1-1
Chapter
8
Product and Service Concepts
1-2
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
After studying this chapter you
should be able to:
1-3
Understand the differences between
goods and services.
Differentiate between consumer and
business products, and discuss the
different types of each.
Recognize that marketers need to
appreciate the perspective of the
consumer.
After studying this chapter you
should be able to:
1-4
Define and discuss the importance
of product quality, product design,
branding, packaging, and customer
service.
Explain how the different product
components need to be integrated
to meet the needs of customers.
What Is a Product?
Product:
1-5
An idea, a physical entity (a good), a
service, or any combination of the three
that is an element of exchange to satisfy
individual or business objectives .
Types of Products
Goods:
Physical products
with form and
substance
Services:
Non-physical products
usually involving
performance
1-6
Consumer Products:
Those used by
consumers for their
own use and
satisfaction.
Business Products:
Those used in the
running of a business
or in the manufacture
of products for resale.
The Goods/Services Continuum
1-7
Product Differentiation
Product Differentiation:
1-8
Exists when a firm’s
offerings differ or are
perceived to differ from
those of competing
firms on any attribute,
including price.
Goods and Services
Goods:
1-9
Physical
products.
Services:
Nonphysical
products.
Characteristics and Strategies for Services
1-10
Service Characteristic
Service Strategy
Intangible
Associate service with
something tangible
Perishable
Manage demand to utilize
supply
Inseparable
Capitalize advantages of
person providing service
Variable
Standardize service delivery
as much as possible
Consumer and Business Products
Consumer Products:
1-11
Products that are
purchased by
consumers for their
own personal use.
Business Products:
Products purchased by
a firm or organization
for its own use.
Consumer and Business Products
1-12
Types of Consumer Products
Convenience
Products
Shopping
Products
Specialty
Products
1-13
Types of Business Products
Capital
Products
Production
Products
Operational
Products
1-14
Product Components
Product
Components
Product Features
Service Features
• Quality
• Purchase services
• Design
• Usage services
• Branding
• Packaging
1-15
Branding
Brand:
1-16
A name, term, sign,
symbol, design, or
combination that a
uses to identify its
products and
differentiate them
from those of
competitors.
Brand Name:
The element of a brand
that can be vocalized:
•
•
•
•
IBM
Tide
Snickers
Diet Coke
Branding
Brand Mark:
The element of a
brand that cannot be
vocalized:
• MGM Lion
• The Buick
symbol
• The Nike
Swoosh
1-17
Trademark:
A brand or part
of a brand that is
registered with
the U.S. Patent
and Trademark
Office.
Building Brands
1-18
Types of Brands
Generics
(Products typically not branded)
Manufacturer Brand
(National brand or
regional brand)
Distributor Brand
(Store brand, private brand,
or private label)
1-19
The World’s 10 Most Valuable Brands
1-20
Rank Brand
2002 Brand Value ($billions)
1
Coca-Cola
69.6
2
Microsoft
64.1
3
IBM
51.2
4
GE
41.3
5
Intel
30.9
6
Nokia
30.0
7
Disney
29.3
8
McDonald’s
26.4
9
Marlboro
24.2
10
Mercedes
21.0
Keys to Choosing A Brand Name
Is easy to
pronounce,
recognize,
and
remember.
1-21
Is
distinctive
in some
way.
Can be
translated
into other
languages.
Packaging
Label:
A printed description
of the product on the
package.
Package:
The container or
wrapper for a
product.
1-22
Functions of Packaging
1-23
Protecting the product until
consumed.
Storing the product until
consumed.
Facilitating consumption of the
product.
Promoting the product.
Facilitating disposal of the product.
Customer Service
Customer
Service:
1-24
Describes the
assistance
provided to help a
customer with the
purchase or use
of a product.
Important Elements of
Customer Service:
Providing information
about product
alternatives.
Training in product use.
Credit and financing
services.
