Marketing: Chapter 12 Product and Service

Levels(layers) of Product:
Reasons why a consumer will purchase a product.
-Core Benefits: The fundamental product benefits that the customer is buying the product, such as a way of transportation(The benefit).
– Actual Product: The combination of tangible and intangible attributes that delivers the core benefits.
– Augmented product: Additional services or benefits that enhance the ownership of the actual product.
Convenience Product:
▮ Goods and services that consumers want to purchase frequently, immediately, and with minimal effort
• Impulse goods and services
• Chocolate, Candy, Gum
• Staples • Shampoo, Tissues
• Emergency goods and services • First aids
▮ Consumers devote little effort to these purchase decisions
Shopping Products:
Shopping products that are more complex and bought less frequently than convenience products.
▮ Purchased only after the consumer compares competing offerings
▮ More expensive than convenience goods
▮ Computer, Clothes, Insurance
▮ Information prior to the buying trip, and gathers it in the process
▮ Some shopping products are viewed as homogeneous
Specialty Products:
Those products have unique characteristics that cause buyers to prize those particular brands, such as luxury car high-end designer clothes.
Unsought Products:
Products or service such as life insurance, or funeral planning, are items do not like or think to purchase.
Industrial products:
Products or services on sold to businesses and governments, such as equipment, MRO products (maintenance, repair, and operation, such as screws, nails), raw materials, processed materials and services, components.
New product development:
Idea Genetation
Idea Screening
Concept development
Marketing Strategy
Business Analysis
Concept testing (Product development)
Concept testing (test marketing)
Commercialization.
Product Design
It is a critical element of product strategy and has potential to add differentiation and value.
Product Lines
– Series of related products
▮ Groups of associated items, such as items that consumers use together or think of as part of a group of similar products
Line Extensions
Additions to an existing product line and are one way to increase the depth of a product line
Line Expansions
Occur when an entirely new lines are added to a product mix.
Stages in the Product Lifecycle (PLC)
The stages that a product goes through during its life:
Introduction, growth, maturity, and decline
Product lifecycle Concepts
▮ Products have a limited life.
▮ Profits from a product vary at different
stages in the life cycle.
▮ Product sales pass through distinct stages, each with different marketing implications.
▮ Products require different strategies at
different life cycle stages.
▮ Varies with every product
• Can be controlled by marketing efforts
• Changes with technology introductions
Introductory stage
-Products in this stage might bring new
technology to a product category
▮ Technical problems and financial losses are common
▮ Most products fail at this stage
Growth stage
▮ Sales volume rises rapidly as new customers make initial purchases and early buyers repurchase the product
▮ Advertising: how much better your product is than you competitors’ products
Maturity stage
▮ Sales of a product category continue to grow during the early part of this stage but eventually reach a plateau as the backlog of potential customers dwindles
Decline stage
▮ Innovations or shifts in consumer
preferences bring about an absolute decline in industry sales
▮ New, more innovative products have been created that replace the company’s
▮ Cut the costs to increase revenue
• Innovators
They enjoy taking risks with new products
» They are mostly well informed
» Very small in numbers
» Tolerate failures
» They trigger the next level – Adopters
• Early adopters/Early Majority
» These wait for initial purchases to happen, product reviews
» They enjoy novelty, higher incomes youth, educated, socially forward
» Opinion leaders
» They help spread the world
•Late Majority
» Skepticism, senior in age, mixed levels of education
» They build the sales volumes
» Don’t like to take too much risk
» Careful buyers & choosers
•Laggards
»They avoid change
» Rely on existing products until it outgrows completely
» Form the last small section
» They don’t need to much ad & communication