03 Products

Question 1

What is a Product?

Answer 1

o Anything that can be offered to a market to satisfy a want or need.
o Includes physical goods, services, experiences, events etc.

Question 2

What is the goods-service continuum?

Answer 2

• All products can be placed on a scale somewhere between being a pure service (no tangible output) and a pure good (no intangible service added to the good).
• In practice, most products fall between the two extremes by being a combination of good and service.

Question 3

What is the Product Hierarchy?

Answer 3

• Actual product.
• Core customer value.
• Associated services.

Question 4

What are the factors and benefits of an Actual Product?

Answer 4

• Factors: brand name, quality level, packaging, features/design.
• Benefits: Basic Product Differentiation (differential advantage from competitors).

Question 5

What is a factor of Core Customer Value?

Answer 5

Meeting customer’s basic/fundamental needs.

Question 6

What are the factors of Associated Services?

Answer 6

• Factors: Complex forms of product differentiation. Typically to do with non-physical part of the product.
  E.g. brand, also services, physical environment (financing, product warranty, product support).

Question 7

What does the Product Mix consist of?

Answer 7

• Product system.

- Product mix/assortment.

Question 8

What are the factors of Product mix/assortment?

Answer 8

o Width (category).
o Length (products in category).
o Depth (brands).
o Consistency

Question 9

What are the types of Consumer Product Classification?

Answer 9

• Convenience.
• Shopping.
• Specialty.
• Unsought.

Question 10

What is Convenience (products)?

Answer 10

Those products which the consumer buys frequently and with a minimum of comparison and buying effort.
• Consumer has complete knowledge of product prior to purchase.
• Usually low priced and widely available.
• Classified as staples, impulse & emergency.

Question 11

What is Shopping (products)?

Answer 11

• Those products which the consumer usually compares on the bases of suitability, quality, price and/or style.
• Consumers spend considerable time and effort in gathering information and making comparisons.
• Search continues as long as the consumer believes the gain from comparison outweighs the additional time and effort.

Question 12

What is Specialty (products)?

Answer 12

• Products which the consumer perceives to have unique characteristics or brand identification and is willing to make a special purchase effort.
• Substitutes are not an option:
- Exclusive car- trip to a particular dealer.
- Specific wine - cellar door release, trip to the winery.

Question 13

What is Unsought (products)?

Answer 13

• Products which the consumer does not know about or knows about but does not normally think of buying.
• Consumers do not seek out unsought products until they are made aware of or need the products.
• Requires much promotion, particularly personal selling efforts.
o Eg. Life insurance, private superannuation, cemetery plots, smoke detectors, etc.

Question 14

What is Packaging?

Answer 14

All the activities of designing and producing the container for a product.

Question 15

Why is Packaging used as a Marketing Tool?

Answer 15

• Attract attention
• Consumer affluence
• Company and brand image
• Innovation opportunity

Question 16

What are the Objectives of Packaging?

Answer 16

• Identify the brand
• Convey descriptive and persuasive information
• Facilitate product transportation and protection
• Assist at-home storage
• Aid product consumption

Question 17

What are the Characteristics of Packaging?

Answer 17

1. Dispense: Access, portion control, pouring.
2. Storage: Stackability, location (bathroom, kitchen etc.).
3. Stability: Shelf life after opening.
4. Handling: Ease of use for intended purpose.
5. Opening/resealing: Appropriate to task (frequency of use).
6. After usage: Secondary use (storage etc.).
7. Disposal: Ease of disposal.

Question 18

What is the process of Creating New Products?

Answer 18

1. Idea Generation.
2. Concept testing.
3. Product/Prototype Development.
4. Market Testing.
5. Product Launch.
6. Evaluation of Results.

Question 19

What is a Service?

Answer 19

Any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Question 20

What categories of Service are there?

Answer 20

• A pure tangible good
• A tangible good with accompanying services
• A hybrid
• A major service with accompanying minor goods/services
• A pure service

Question 21

What are the Characteristics of Services?

Answer 21

• Intangibility.
• Inseparability.
• Variability.
• Perishability.

Question 22

What is Intangibility?

Answer 22

• Services cannot be seen, touched, tasted or smelled.

* Customers are asked to buy “promises” or experiences.

Question 23

What is Inseparability?

Answer 23

• Unlike physical goods, it is difficult to separate the service from the person who performs the act
• The service provider plays an important role
• Interaction with the service provider affects the service provision and the customer’s satisfaction
• Customers are often part of the service delivery
o Supply labour (effort) o And knowledge
(information)
• Other customers directly
affect service perception

Question 24

What is Variability?

Answer 24

• Difference or variability in the service
• Variability is the result of different people providing the same service in a slightly different way because no two people are identical

Question 25

What is Perishability?

Answer 25

• Services cannot be stored like physical goods in inventory for later sales or use
• Services cannot be returned after purchase