Shaping the Market Offerings
Prof. Suvendu Pratihari
suvendupratihari@gmail.com
Prof. Suvendu Kr. Pratihari
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Shaping the Market Offerings
Product
characteristics and classifications
Product Levels: The Customer Value Hierarchy
Prof. Suvendu Kr. Pratihari
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What is a Product?
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It is a need Satisfying entity.
More than a physical object.
It is a complex cluster of value satisfaction i.e. it is the
total package of benefits the customer receives when he
buy and use it.
Prof. Suvendu Kr. Pratihari
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Product Levels
Core Product
Actual/Basic
Product
Expected
Product
Augmented
Product
Potential
Product
Prof. Suvendu Kr. Pratihari
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Core Product:
It is the core customer value, which addresses the question
“what is the buyer really buying?” It is also the unbranded and
undifferentiated commodity like rice, flour or cloth. It carries
the problem solving benefits of that consumer seek.
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Exp: A hotel guest is buying “Rest and Sleep”.
Exp: The purchaser of a drill machine is buying “Holes”
Exp: In the factory we produce cosmetics, in the store, we sell hope.
Actual/Basic Product:
At this level, the marketer turn the core benefits in to actual /
basic product. Thus a hotel room includes a bed, bathroom,
towels, desk, dressing table and a TV.
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The objective of this differentiation is to win over the customers.
Firms seek higher level of differentiation through customizing and
augmenting the product.
Prof. Suvendu Kr. Pratihari
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The Expected Product:
At the third level, the marketer sets different attributes that the
buyer normally expect when they purchase these products.
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Exp: Hotel room includes a clean bed, bathroom, fresh towel, working
lamp, 24hr. Room service etc.
Augmented Product:
It is the result of voluntary improvement brought by the
manufacturer in order to enhance the value of the product by
adding extra features or functions. Here the firm goes beyond
the expectation of the customer/consumer.
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Normally brand positioning and competition takes place at this level.
Example- Bluetooth technology inside the car for easy telephonic
conversation as well as accessing songs from your handset.
Internet TV was a kind of augmented product before few years and now it
is a successful product.
Prof. Suvendu Kr. Pratihari
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Potential Product:
It is the “Product of Tomorrow”, carrying all the improvement
and fineness that is possible under the given technological,
economic and competitive conditions.
Example-Electric Car, Solar Car, Car which can fly, Robot for
domestic Use.
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Here the companies search for new ways to satisfy customers and
distinguish their offerings.
Prof. Suvendu Kr. Pratihari
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Basis of Product Classification
Tangibility & Durability
Consumer Goods
Industrial Goods
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Non-Durable
Goods
Tangibility &
Durability
Durable
Goods
Services
These are tangible goods normally serve
to / survive many users or last long.
Exp: Refrigerator, AC, Watch etc.
Strategy:
- Requires more personal selling and
Service
- Command a higher margin
- Require more seller guarantee
These are tangible goods normally
consumed in one or few usages. Exp:
Beer, Milk, Soap etc.
Strategy:
- Make them available in multi locations
- Charge only a small markup
- Advertise heavily to induce trial and
build preference.
These are intangible, inseparable, variable
and perishable products.
Exp: Haircut, Legal Advice, Hospitality
etc.
Strategy:
- Requires more customization
- Command more quality orientation
Prof. Suvendu Kr. Pratihari
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Classification of Consumer goods
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Convenience Goods
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These are consumer products and services that customer usually purchase
frequently.
Exp: Laundry detergent, Toilet soap, Tooth paste, Chocolate, toothpaste,
candy, Pan masala, Fast food etc.
Shopping Goods:
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These are less frequently purchased and are more expensive and require
more time and effort to purchase.
For such product, consumer wants to compare quality, price and perhaps
style in several stores before making a purchase is considered as a
shopping goods
Example: Fashionable apparel, Furniture, Automobiles etc.
Prof. Suvendu Kr. Pratihari
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Specialty Goods:
These are consumer products with unique characteristics or
brand identification for which the buyer need to make a special
purchasing effort.
These are more expensive than convenience products and are
nor purchased frequently.
Exp- Specific brand of car/watch/camera, Designer cloth,
Services of medical and legal specialists.
Unsought Goods:
These are consumer products that the customer does not know
about or does not normally think of buying.
Most major new innovations are unsought until the consumer
becomes aware of them.
Exp – Health Insurance Products, Fire alarm, Blood donation to
Red Cross etc.
Prof. Suvendu Kr. Pratihari
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Type of Consumer Products
Mktg.
Considerations
Convenience
Shopping
Specialty
Unsought
Customer
Buying
Behavior
Frequent
Purchase, Little
planning,
Little/no
comparison, Low
customer
Involvement
Less frequent
purchase, Much
planning and
shopping effort,
comparison of
brands on pricequality-style
Strong brand
preference and
loyalty, Special
purchase effort,
Little comparison
on brands, Low
price sensitivity
Little product
awareness and
Knowledge
Price
Low Price
Higher Price
Higher Price
Varies
Distribution
Wide Spread
and Convenient
Selective and
Fewer outlets
Varies
Mass
promotion by
the producer
Adv &
Personal Selling
by both
producer and
reseller
Widespread
distribution per
market area
Promotion
Prof. Suvendu Kr. Pratihari
Careful target
promotion by
both producer
and reseller
Aggressive avd.
And personal
selling by
producer &
reseller
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Industrial Goods
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Industrial Goods can be classified in terms of
their relative cost and how they enter the
production process. So, these can be again
classified in to:
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Material and Parts
Capital Item
Supplies and Business Services
Prof. Suvendu Kr. Pratihari
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Industrial Goods…contd.
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Materials and Parts
These are goods that enter the manufacturer’s product
completely.
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Raw Material
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Farm product : Wheat, Cotton, Live stock, fruits,
Vegetable etc.
Natural Product : Fish, Crude petroleum, iron ore etc.
Manufactured Material & Parts
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Component Material: Iron, Cement, Wires etc.
Component parts: Small Motors, Tires, Tubes, Glass etc.
These materials enter the finished product with no further
change.
Prof. Suvendu Kr. Pratihari
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Industrial Goods…contd.
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Capital Items
These are long lasting goods that facilitate developing or managing the
finished goods.
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Installations
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Buildings: Factory and Offices
Heavy Equipments: Generators, Mainframe computer, Elevators etc.
Equipments
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Portable factory equipments and tools: Hand tools, lift truck etc.
Office Equipments: Personal computers, office stationeries etc.
Equipments are having a shorter life than Installations.
Prof. Suvendu Kr. Pratihari
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Industrial Goods…contd.
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Supplies and Business Services
These are short-term goods and services that facilitate developing and managing the
finished products.
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Maintenance and Repair items
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Supplies
Operating Supplies
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Exp: Paints, Nails etc.
Lubricants, coal, Oil, Paper, Pencil etc.
Supplies are equivalent to convenience goods and are usually purchased
with minimum efforts and time. These are normally marketed through
intermediaries because of their low unit value and high number and
geographic dispersion of the customers.
Business Services include maintenance and repair service (window
cleaning, Computer H/W annual maintenance etc.)
Advisory services includes legal, Management and Advertising
services.
Prof. Suvendu Kr. Pratihari
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Thank You
Prof. Suvendu Kr. Pratihari
suvendupratihari@gmail.com
Prof. Suvendu Kr. Pratihari
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