Marketing Mix - Product Flashcards
Overview
What is a Product?
A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. It includes physical object, services, persons,
places, organizations and ideas.
Product dimensions
- Core product: Company’s products or services which are most directly related to their core competences
- Actual product: The physical or tangible product which a consumer buys to get a core benefit that this product is offering. ® added features, design, quality level, packaging, brand name.
- Augmented product: Both the primary physical attributes and the non-physical attributes that are added to increase the products value. ® warranty, after-sale services, delivery and credit, product support
Market offerings
We separate 5 types of market offerings:
- (tangible) goods
- services
- bundles
- hybrids
- solutions
Tangible Goods
In tangible goods, we have goods that are consumer goods (used for personal consumption, convenience, shopping, specialty, etc.) and industrial goods (used for further processing or business, raw materials, components and partially processed materials,
capital goods like buildings or fixed equipment, supplies, etc.).
Services
A service describes any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product. Typical characteristics of service are intangibility, heterogeneity, inseparability, perishability, lack of ownership, and costumer co-production.
Bundles
A bundle consists of two or more goods and/or services that are combined into one offer (happy meal, PS4 and games). Typically, the price of a bundle is lower than the price of its
individual components.
Hybrids
Hybrids are combinations of goods and services (and software) that are joined into one offer (car, iPod).
Solutions
A solution is a combination of integrated goods and/or services (and/or software) that is individualized, customized, implemented and maintained (i.e. personalized security systems).
The price of a solution is typically higher than the price of its individual, non-integrated components; some solutions might have performance-based pricing models (Michelin prices fleet customers for the number of kilometers driven, not for the tires).
Branding
Nowadays, differentiation via physical product features is getting more and more difficult, so proper branding is the most effective way to differentiate from competitors. It allows the seller to attract a set of customers that are rather loyal, and it provides legal protection for unique product features that otherwise might be copied by competitors.
- quality security
- increased shopping efficiency
- call customer’s attention to new products that might benefit them
- lead to more innovations
- help communicate with existing and potential employees
Major Brand Decisions
- To brand or not to brand (branded vs. generic product)
- Brand sponsor
- manufactures brand (manufacturer markets under his own name)
- private brand (brand name owned by wholeseller or retailer = store brand)
- license brand (contract of brand owner and company that wants to use the brand for its products)
- co-branding (= brand partnerships, when two companies form an alliance to work together, creating a market synergy).
Brand development strategies
Individual Brand
Branded house
House of Brands