Principles of Marketing

Chapter 8- Creating Offerings

Why do we consume?
Looking for broad-strokes here:
We have a need and we want to satisfy them

Offerings
What products and services are designed to
deliver value to the consumer.
Can be to fulfill needs, satisfy wants, or both

Offerings
Product
Tangible good people can buy, sell, and own
The actual singing bowl, mat, and mallet

Offerings
Feature
Characteristic of the offering
What particular pitch (D5 in this case), the materials
used, or the location of its creation

Benefit
When a feature satisfies a need or a want
The benefit I will receive from the singing bowl is both
tangible (relaxation) and intangible (satisfying my
bohemian nature). More on this in a second

Offerings
Price
Amount paid to receive and offerings benefits

Total cost of ownership (TCO)

Total amount someone pays to own, use, and
eventually dispose of a product
TCO for a car is the price of the car plus gas, oil,
insurance, fluids, tires, repairs, etc.

As a consumer, you should always investigate all

costs before purchase
TCO for Birkenstocks versus knockoffs
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Offerings
Service
An action that provides a buyer with an intangible
benefit (you cant hold what you are paying for)
Massage, haircut, gym membership, etc.
This also includes what you receive from a product (like
the bohemian thing from my singing bowl)

Product-dominant Approach to Marketing

In previous eras of marketing (industrial
revolution), the focus was on the product and
the product alone.
The way to be successful was to create better and
cheaper products
Sometimes, this meant making a product someone
needed

Service-Dominant Approach to Marketing

The current approach in marketing
Think of it as the added service component to a
sale and how consumers are integrated in the
process
Integrates the service, product, and price into an
offering
For a high-tech good (high involvement) would you
rather have a higher price with better service, or a lower
price with no service?

Product levels and lines

Technology platform- the core technology
which an offering is built
All* mats are sustainably made in the same
process

Sometimes the technology is designed for

something else
Heart medication/ED drug, poster/post-it notes

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Product level and lines

Product lines
Line depth- a line is either broad (Naked juice,
where there are dozens of flavor and type
combinations) or narrow (Manduka mats, where
there are few variations)
Line extension- new but similar product is added
to the product line (Manduka LiveON)

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Product level and lines

Product lines
Line breadth (sometimes called width) how many
different product lines a company has.
Manduka has mats, towels, and props

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Product Mix
The entire assortment of products that a firm
offers

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Pr
od
uc
t

M
ix

Line Width

Line Depth

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Consumer Offerings
Generally fall into four categories:
Convenience offering
Shopping offering
Specialty offering
Unsought offering

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Convenience Offering
Products and services consumers generally
dont want to put too much effort into shopping
for since they see too little difference between
brands
Bread

This offering is very similar to an impulse

purchase
Only difference is the lack of planning in an
impulse purchase
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Shopping Offering
An offering that a consumer will make an
effort to compare and select a brand.
There will be a large amount of effort expelled
on making a shopping purchase
With this type of purchase, if the store is out of the
product, you will go to a different store to buy the
one you set-out to buy

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Specialty Offering
Highly differentiated offerings with highly
differentiated marketing by the firms
Generally much higher margin
Generally purchased less frequently than
convenience offerings

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Unsought Offerings
Offering that consumers dont want to shop for
until they are forced to (funeral service, towing
services, etc.)

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Types of B2B Offerings

Categorized by how they are used.
Generally fall into the following categories:
Capital equipment offerings
Raw materials offerings
Original equipment manufacturer offering
Maintenance, repair, and operations offering
Facilitating offering

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Capital Equipment Offerings

Equipment purchased and used for more than
one year and depreciated over its useful life
(machinery)
Offerings like this generally are directly
marketed since those people making the
buying decisions are interdepartmental and can
be complex.

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Raw Materials Offerings

Materials that firms offer other firms so that
they can make a product of provide a service
The chairs you are sitting in are made of wood,
metal, cloth, and filler. Each of these
components at one time was a raw material
When the materials, such as the iron, is purchased
and turned into a finished good that isnt a standalone product, such as a thin sheet of iron, it is
called manufactured material.
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Raw Materials Offerings

Since raw materials are generally
commodities, they are sold based on price and
availability.
*caveat: while some materials are a commodity,
they can be different levels of a commodity
making them somewhat distinct (leather, wood,
etc.)

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Original Equipment Manufacturing

Manufacturer or assembler of a final product
OEM components are parts like a hard drive
that are put into the final product (computer)

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Maintenance, repair, and operations

Products and services used to keep a company
functioning (janitorial supplies, repair
hardware, etc.)
Some products can be purchased at a retailer,
but some have to be purchased through a
specialty dealer
Most stores will have below a one inch hex bolt.
Over that, bolts will need to be purchased from a
specialty location
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Facilitating Offerings
Products and services that support a
companys operations but are not part of the
final product it sells
Marketing research, transportation services, office
supplies, computer supplies, etc.
Though these are not part of a final product, they
are certainly important

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Branding, Labeling, and Packaging

Brand- name, picture, design, or symbol used
by a seller to identify its offerings and to
differentiate from competitors

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Branding, Labeling, and Packaging

Branding- set of activities* designed to create
a brand and position in the minds of
consumers.
*Everything is involved with branding

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Branding, Labeling, and Packaging

Would this type of advertisement work for
Apple?

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Branding, Labeling, and Packaging

Brand name
Spoken part of a brands identity
Google, Manduka, Mont Blanc,

Brand Mark symbol of the brand (can be words, symbol, or both)

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Branding, Labeling, and Packaging

Brand extension
Utilizing an existing brand name or brand mark for
a new category
Virgin-> Virgin Mobile

Beneficial when wanting to add credibility to a

new line
Only works if there is a good name behind the brand

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Branding, Labeling, and Packaging

Cannibalization
New offering eating into the sales of the older
offerings
Toyota creating Scion

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Packaging Decision
Package can be a part of the brand itself

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Packaging Decisions
Functions:
Communicate the brand and benefits
Protecting the product from damage and
contamination
Prevent leakage of contents
Present governmentally mandated warnings and
information

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Packaging Decisions
Primary packaging
Single unit* for retail sale

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Packaging Decisions
Secondary packaging
Holds a single wholesale unit of a product
No warnings or information labels, but still
branded

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Packaging Decisions
Tertiary packaging
Designed specifically for shipping and efficient
handling of large quantities

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Managing the Offering

Depending on the size of the offering, there
could be multiple positions in place for
management of an offering

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Managing the Offering

Brand manager
Responsible for all business decisions regarding
offerings within one brand
Can be major undertaking or simple depending on the
offering

Mostly found in consumer products

Product manager
For non-consumer products (since some branding
decisions arent necessary in a B2B setting)
Think: Copy machines or business communications
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Managing the Offering

Category manager
At a business level, responsible for business
decisions within a broad grouping of offerings
P&G J&J

Each brand has its own manager that reports to the

category manager
At the retail level, a category manager is
responsible for multiple brands

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Managing the Offering

Market manager
Responsible for business decisions within a market
(region, market segment, distribution channel)
Regional manager for McCormick spices

In a B2B setting, the market manager will most

likely be a segment of professionals (doctors
offices, etc.)

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Managing the Offering

In this B2B setting, all of the customers in a
particular industry are called a vertical market
and are generally overseen by a vertical
market manager
This is beneficial since: most buying needs and
processes are going to be similar in an industry and
channels of communication are going to be the
same within an industry (most doctors offices buy
products through a rep)
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For Next Time

We will have a guest presentation, please be
attentive and respectful. I am a vengeful god
when irritated.

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