Chapter 7

CHAPTER 7
PRODUCT
 Product is anything than can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need
 Service – activity, benefit, or satisfaction offered for sale; intangible and does not
result in ownership
Actual product
1. Features
2. Design
3. Packaging
4. Quality level
5. Brand name
Augmented
1. After-sale service
2. Warranty
3. Product support
4. Delivery and credit
Industrial product – bought by individuals and organisations for further processing or for use
in conducting a business
- Materials and parts
o Raw materials (natural and farm products)
o Manufactured materials (component parts and materials)
- Capital items
o Aid in buyers production or operations (installations, accessory equipment)
- Supplies and services
o Operating supplies and repair and maintenance items
o Supplies usually convenience products of industrial field because usually
bought with minimum effort
Consumer products
1. Convenience
a. Purchase frequent
2. Shopping
a. Slightly expensive
b. Think more
3. Specialty
a. Very expensive
b. Cars, designers, properties
4. Unsought
a. Things we don’t plan to buy
b. Medicine, etc
c. Emergencies
ORGANIZATION PRODUCT
 Bought to make money/business

 Raw material
o Require process to use
o Useful to produce another finished product
 Semi-finished
o Business has to process it, not customer
o Instant noodles, selling fruits from orchards
 Major or minor equipment
o Finished form
o Machinery (major), stapler (minor)
 Products that become part of another product
o Batteries
 Products that do not become part of another product
o Phone cases
PRODUCT AND SERVICE DECISIONS
1. Individual product decisions
PRODUCT QUALITY
 Excellence and superiority of product

 Tangible – can be seen, appearance
 Intangible
 1. Experiences
 2. Perception
 3. Knowledge
 Standards differ to each customer
 One common way agencies define quality : find an agency that can certify your
products (ISO)
 Get a quality seal that customers trust
 Total Quality Management (TQM)
o Commitment of an organization to ensure continuous quality improvements
PRODUCT LINE
1. have similar functions and customer groups
2. fall within given price ranges
3. product line filling
a. add more items within present range of line
4. product line stretching
a. lengthens its product line beyond its current range
5. width – number of different product lines the company carries
6. length – total number of items a company carries within its product lines
7. depth – number of versions offered for each product in the line
8. consistency – how closely related the various product lines are in end use,
production requirements, distribution channels
a. company can choose if they want to have a strong reputation in a
single field or in several fields
9. PRODUCT MIX
a. WIDTH
b. LENGTH
c. DEPTH
d. CONSITENCY
FOUR SERVICE CHARACTERISTICS
Intangibility
 To reduce uncertainty, look for signals of service quality

 Conclusions from place, people, price, equipment, communications
Inseparability
 Cannot be separated either provider is machine or people
Variability
Perishability
 Example: doctors still charge patients that did not show up because service value
existed only at that point and disappeared when patient did not show up
SERVICE PROFIT CHAIN

- Links service firm profits with employee and customer satisfaction
 Internal service quality
 Satisfied and productive service employees
 Greater service value
 Satisfied and loyal customers
 Healthy service profits and growth
THREE TYPES OF SERVICES MARKETING
1. Internal marketing
a. Customer-contact employees and supporting service employees to work as a
team
2. Interactive marketing
a. Heavily depends on buyer-seller interaction
MARKETING TASKS FOR SERVICE COMPANIES

1. DIFFERENTIATION – offer, delivery, and image
2. Quality – consistent higher quality
3. Productivity – train, increase quatity but give up quality, use technology
BRAND EQUITY
- Differential effect that knowing brand name has on customer response to the product
and its marketing
- Consumer perception dimensions
o Differentiation
o Relevance
o Knowledge
o Esteem
- Brand value = total financial value of a brand
MAJOR BRAND STRATEGY DECISIONS

1. Brand positioning and selection
a. Establish a vision and mission when positioning
b. Benefits and qualities
c. Easy to pronounce
2. Brand sponsorship
a. National – marketed under manufacturers own name
b. Licensing – created and owned by a reseller of a product or service
c. Co branding – use names and symbols created by other companies or movie
characters or celebrities for a fee
BRAND DEVELOPMENT STRATEGIES
Managing brands
1. Communicate brand’s positioning
a. Spend huge money on advertising to create brand awareness and build
preference, loyalty
2. Manage all brand touch points
a. Advertising
b. Personal experience with brand
c. Word of mouth
d. Social media
e. Mobile apps
3. Train employees to be customer centred
4. Audit the brands strengths and weaknesses
a. Turn up brands that need more support
b. Brand needs to be dropped
c. Brands that need to rebranded or repositioned because of changing customer
preferences or new competitors

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CHAPTER 7

 Bought to make money/business

 Excellence and superiority of product

FOUR SERVICE CHARACTERISTICS

 To reduce uncertainty, look for signals of service quality

 Cannot be separated either provider is machine or people

SERVICE PROFIT CHAIN

MARKETING TASKS FOR SERVICE COMPANIES

MAJOR BRAND STRATEGY DECISIONS

BRAND DEVELOPMENT STRATEGIES

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