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MARKETING STRATEGY

12

Setting Product Strategy

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Product

Anything that can be offered to a market to

satisfy a want or need.

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Figure 12.2 Five Product Levels

Core benefit: service or benefit the customer is buying(hotel- rest & sleep)

Basic product: what is needed to offer the service or

benefit (room in a hotel, package, brand) Expected product: attributes and conditions buyers

expect to get (quiet, clean, tasty food)

Augmented product: exceeds customer expectations

(image) Potential product: possible augmentations the product

might offer in the future

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Product Classification Schemes

Non durable: tangible goods normally consumedin one or few uses consumed quickly andpurchased frequently (beer, soap). Strategy increase availability, charge small mark-up,advertize heavily.

Durability: tangible goods that normally survivesmany uses (clothing, appliances)

Tangibility

Use

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Consumer Goods Classification

Convenience

Shopping

Specialty

Unsought

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What Is a Product?Product and Service

Classi f icat ions

Convenience productsare consumer products

and services that the customer usually buys

frequently, immediately, and with a minimumcomparison and buying effort

Newspapers

Candy

Fast food

Soaps

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What Is a Product?Product and Service

Classi f icat ions

Shopping productsare consumer products

and services that the customer compares

carefully on suitability, quality, price, andstyle

Furniture

Cars

Appliances

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What Is a Product?Product and Service

Classi f icat ions

Specialty productsare consumer products andservices with unique characteristics or brandidentification for which a significant group ofbuyers is willing to make a special purchaseeffort

Medical services

Designer clothes High-end electronics (stereo components,

photographic equipment)

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What Is a Product?Product and Service

Classi f icat ions

Unsought productsare consumer products that

the consumer does not know about or knows

about but does not normally think of buying Life insurance

Funeral services

Blood donations Smoke detectors

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Industrial Goods Classification

Industrial productsare productspurchased for further processing or for use

in conducting a business

Materials and parts

Capital items Supplies/business services

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Product Differentiation

Product form

Features

Performance

Conformance

Durability

Reliability Reparability

Style

Design

Ordering ease

Delivery

Installation

Customer training Customer consulting

Maintenance

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Services Differentiation

Ordering Ease: how easy is for a customer to place anorder

Delivery: how well the product or a service is delivered

speed, accuracy, care attending Installation: work done to make the product operational

in its planned location

Customer training: training the customers

Customer consulting: data, info, advices, that the seller

offers Maintenance & repair: service program for helping

customers keep purchased products in good workingorder

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Packaging: The 5thP

All the activities of designing and producing

the container for a product.

Three levels of materials: Primary package: bottle

Secondary package: carton

Shipping package: carton containing

dozen of boxes

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Packaging has been influenced by:

Self-service: increasing number of products.Tasks: attract attention, describe features,create confidence, make positive impressions

Consumer affluence: consumers are willing topay for convenience, appearance, prestige ofbetter packages

Company and brand image: recognition of brand

or company Innovation opportunity: unique materials and

features for easy-to-open and close pack

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Package objectives

Identify the brand

Convey descriptive and persuasive

information Facilitate product transportation and

protection

Assist at home storageAid product consumption

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Functions of Labels

Labelidentifies the product or brand,

describes attributes, and provides

promotion Identifies

Describes: who made it, where it was

made, when, and what it contains

Promotes: attractive graphics

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Warranties and Guarantees

Formal statements of expected product

performance by the manufacturer repair,

replacement, or refund

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Ind ividual Product and Service

Decis ions

Brand is the name, term, sign, or design,

or a combination of these, that identifies

the maker or seller of a product or service

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Services Marketing

Nature and Character istics of a Service

Intangibility

Inseparability

Variability

Perishability

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Services Marketing

Nature and Character istics of a Service

Intangibility refers to the fact that services cannotbe seen, tasted, felt, heard, or smelled before

they are purchased

Inseparabilityrefers to the fact that services

cannot be separated from their providers

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Services Marketing

Nature and Character istics of a Service

Variability refers to the fact that service qualitydepends on who provides it as well as when,

where, and how it is provided

Perishabilityrefers to the fact that services

cannot be stored for later sale or use