Lesson 4
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Chapter 12, 13 & 15
Product
Course : MKT 301
Instructor: MD Touhidul Islam
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A product is…
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Anything that can satisfy a want or need, e.g.
Ideas
Physical goods
Events
Properties
Information
Persons
Places
What is a Service?
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🙢 A service is any act of performance that
one party can offer another that is
essentially intangible and does not
result in the ownership of anything; its
production may or may not be tied to a
physical product.
Product VS Service
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Tangibility
Ownership
Production & Delivery
Evaluation
Perishability
A product has five product levels…
Example: Hotel
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🙢 Core benefit- what customer really buys
🙢 Hotel – “rest and sleep”
🙢 Basic product : turning core benefit into basic benefit
🙢 room – bed, bathroom, etc.
🙢 Expected product : A set of attributes customers expect when
they purchase the product
🙢 Clean room, fresh towel, etc.
🙢 Augmented product- what exceed expectation?
🙢 Special service offered, 10 star service
🙢 any product variations, extra features, or services that help
differentiate the product from its competitors.
🙢 Potential product- all possible augmentations and
transformation of the product in the future
- to continue to surprise and delight customers
WARM COAT
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🙢 Core benefit - protect you from the cold and the rain
🙢 Basic product - fit, material, rain repellent ability,
high-quality fasteners, etc.
🙢 Expected product - should be really warm and protect
from the weather and the wind and be comfortable when
riding a bicycle.
🙢 Augmented product - Is that warm coat in style, its
colour trendy and made by a well-known fashion brand?
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🙢 Potential product - a warm coat that is made of a fabric
that is as thin as paper and therefore light as a feather
that allows rain to automatically slide down.
How to Classify Product Using
Durability
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🙢 Nondurable goods – e.g. toothpaste, soap
▪ tangible goods, consumed quickly, purchased quickly
▪ Strategy: more location, not pricey, frequent ad to
induce trial and product/brand preference
🙢 Durable goods – e.g. refrigerators
▪ Tangible goods, durable for many years/uses, reliable
▪ Strategy: personal selling, more service/guarantees,
higher margin
Product and Service
Classifications
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Consumer
Industrial
Consumer products
🙢 Consumer products are
products and services for
personal consumption.
Classifications:
❖ Convenience products
❖ Shopping products
❖ Specialty product
❖ Unsought products
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Industrial products
🙢 Industrial products are
products purchased for
further processing or for
use in conducting a
business.
Classification:
❖ Materials and parts
❖ Capital ( Long time)
❖ Supplies and services
(short time)
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A product mix is the set of all products and items a
particular seller offers to sell.
Every product mix has a certain width, length, depth and
consistency
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When addition of a new
product is justified in a
product line?
5 product-mix pricing strategies used in the
marketplace are…
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🙢 product-line- pricing-different price for different product
line
🙢 optional-feature pricing-based on customer’s choice
🙢 captive-product pricing- products which have to be
necessarily used with an accompanying product
🙢 by-product pricing-Pricing low–value by-products or
services to get rid of them
🙢 product-bundling pricing-charge less the bundle than if
the item is purchased separately
Packaging, labeling, warranties and guarantees
within product: What are they?
LABELING: Tag or graphic
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PACKAGING: Activities
design as part of product’s
involved in designing and
producing the container of
the product
package.
Identify, promote, describe
& grading
WARRANTIES: Specific or
general promises (written)
by manufacturer of actions
to be taken in related to
product’s performance
GUARANTIES: Informal
statements by
manufacturer of what to
expect from its product
performance
Factors contributing to the use of packaging as
a marketing tool…
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Self-service:
Must attract
attention,
describe
product,
creates
confidence
Innovation
Opportunity:
innovative
packaging-res
alable spouts
and openings
Consumer
affluence:
Willing to pay
more for
convenience,
appearance etc
Company and
brand image:
Instant
recognition of
company and
brand
The functions of packaging
To identify the brand
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To convey information
To protect product
To facilitate product transportation
To assist at-home storage
To aid product consumption
New-product Options
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🙢 Make or buy
🙢 Company can buy other companies
🙢 Acquire patents from other companies
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New-product failure: Factors That Limit
New Product Development
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Shortage of important ideas in certain areas
Fragmented markets
Social, economic, and governmental constraints
Cost of development
Capital shortages
Shorter required development time
Poor launch timing
Shorter product life cycles
Organizational support
Product Life Cycles
🙢 Introduction—A period of slow sales growth as the
product is introduced in the market. Profits are
nonexistent because of the heavy expenses of
product introduction.
🙢 Growth—A period of rapid market acceptance and
substantial profit improvement.
🙢 Maturity—A slowdown in sales growth because the
product has achieved acceptance by most potential
buyers. Profits stabilize or decline because of
increased competition.
🙢 Decline—Sales show a downward drift and profits
erode.
Sales-Cost-Profit-Customer-Competitors
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Improving Service Quality
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Listening
Reliability: quality
Basic service
Service design: arrange information's
Recovery: solve problems
Surprising customers; in meeting
Fair play: to customers & employees
Teamwork
Employee research: conduct a research
Servant leadership
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Gaps that Cause Unsuccessful Service Delivery
🙢 Gap between consumer expectation and
management perception
🙢 Gap between management perception and
service-quality specifications
🙢 Gap between service-quality specifications and
service delivery
🙢 Gap between service delivery and external
communications
🙢 Gap between perceived service and expected service
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The service recovery paradox (SRP)is a phenomenon in
customer service where a customer's satisfaction and
loyalty can increase after a company successfully
addresses a service failure, exceeding their satisfaction
level before the failure occurred.
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Why it happens:
🙢 Opportunity to demonstrate care
🙢 Exceeding expectations
🙢 Psychological impact
Issues Arising
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🙢 There are so many product offers in the
marketplace. However, not all product offers
are branded, have proper labels, even offer
warranty or guarantee of some sort. And yet,
they still flourish and succeed. So, is product
element really important when a marketer
develops his marketing mix strategy? Why?
Can it be eliminated? Why?
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