UNIT 5.

PRODUCTS: GOODS AND SERVICES

PRODUCT CONCEPT: ATTRIBUTES, LEVELS, AND HIERARCHY

PRODUCT: anything that can be offered in a market for attention, acquisition, use, or consumption
that might satisfy a need or a want.

SERVICES: are a form of product that consists of activities, benefits or satisfactions and that is
essentially intangible and does not result in the ownership of anything.

PRODUCTS and SERVICES are becoming more commoditized: companies are now creating and
managing customer experiences with their brands or company.

Remember: positioning maps show consumer perceptions of marketer’s brands versus competing
products on important buying dimensions.

THREE LEVELS OF PRODUCT

At the most basic level, the company

Core asset to strategize around the various layers of a brand/product/service: customer value
perception, differentiation, brand positioning, customer experience management, product
development and marketing communication.

PRODUCT TYPOLOGIES AND LIFE CYCLE MODEL

Products and services fall into two broad classes based on the types of consumers who use them:
consumer products and industrial products. Broadly defined, products also include other
marketable entities such as experiences, organizations, persons, places, and ideas.

1. CONSUMER PRODUCTS

Consumer products are products and services bought by final consumers for personal consumption.

• Convenience products are consumer products and services that the customer usually buys
frequently, immediately, and with a minimum comparison and buying effort (Candy,
bottled water, food,…)
• Shopping products are less frequently purchased consumer products and services that the
customer compares carefully on suitability, quality, price, and style (clothing, furniture,
appliances,…)
 • 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 (high end products)
• Unsought products are consumer products that the consumer does not know about or
knows about but does not normally think of buying (blood donations, funeral services,
insurance).

2. INDUSTRIAL PRODUCTS

Industrial products are those products purchased for further processing or for use in conducting a
business.

• Materials and parts include raw materials and manufactured materials and parts (wood,
screws,…)
• Capital items are industrial products that aid in the buyer’s production or operations
(cranes for lifting heavy materials).
• Supplies and services include operating supplies, repair and maintenance items, and
business services (office stationery like pens and paper (operating supplies), a contract
with a cleaning service (business service), and spare parts for office equipment (repair and
maintenance items).

PRODUCT LIFE CYCLE

SERVICE MARKETING

Services cannot be seen, tasted, felt, heard, or smelled before they are bought. The 7Ps of service
marketing are: Price, place, promotion, product, people, process and physical evidence.
THE MARKETING STRATEGIES FOR SERVICE FIRMS

In addition to traditional marketing strategies, service firms often require additional strategies.

1. SERVICE-PROFIT CHAIN

Service-profit chain links service firm profits with employee and customer satisfaction.

1. Internal service quality

2. INTERNAL MARKETING

Orienting and motivating customer contact employees and supporting service employees to work
as a team to provide customer satisfaction

3. INTERACTIVE MARKETING

Training service employees in the fine art of interacting with customers to satisfy their needs.

Services marketing requires more than just traditional external marketing using the four Ps.

INTANGIBLE ASPECTS: THE BRAND

BRAND EQUITY is the differential effect that knowing the brand name has on customer response to
the product or its marketing.

BRAND VALUE is the total financial value of a brand.

TANGIBLE ASPECTS: PACKAGING AND LABELING

PACKAGING involves designing and producing the container or wrapper for a product. So it’s the
design and protect the product, but is also used as a differentiation tool.

LABELS identify the product or brand, describe attributes and provide promotion. It has to
identify and describe but also help to promote.
PRODUCT PORTFOLIO MANAGEMENT

A product line is a group of products from a company that are closely related because they function
in a similar manner, are sold to similar customer groups, serve similar customer needs, are
marketed through the same type of outlets, or fall within certain price ranges. Product line decision
include:

1. PRODUCT LINE LENGTH – refers to the number of items in the product line.
a. Too long: increase revenue by dropping items
b. Too short: increase revenue by adding items.
2. PRODUCT LINE FILLING – means adding more items within the present range of the line.
3. PRODUCT LINE stretching – means lengthening current lines beyond their current range.

PRODUCT MIX/PRODUCT PORTFOLIO is the set of all product lines that a seller offers for sale:

• LENGTH is the total number of products that a company carries within the line.
• WIDTH is the number of different product lines
• DEPTH is the number of versions offered of each product.
• CONSISTENCY refers to how closely related the products are in end use, production
requirements, distribution channels or other ways.