03 Products Flashcards
What is a Product?
o Anything that can be offered to a market to satisfy a want or need.
o Includes physical goods, services, experiences, events etc.
What is the goods-service continuum?
- 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.
What is the Product Hierarchy?
- Actual product.
- Core customer value.
- Associated services.
What are the factors and benefits of an Actual Product?
- Factors: brand name, quality level, packaging, features/design.
- Benefits: Basic Product Differentiation (differential advantage from competitors).
What is a factor of Core Customer Value?
Meeting customer’s basic/fundamental needs.
What are the factors of Associated Services?
- 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).
What does the Product Mix consist of?
- Product system.
- Product mix/assortment.
What are the factors of Product mix/assortment?
o Width (category). o Length (products in category). o Depth (brands). o Consistency
What are the types of Consumer Product Classification?
- Convenience.
- Shopping.
- Specialty.
- Unsought.
What is Convenience (products)?
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.
What is Shopping (products)?
- 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.
What is Specialty (products)?
• 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.
What is Unsought (products)?
• 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.
What is Packaging?
All the activities of designing and producing the container for a product.
Why is Packaging used as a Marketing Tool?
- Attract attention
- Consumer affluence
- Company and brand image
- Innovation opportunity
What are the Objectives of Packaging?
- Identify the brand
- Convey descriptive and persuasive information
- Facilitate product transportation and protection
- Assist at-home storage
- Aid product consumption
What are the Characteristics of Packaging?
- Dispense: Access, portion control, pouring.
- Storage: Stackability, location (bathroom, kitchen etc.).
- Stability: Shelf life after opening.
- Handling: Ease of use for intended purpose.
- Opening/resealing: Appropriate to task (frequency of use).
- After usage: Secondary use (storage etc.).
- Disposal: Ease of disposal.
What is the process of Creating New Products?
- Idea Generation.
- Concept testing.
- Product/Prototype Development.
- Market Testing.
- Product Launch.
- Evaluation of Results.
What is a Service?
Any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything.
What categories of Service are there?
- A pure tangible good
- A tangible good with accompanying services
- A hybrid
- A major service with accompanying minor goods/services
- A pure service
What are the Characteristics of Services?
- Intangibility.
- Inseparability.
- Variability.
- Perishability.
What is Intangibility?
- Services cannot be seen, touched, tasted or smelled.
* Customers are asked to buy “promises” or experiences.
What is Inseparability?
• 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
What is Variability?
- 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
What is Perishability?
- Services cannot be stored like physical goods in inventory for later sales or use
- Services cannot be returned after purchase
