MSMK7001 Chap.9 Products, Services and Product Decisions
Products, Services and Product Decisions
What a product is
A product is anything offered to a market that might satisfy a need or want, including services, events, persons, places, organizations and ideas. Services are intangible activities or benefits that leave no ownership, and experiences are offerings built around the senses and feelings that play out over a period of time.
Every product has three levels: the core customer value the buyer is really purchasing, the actual product of design, brand and packaging that delivers it, and the augmented product of added services and benefits.
Classification predicts the mix
Consumer products are classified by how people buy them.
Convenience goods are bought often with little effort; shopping goods are compared on price, quality and style; specialty goods command special effort and loyalty; unsought goods are unknown or unwanted until sold. Each type carries typical price, distribution and promotion patterns.
Industrial products, bought for further processing or business use, are materials and parts, capital items, and supplies and services.
Individual, line and mix decisions
Individual product decisions cover quality, with performance and conformance as separate dimensions, features, style and design, branding, packaging, labels and support services.
Line decisions concern how many items to carry, with line filling and upward or downward stretching as options. The product mix has width, length, depth and consistency, each pointing to a different way to grow.
Services need more than the four Ps
Services are intangible, inseparable from providers, variable in quality and perishable.
Service firms therefore rely on the service-profit chain, internal marketing to motivate staff, and interactive marketing to improve the encounter. When things go wrong, strong recovery can build more loyalty than a problem-free experience.
What this chapter covers
- 01
Products, services and experiences
- 02
Three levels of product
- 03
Consumer and industrial product classifications
- 04
Quality, features, style and design
- 05
Packaging, labels and support services
- 06
Product line length, filling and stretching
- 07
Product mix width, length, depth and consistency
- 08
Service characteristics and service strategies
Worked example · free
Analyze an offer at three levels and classify it
- 2State the core customer value.
- 2List what belongs to the actual and augmented levels.
- 2Classify the product and give the marketing implication.
Key terms
- Core Customer Value
- The level of a product representing what the buyer is really buying, the benefit that gives the product its utility.
- Augmented Product
- The level of a product consisting of additional consumer services and benefits, such as delivery, credit, warranty and after-sale service.
- Shopping Product
- A less frequently purchased consumer product that buyers compare carefully on suitability, quality, price and style.
- Specialty Product
- A consumer product so distinctive, or so strongly identified with its brand, that a sizeable group of buyers will go out of their way to get it.
- Conformance Quality
- The dimension of product quality concerned with consistency and freedom from defects, as distinct from performance quality.
- Line Stretching
- Lengthening a product line beyond its current range, downward with low-end products or upward with high-end ones.
- Product Mix
- All the product lines and items a particular seller offers for sale, described by width, length, depth and consistency.
- Service-Profit Chain
- The sequence tying a service firm's profits to how satisfied its staff and customers are, running from internal service quality to healthy profits and growth.
- Internal Marketing
- Preparing and motivating front-line and support staff so they act together to satisfy customers.
Products, Services and Product Decisions FAQ
What are the four characteristics of services?
Intangibility, because there is nothing to see, taste, touch, hear or smell before buying; inseparability, because a service cannot be split from the people providing it; variability, because quality shifts with the provider, the time, the place and the method; and perishability, because unused capacity cannot be kept for sale later.
How is a shopping product different from a convenience product?
Convenience products are bought frequently and immediately with little comparison, so they need low prices, widespread distribution and mass promotion. Shopping products are bought less often after careful comparison of price, quality and style, so they carry higher prices, selective distribution and personal selling alongside advertising.
What should a service firm do when something goes wrong?
Treat recovery as an opportunity. The lecture argues that outstanding recovery can win more loyalty than if nothing had gone wrong, and offers a five-step routine: listen to the customer, empathize, apologize, resolve the problem, and notify by following up to confirm the fix worked.
Assessment move
For your group's new product, write the three product levels in three lines and name its consumer product type. Then check that your planned price, channel and promotion match the pattern that type implies. Any mismatch is either a deliberate strategic choice you must justify in the presentation or an error to fix before it.
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