MARKETING STRATEGY

12
Setting Product Strategy

12-2
Product
Anything that can be offered to a market to
satisfy a want or need.
12-3
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
12-4
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
12-5
Consumer Goods Classification
Convenience
Shopping
Specialty
Unsought
12-6

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

12-7
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

12-8
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)

12-9
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

12-10
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
12-11
Product Differentiation
Product form
Features
Performance
Conformance
Durability
Reliability
Reparability
Style
Design
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance
12-12
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
12-13
Packaging: The 5
th
P
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
12-14
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
12-15
Package objectives
Identify the brand
Convey descriptive and persuasive
information
Facilitate product transportation and
protection
Assist at home storage
Aid product consumption
12-16
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

12-17
Warranties and Guarantees
Formal statements of expected product
performance by the manufacturer repair,
replacement, or refund
12-18
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
12-19
Services Marketing
Nature and Characteristics of a Service

Intangibility
Inseparability
Variability
Perishability
12-20
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
12-21
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