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8-1

PRINCIPLES OF MARKETING

Chapter
Chapter 88
Product
Product and
and Services
Services
Strategy
Strategy

What
What is
is aa Product?
Product?

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Anything that can be offered to a market

for attention, acquisition, use or
consumption.
Satisfies a want or a need.
Includes:
Physical Products
Services
Persons
Places
Organizations
Ideas
Combinations of the above

Core
Core
Product
Product

Actual
Actual
Product
Product
Warranty

Design
AfterSale
Service
Features

Core
Core
Benefit
Benefit
or
or
Service
Service

Quality
Level
Delivery
& Credit
Brand
Name

Packaging
Installation
Augmented
Augmented
Product
Product

Levels
Levels of
of Product
Product

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Product
Product Classifications
Classifications
Consumer
Consumer Products
Products
Convenience Products
>
>
>
>

Buy frequently & immediately

Low priced
Many purchase locations
Includes:
Staple goods
Impulse goods
Emergency goods

Specialty Products
>
>
>
>

Special purchase efforts

Unique characteristics
Brand identification
Few purchase locations

Shopping Products
> Buy less frequently
> Gather product
information
> Fewer purchase locations
> Compare for:
Suitability & Quality
Price & Style

Unsought Products
> New innovations
> Products consumers dont
want to think about
> Require much advertising &
personal selling

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Product
Product Classifications
Classifications
Industrial
Industrial Products
Products

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Materials
Materials
and
and
Parts
Parts
Capital
Capital
Items
Items
Supplies
Supplies
and
and
Services
Services

Product
Product Classifications
Classifications
Other
Other Marketable
Marketable Entities
Entities

Marketed to create, maintain, or change the

attitudes or behavior toward the following:
Organizations - Profit (businesses) and
nonprofit (schools and
churches).
Person - Political and sports figures,
entertainers, doctors and lawyers.
Place - Business sites and tourism.
Social - Reduce smoking, clean air,
conservation.

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Product
Product Support
Support Services
Services

Labeling
Labeling

Packaging
Packaging

Branding
Branding

Product
Product Attributes
Attributes

Individual
Individual Product
Product Decisions
Decisions

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Product
Product Attribute
Attribute
Decisions
Decisions

Quality
Quality
Design
Design

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Features
Features

Awareness
Awareness

Credibility
Credibility

Attributes
Attributes

Advantages
of
Brand Names

Identification
Identification

Association
Association

Brand
Equity

Loyalty
Loyalty

Quality
Quality &
& Value
Value

Consistency
Consistency

Brands
Brands

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Line
Line Extensions
Extensions
Brand
Brand Extensions
Extensions
Multibrands
Multibrands

New
Brands
Brand
New Strategy
Brands
Brand
Strategy

Manufacturers
Manufacturers Brand
Brand
Private
Private Brand
Brand
Licensed
Licensed Brand
Brand
Co-branding
Brand
Sponsor
Co-branding
Brand
Sponsor

Selection
Selection

Brand
Name
Protection
Brand Protection
Name Selection
Selection

Major
Major Brand
Brand Decisions
Decisions

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Brand
Brand Strategy
Strategy

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Multibrands

New
Brands

New

New

Line
Extension

Existing

Existing

Brand
Extension

Brand Name

Product Category

Brand
Brand Strategy
Strategy
Line Extension
Existing brand names extended to new
forms, sizes, and flavors of an existing
product category.

Brand Extension
Existing brand names extended to new
product categories.

Multibrands
New brand names introduced in the same
product category.

New Brands
New brand names in new product categories.

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Packaging
Packaging

Sales
Tasks

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Competitive
Advantages
Packaging
Packaging

Product
Safety

Labeling
Labeling
Identifies

Promotes
Describes

Product
Product -- Support
Support Services
Services

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Companies should design its support services to

profitably meet the needs of target customers.
How?
Step 1. Survey customers to determine
satisfaction with current services and any
desired new services.
Step 2. Assess costs of providing desired
services.
Step 3. Develop a package of services to delight
customers and yield profits.

Product
Product Line
Line Decisions
Decisions

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Product
Product Line
Line Length
Length

Number
Number of
of Items
Items in
in the
the Product
Product Line
Line

Stretching

Filling

Lengthen beyond
current range

Lengthen within
current range

Downward

Upward

Depth
Depth -- number
number
of
of versions
versions of
of
each
each product
product

Length
Length -- total
total
number
number of
of items
items
within
within the
the lines
lines

Consistency

Product
Product Mix
Mix -all
all the
the product
product
lines
lines offered
offered

Width
Width -- number
number of
of
different
different product
product
lines
lines

Product
Product Mix
Mix Decisions
Decisions

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Characteristics
Characteristics of
of Services
Services

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Intangibility
Intangibility

Cant be seen, tasted, felt, heard,

or smelled before purchase.

Inseparability
Inseparability

Cant be separated from service

providers.
Quality depends on who provides
them and when, where and how.
Cant be stored for later sale or use.

Variability
Variability
Perishability
Perishability

Greater
GreaterService
Service
Value
Value

Satisfied
Satisfiedand
and
Productive
ProductiveService
Service
Employees
Employees

Satisfied
Satisfiedand
andLoyal
Loyal
Customers
Customers

Health
HealthService
Service
Profits
Profitsand
andGrowth
Growth

Internal
Internal Service
Service Quality
Quality

The
The Service-Quality
Service-Quality Chain
Chain

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Marketing
Marketing Strategies
Strategies for
for Service
Service
Firms
Firms
Managing Service Differentiation
Develop offer, delivery and image with competitive
advantages.

Managing Service Quality

Empower employees
Become Customer obsessed
Develop high service quality standards
Watch service performance closely

Managing Service Productivity

Train current or new employees
Increase quantity by decreasing quality
Utilize technology

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