MARKETING STRATEGY

12Setting 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 consumed in one or few uses – consumed quickly and purchased frequently (beer, soap). Strategy – increase availability, charge small mark-up, advertize heavily.

Durability: tangible goods that normally survives many 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 Classifications

Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort

• Newspapers• Candy• Fast food• Soaps

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What Is a Product? Product and Service Classifications

Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style

• Furniture• Cars• Appliances

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What Is a Product? Product and Service Classifications

Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort

• Medical services• Designer clothes• High-end electronics (stereo components,

photographic equipment)

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What Is a Product? Product and Service Classifications

Unsought products are 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 products are products purchased 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 an order

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 working order

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Packaging: The 5th P

All the activities of designing and producingthe 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 to pay for convenience, appearance, prestige of better 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 storage Aid product consumption

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Functions of Labels

Label identifies 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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Individual Product and Service Decisions 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 Characteristics of a Service

• Intangibility• Inseparability• Variability• Perishability

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Services Marketing

Nature and Characteristics of a Service

Intangibility refers to the fact that services cannot be seen, tasted, felt, heard, or smelled before they are purchased

Inseparability refers to the fact that services cannot be separated from their providers

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Services Marketing

Nature and Characteristics of a Service

Variability refers to the fact that service quality depends on who provides it as well as when, where, and how it is provided

Perishability refers to the fact that services cannot be stored for later sale or use