing Mix of Trade Fair Organizers. London: GRIN Verlag. Wenderoth, M. (2009). Particularities in the Marketing Mix for Service Operations. London: GRIN Verlag. Read More