chapter 6 Flashcards
define the term product
The product is what the customer receives in the marketing exchange process.
Most products fit into one of 2 basic categories: goods and services. Define Goods
something with physical features that a person can se, touch, and sometimes smell, hear or taste.
Most products fit into one of 2 basic categories: goods and services. Define Services
An activity that a person can experience only as the activity is performed, used, or consumes. These have few, if any physical characteristics.
What are 3 characteristics that distinguish services from goods?:
- intangibility
- heterogeneity
- perishability
Define the intangibility of an insurance product
this refers to its lack of physical attributes that can be detected by the senses, makes it difficult for purchasers to judge the quality of the product and for marketers to differentiate their products from competitors.
How do insurers overcome the challenge of intagibility?
through advertisements designed to promote a sense of tangible, physical presence.
- ads aim to create feelin of trust, protgection, and reliability.
- may use testimonials as a tool.
Define the term Heterogenity
refers to the variability or lack of consistency in the performance of a service.
T or F.
Customers frequently base their attitudes towards a service on the performance of the person providing the service.
True.
How do companies improve service quality and reduce inconsistency?
- adopt consistent, job-related employee selection criteria
- standardize operating procedures whenever feasible
- provide the best education, training, an d motivation possible for their personnel
- Also ensure company is capitalizing on technology resources to boost efficiency and consistency.
Define perishability
the inability to stockpile services for use in the future.
How do insurers manage the perishability of financial services
“?
taking advantage of online capabilities, which increase customer access to services without significantly increasing personal requirement or extending office hours.
Consumer products fall into which four primary classes
- convenience products
- shopping products
- specialty products
- unsought products.
Define a convenience product
a relatively inexpensive product that requires a minimum of time, information gathering, and shopping effort on the part of most customers.
What kind of insurance product is considered a concenience product?
Airline flight insurance
Define a shopping product
a product for which consumers are willing to exert the time and effort needed to gather information and compare products before purchase.
Shopping products can be further divided into homogenous shopping products and heterogenous shopping products. Define homogenous
products that customers view as similar in quality or features to other products but different enough in price to warrant comparison shopping.
Ie: household appliances, bank loans, life/auto/home insurance.
Shopping products can be further divided into homogenous shopping products and heterogenous shopping products. Define heterogenous
products that customers view as different enough from other prodcuts to compare quality, style or features as well as price.
ie: furniture, clothing, dishes. most lines of insurance.
what do you call the process by which a product reaches a point in its development where it has no features that differentiates it from competitive products other than price? And what do you call this product?
Commoditization.
Commodity.
How do insurers avoid commoditization?
use marketing messages that emphasize specific options or guarantees available on a particular product and give those features distinctive names.
- they also differentiate their products by providing superior customer experience, good ratings, online support and financial planning tools
what is a specialty product?
a product that customers make a special effort to obtain.
Define an unsought product
a product that most customers are not actively seeking.
* unaware that the product exists, they need it or can use it, or dont want to think about the product.
What is product mix?
The total assortment of products available from a company.
When a company compares its product mix to others in the same industry, it measures the mix according to Width, depth, and consistency….
Define Width
The more product categories or product classes a company offers the wider the company’s product mix.
Define product category
the entire group of products designed to address a particular customer need.
Define product calss
the entire group of products produced by a particular industry or industry sector
Define a product line
A set of different products that are closely related because they 1) function similarly 2) are marketed to the same target markets 3) are prices about the same or 4) are distributed through similar distribution systems.
Define a product form
a group of products within a product line that share certain basic characteristics. .
Define a product item.
A specific version of a specific product form within a product line.
When a company compares its product mix to others in the same industry, it measures the mix according to Width, depth, and consistency….
Define Depth
The greater the number of product forms and iteams in a prodcut line, the deeper the product mix. This allows companies to pursue different market segments with the same lines of products; and allows for a range of prices, features and benefits.
When a company compares its product mix to others in the same industry, it measures the mix according to Width, depth, and consistency….
define consistency
the more closely related a company’s products classes and product lines are to each other the more consistent its product mix.
* The more consistent the mix the easier it is to establish an expertise.
