Page 354 - Marketing Management

SETTING PRODUCT STRATEGY | CHAPTER 12 331

ORDERING EASE Ordering ease refers to how easy it is for the customer to place an order with
the company. Baxter Healthcare supplies hospitals with computer terminals through which they
send orders directly to the firm. Many financial service institutions offer secure online sites to help
customers get information and complete transactions more efficiently.

DELIVERY Delivery refers to how well the product or service is brought to the customer. It includes
speed, accuracy, and care throughout the process. Today’s customers have grown to expect speed:
pizza delivered in one-half hour, eyeglasses made in one hour, cars lubricated in 15 minutes. Many
firms have computerized quick response systems (QRS) that link the information systems of their
suppliers, manufacturing plants, distribution centers, and retailing outlets. Cemex, a giant cement
company based in Mexico, has transformed its business by promising to deliver concrete faster than
pizza. It equips every truck with a global positioning system (GPS) so dispatchers know its real-time
location. If your load is more than 10 minutes late, you get up to a 20 percent discount. 14
INSTALLATION Installation refers to the work done to make a product operational in its
planned location. Ease of installation is a true selling point for buyers of complex products like
heavy equipment and for technology novices.

CUSTOMER TRAINING Customer training helps the customer’s employees use the vendor’s
equipment properly and efficiently. General Electric not only sells and installs expensive X-ray
equipment in hospitals, it also gives extensive training to users. McDonald’s requires its new
franchisees to attend Hamburger University in Oak Brook, Illinois, for two weeks, to learn how to
manage the franchise properly.
CUSTOMER CONSULTING Customer consulting includes data, information systems, and
advice services the seller offers to buyers. Technology firms such as IBM, Oracle, and others have
learned that such consulting is an increasingly essential—and profitable—part of their business.

MAINTENANCE AND REPAIR Maintenance and repair programs help customers keep
purchased products in good working order. Firms such as Hewlett-Packard offer online technical
support, or “e-support,” for customers, who can search an online database for fixes or seek online
help from a technician. Even retailers are getting into the act.

Best Buy As consolidation and competitive pricing among electronics retailers con-
Best Buy tinue, companies are increasingly looking for new ways to stand out in the crowd. That’s why

Best Buy contracted with the Geek Squad, a small residential computer services company, to re-
vamp the chain’s in-store computer repair services. Best Buy used to send PCs to regional repair
facilities, a time-consuming process that contributed to a high degree of consumer dissatisfac-
tion. Now about half of all repairs are made in Best Buy stores. But the real differentiator is the Geek Squad’s
ability to make house calls (at a higher fee) using its signature fleet of VW Beetles. Geek Squad employees
even dress differently for house calls—they wear a distinctive “geek” look instead of the traditional Best Buy
blue they wear at the in-store service centers. 15

RETURNS A nuisance to customers, manufacturers, retailers, and distributors alike, product
returns are also an unavoidable reality of doing business, especially with online purchases.
Although the average return rate for online sales is roughly 5 percent, return and exchange policies
are estimated to serve as a deterrent for one-third to one-half of online buyers. The cost of
processing a return can be two to three times that of sending an outbound shipment, totaling an
average of $30 to $35 for items bought online.
We can think of product returns in two ways: 16

• Controllable returns result from problems or errors by the seller or customer and can mostly be
eliminated with improved handling or storage, better packaging, and improved transportation
and forward logistics by the seller or its supply chain partners.
• Uncontrollable returns result from the need for customers to actually see, try, or experience
products in person to determine suitability and can’t be eliminated by the company in the
short run through any of these means.