CHAPTER ELEVEN
PRODUCT STRATEGIES
WHAT IS A PRODUCT?
n
Product: bundle of physical, service, and
symbolic attributes designed to enhance
buyers’ want satisfaction
WHAT IS A SERVICE?
n
n
Service: intangible task that satisfies
consumer or business user needs
Goods-services continuum: device that
helps marketers to visualize the
differences and similarities between goods
and services
Figure
-Services Continuum
Figure 11.1:
11.1: Goods
Goods-Services
Continuum
CLASSIFYING GOODS AND
SERVICES FOR CONSUMER AND
BUSINESS MARKETS
n
n
Consumer products: products destined
for use by ultimate consumers
Business (or B2B) products: those that
contribute directly or indirectly to the
output of other products for resale
– Also called industrial or organizational
products
Figure
Figure 11.5:
11.5:
Classification
Classification
of
of Consumer
Consumer
Products
Products
Types of Consumer Products
n
Unsought product: good
or service marketed to
consumers who may not
yet recognized in the need
for it
Types of Consumer
Products
n
Convenience
product: good or
service that
consumers want to
purchase frequently,
immediately, and
with minimal effort
Types of Consumer
Products
n
Shopping product:
good or service
purchased only after
the customer
compares competing
offerings from
competing vendors on
such characteristics as
price, quality, style,
and color
Types of Consumer
Products
n
Specialty product:
good or service
with unique
characteristics that
cause the buyer to
value it and make a
special effort to
obtain it
Figure
Figure 11.7:
11.7:
Classification
Classification
of
of Business
Business
Products
Products
Types of Business Products
n Installation:
major capital
investment by a business buyer that
typically involves expensive and
relatively long-lived products, such
as a new factory or piece of heavy
machinery
Types of Business Products
n
Accessory equipment: capital product,
usually less expensive and shorter-lived
that insulation, such as a laptop computer
– Industrial distributor: wholesaling
marketing intermediary that handles
purchases of small accessory equipment
and operating supplies
Types of Business Products
n Component
parts and materials:
finished business products that
become parts of buying firms’
final products, such as spark plugs
for new cars
Types of Business Products
n Raw material:
business product,
such as a farm product (wheat,
cotton, soybeans) or natural product
(coal, lumber, iron ore) that become
part of a final product
Types of Business Products
n
n
n
Supplies: products that represent regular
expenses necessary to carry out a firm’s daily
operations but are not part of the final
product
Supplies are sometimes called MRO items
MRO item: part of business supplies
categorized as maintenance items, repair
items, or operating supplies such as light
bulbs, nuts and bolts used in repairing
equipment, or pencils
Types of Business Products
n
Business service: intangible product
purchased to facilitate a firm’s
production and operating processes
such as financial services, leasing of
vehicles, legal advice and consulting
DEVELOPMENT OF
PRODUCT LINES
n
Product Line: a
series of related
products
An Ad Showing the
Breadth of Audiovox’s
Product Line
THE PRODUCT LIFE
CYCLE
n
Product life cycle: progression of
products through introduction, growth,
maturity, and decline stages
Figure
Figure 11.13:
11.13: Overlapping
Overlapping Life
Life Cycles
Cycles for
for Two
Two
Products
Products
STRATEGIC IMPLICATIONS OF THE
PRODUCT LIFE CYCLE CONCEPT
n
n
Marketers usually try to expand each stage of the
life cycle for their products as long as possible
Product life cycles can stretch indefinitely as a
result of decisions designed to:
– Increase the frequency of use by current customers
(Increase full-time students at UAH)
– Increase the number of users for the product (Hush
Puppies attracting younger customers)
– Find new uses (Baking Soda, Wax Paper)
– Change package sizes, labels, or product quality
(Pepto Bismol introduced take along tablets for away
from home use
STRATEGIC IMPLICATIONS OF THE
PRODUCT LIFE CYCLE CONCEPT
n
Product deletion
decisions
n
n
n
Product lines must
sometimes be pruned and
marginal products
eliminated
This decision is typically
faced during the late
maturity and early
declined stages of the
product life cycle
An unprofitable item may
be continued in order to
provide a complete line for
customers