Chapter 7 - Product Mix Flashcards
What is a product and service?
Product: anything that can be offered to a market for attention, acquisition, use, or consumption
that might satisfy a want or need (includes flights, BMO investments); tangible, ownership
Services: an activity, benefit, or satisfaction offered for sale that is essentially intangible and
does not result in the ownership of anything
What are the three levels of products and services?
- Core customer value: most basic and addresses
the question “what is the customer really buying?” - Actual Product: the physical device with all its features and associated brand name and packaging
- Augmented Product: the additional services and
benefits that go with it (warranty).
What are the product and service classifications?
I. Consumer Products: products purchased by consumers for their personal use.
Convenience product: a consumer product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort
Shopping product: less frequently purchased consumer products and services that shoppers compare carefully on suitability, quality, price, and style
Specialty product: a consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
Unsought product: a consumer product that the consumer either does not know about or knows about but does not normally think of buying
II. Industrial Products: a product bought by individuals ad organizations for further processing or for use in conducting a business
Materials and parts: include raw materials as well as manufactured materials and parts
Capital items: industrial products that aid in the buyer’s production or operations, including installations and accessory equipment.
Supplies and services: Supplies include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms)
What are the 5 individual product decisions?
- Product attributes
- Branding
- Packaging
- Labelling and logos
- Product support services
What are product attributes?
- Product quality (total quality management)
- Product features
- Product style and design
What are the product line decisions?
Product line length: the number of items in the product line
Line stretching: adding products that are higher or lower priced than the existing line
Line filling: adding more items within the present price range
What is a product mix and the 4 decisions?
Product mix: all product lines and items
Width: # of product lines
Length: # of in product lines
Depth: # of versions of each product in the line
Consistency: how closely related the product lines are
What are the 4 service characteristics?
Service intangibility: means that services cannot be seen, tasted, felt, heard, or smelled before they are bought.
Service inseparability means that services cannot be separated from their providers, whether the providers are people or machines.
Service variability means that the quality of services depends on who provides them as well as when, where, and how they are provided.
Service perishability means that services cannot be stored for later sale or use.
What is the service profit chain and its 5 steps?
Service profit chain: which links service firm profits with employee and customer satisfaction.
- Internal service quality. Superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results in
- Satisfied and productive service employees. More satisfied, loyal, and hardworking employees, which results in
- Greater service value. More effective and efficient customer value creation, engagement, and service delivery, which results in
- Satisfied and loyal customers. Satisfied customers who remain loyal, make repeat purchases, and refer other customers, which results in
- Healthy service profits and growth. Superior service firm performance.
What are the 3 types of service marketing?
Interactive marketing: means that service quality depends heavily on the quality of the buyer–seller interaction during the service encounter.
Internal marketing: means that the service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.
External marketing: Company - Customers
What are the 3 major marketing tasks for service companies?
Managing service differentiation:
Developing a differentiated offer, delivery, and image
Managing service quality:
Delivering consistently higher quality than the competitors
Managing service productivity:
Training current employees or hiring new ones
Increasing the quantity of service by giving up some quality
Harnessing the power of technology
What is brand equity?
Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service
One measure of equity is the extent to which customers are willing to pay more for the brand
What is brand value?
Brand value is the total financial value of a brand.
What is customer equity?
Customer equity is the value of customer relationships that the brand creates.
What are the advantages of strong band equity?
High consumer awareness
Strong brand loyalty
Helps when introducing new products
Less susceptible to price competition
