Product and Services
November 11, 2023
Offering = Product + service - Price
Convenience offerings - require wider distribution and visibility (ex: soft drinks, gum,
newspapers)
Associated with frequent purchases
Shopping offerings - necessary to differentiate (ex: furniture, clothing, appliances)
Associated with goods that are compared on suitability, quality, price and style
Speciality offerings - maintain exclusivity (ex: luxury brands)
Associated with unique characteristics or brand identification which sufficient buyers are willing
to make a special purchasing effort and do not require much comparison
Unsought offerings - reminder advert or personal selling (ex: insurance, smoke detectors,
cemetary plots)
Associated with things the consumer doesn’t know or doesn’t normally think of buying
Types of Business (B2B) Offerings
1. Capital equipment offerings
2. Raw material offerings
3. Original equipment manufacturer (OEM) offerings
Brand - Name, picture, design, symbol or combination of those
Branding - Set of activities designed to create a brand and position it in minds of consumers
Brand mark - Symbol of a brand like the Nike swoosh
Developing an Idea
1. Idea Generation - Basic idea is created and described (lead users and research)
2. Idea Screening - Cost, profits, potential sales are calculated at different price levels
3. Feature Specification - Detailed specifications for the product developed including
features and pricing
4. Development - Actual offering is designed
5. Testing - Test (first in lab then with customers) whether the product is actually good for
consumers. Alpha, and beta testing
6. Launch (Commercialization) - Offering is made available to customers/Rolling launch
go to limited markets first
7. Evaluation - Careful evaluation and monitoring of the offering
What can I do to have high demand across the years?
Demand is determined by: Target Market, Offering, Marketing Mix
Service - Is a performance/act, is intangible, not a physical product (cannot be owned)
Intangible
● Strategy - Tangibilize the intangible aspects of service to reduce perceived risks
● Place - Clean, high-quality
● People - Professional, well-dressed, attentive
● Promotion - Professional photos with high-quality paper
Inseparable
● Both the service provider and the customer must be present when the service is
performed (ex: barber can’t perform the haircut without the customer present)
Variable
● Increase standardization in service delivery
○ Invest in good hiring and training procedures
○ Standardize service performance processes
○ Measure customer satisfaction to ensure consistency
Perishable
● Increase demand with price reductions or provide differential pricing
○ Airlines offer cheaper tickets during “off-peak” season
○ Restaurants providing “happy hours”
● Increase demand by providing product incentives or new services during off-peak period
○ Subway breakfast options
○ McDonald’s breakfast
● Optimize supply by
○ Hiring part-time employees to deal with fluctuations in demand
○ Encouraging customers to participate in service delivery
Metric 7: Break-Even