| Products, Services, and Brands: Building Customer Value 257

Chapter 8 | Products, Services, and Brands: Building Customer Value 257

Adding 6,000 rooms and 12,000 jobs to the Las Vegas Strip has view. It found through its research that, especially during hard met with mixed reactions. Some speculate that this game-changing

economic times, people wanted to know that the same Vegas property will put an exclamation point on Las Vegas’ image and

they’ve known and loved is still there.

provide additional oomph in a time of crisis. “History has shown that new properties increase visitation across the board,” said

Questions for Discussion

Ralenkotter. But others see the introduction of such a large prop- erty as hazardous to recovery. “Will it cannibalize other proper-

1. Given all the changes in the branding strategy for Las Vegas ties?” asked Tony Henthorne, professor and chair of tourism and

over the years, has the Vegas brand had a consistent meaning convention administration at the University of Nevada at Las Vegas.

to consumers? Is this a benefit or a detriment to the city as it “Probably so, within a short-term period.”

moves forward?

2. What is Las Vegas selling? What are visitors really buying? Las Vegas Strip, there’s an air of caution. Jim Murren, CEO for MGM

But even as such major signs of life are sprouting up along the

Discuss these questions in terms of the core benefit, actual believes his company is not yet out of the woods. When asked if he

product, and augmented product levels. thought CityCenter was in the clear, he responded emphatically.

3. Will the most recent efforts by the LVCVA continue to work? “Absolutely not. We’re not declaring victory at all. We are a year or

Why or why not?

two away from even having a chance to consider that.” That is probably the best attitude to take. After all, the Las Vegas Mono-

4. What recommendations would you make to LVCVA managers rail just filed for bankruptcy. Two other major projects that were ex-

for Las Vegas’ future?

pected to boost the Vegas economy have been shelved. Cheap (i.e., inexpensive) rooms are still available on the Las Vegas Strip.

Sources: Jeff Delong, “After a Down Year, Vegas Hoping for a Rebound,” And although tourist visits are on the rise, even if Las Vegas makes

USA Today, May 21, 2010, p. 2A; Nancy Trejos, “Las Vegas Bets the Future its projections for 2010, it will still be down from its 2007 peak.

on a Game-Changing New Hotel Complex,” Washington Post, January 31, Las Vegas has certainly had its share of ups and downs. Times

2010, p. F01; Tamara Audi, “Vegas Plans a New Push to Attract More Peo- may be brightening now. But the city will face many challenges in

ple,” Wall Street Journal, January 7, 2008, p. B2; John King, “Luck Run- the months and years to come. Goldman analyst Kent expresses ning Low in Las Vegas—Will It Turn Around,” CNN.com, May 22, 2009, accessed at www.cnn.com; Tamara Audi, “Vegas Tries Luck with Old Slogan,”

confidence in the brand. “For the long-term, we believe in Vegas Wall Street Journal, May 13, 2009, p. B5; Damon Hodge, “Tourism Chief and its ability to transform itself and attract more customers.” R&R

Aims to Continue Vegas’ Hot Streak,” Travel Weekly, February 12, 2007, Partners, the ad agency handling the Las Vegas marketing cam-

p. 64; and Tamara Audi, “Las Vegas Touts Its Affordability,” Wall Street paigns, made an important discovery that supports Kent’s point of

Journal, February 4, 2009, p. B5.

Part 1: Defining Marketing and the Marketing Process (Chapters 1–2) Part 2: Understanding the Marketplace and Consumers (Chapters 3–6) Part 3: Designing a Customer-Driven Strategy and Mix (Chapters 7–17) Part 4: Extending Marketing (Chapters 18–20)

9 learned how marketers man- product discussion by looking at two additional considerations: social

New Product Development and

Product Life-Cycle Strategies

Chapter Preview ing different marketing strategies and tactics. Finally, we wrap up our

In the previous chapter, you

age and develop products and brands. In this chapter, we examine two responsibility in product decisions and international product and ser- additional product topics: developing new products and managing

vices marketing.

products through their life cycles. New products are the lifeblood of an For openers, consider Google, one of the world’s most innovative organization. However, new-product development is risky, and many

companies. Google seems to come up with an almost unending flow new products fail. So, the first part of this chapter lays out a process

of knock-your-eye-out new technologies and services. If it has to do for finding and growing successful new products. Once introduced,

with finding, refining, or using information, there’s probably an inno- marketers want their products to enjoy long and happy lives. In the sec-

vative Google solution for it. At Google, innovation isn’t just a process; ond part of this chapter, you’ll see that every product passes through

it’s in the very spirit of the place.

several life-cycle stages, and each stage poses new challenges requir-

Google: New-Product Innovation at the Speed of Light

G is also spectacularly successful. Despite formidable competition look and people who wanted tons of information there—

oogle is wildly innovative. It recently topped Fast scribes the lightning-quick development of iGoogle, Google’s Company magazine’s list of the world’s most inno-

customizable home page:

vative companies, and it regularly ranks among It was clear to Google that there were two groups [of everyone else’s top two or three innovators. Google Google users]: people who loved the site’s clean, classic

from giants like Microsoft and Yahoo!, Google’s share in its core business—online search—stands at a decisive 66 percent,

e-mail, news, local weather. [For those who wanted a fuller home page,] iGoogle started out with me and three engi-

2.5 times the combined market shares of its two closest competi- tors. The company also captures 86 percent of the mobile-search

neers. I was 22, and I thought, “This is awesome.” Six weeks later, we launched the first version in May. The hap-

market and 60 percent of all search-related advertising revenues. But Google has grown to become much more than just an

piness metrics were good, there was healthy growth, and by September, we had [iGoogle fully operational with] a

Internet search and advertising company. Google’s mission is “to organize the world’s information and make it universally ac-

link on Google.com.

cessible and useful.” In Google’s view, information is a kind of

Such fast-paced in-