Product and Service Flashcards
Product
offered to a market for attention/acquisition/use/consumption to satisfy a want or a need
Product can include
goods, services, events, persons, place, ideas,..
services def. (3)
An activity/benefit/satisfaction
- offered for sales
- intangible
- does not result in ownership of anything
Pure tangible product
soap, toothpaste
pure service
doctor’s exam, financial services
experience
to differentiate their offers -> create and manage customer experience with their brands or companies
3 levels of product and service
- Most basic: core customer value (problem-solving benefits)
- 2nd level: design Actual product
- 3rd: augment product to create customer value + full and satisfying brand experience
Product and Service Classifications (3)
- Consumer Products
- Industrial products
- Organizations, persons, places, events, ideas
Consumer Product def.
- product and services
- Bought by final consumers
- for personal consumption
consumer product types (4)
- Convencience product
- shopping
- specialty
- unsought
- Convenience product
5-1-2-1-eg
- Buying behavior:
- frequent purchase
- little planning
- little comparison
- little shopping effort
- Low customer involvement - Price: low price
- Distribution:
- widespread
- convenient locations - Promotion: mass by producers
- Examples: toothpaste, magazines, detergent
- Shopping product
4 - 1 - 1-2
- Buying behavior:
- less frequent
- much planning
- comparison of brands on price, quality and price
- much shopping effort - Price: higher price
- Distribution:
- selective distribution in fewer outlets - Promotion: Advertising + Personal Selling by both producers and resellers
- Examples: major appliances, furniture, clothes
- Specialty product
4-1-1-1
- Buying behavior:
- strong brand preference and loyalty
- special purchase effort
- little comparison
- low price sensitivity - Price: highest price
- Distribution:
- exclusive distribution in only one or a few outlets per market area - Promotion: more carefully targeted by both producer and reseller
- Examples: luxury goods
- Unsought product
1-?-?-1
- Buying behavior:
- little product awareness/knowledge - Price: varies
- Distribution: varies
- Promotion: aggresive advertising and personal selling by producer and reseller
- Examples: life insurance, blood donations
Industrial Products 3
- bought by individuals and organizations
- for further processing
- or for use in conducting a business
3 groups of industrial products
- materials and parts
- capital items
- supplies and services
Materials and parts includes (3)
- raw materials: farm and natural products
- component materials (iron, yarn, wires)
- component parts (small motors, tires,..)
Material and parts approach 2
- sold directly to industrial useres
- price and service are major mkt factors
Capital items
industrial products that aid in buyer’s production/operation
capital items include (2)
- installations
- major purchase (buildings, offices, factory)
- fixed equipments (large computer systems, elevators) - accessory equipment
- portable factory equip. and tools
- office equip.
Supplies (2)
Convenience product of industrial field
- operating supplies (lubricant, coal, paper,)
- repair and maintenance (paint, nail, broom)
Services (in supplies and services)
- repair and maintenance service (window cleaning..)
- business advisory services (legal, management consulting, advertising)
Organization as product (2)
- carry out activities to sell itself
- Org. MKT: create/maintain/change attitudes + behaviors of targer consumers toward and org
Image and ideas as products
- sponsor pr or corporate image mkt campaign
- social mkt: the use of traditional business mkt concept and tools to encourage behaviors that will create individual and societal well-being
Person marketing
Create, maintain or change attitudes or behaviors towards particular people
Place marketing
create, maintain or change attitudes or behaviors towards particular places
3 levels of product and service decisions
- individual product decisions
- product line decisions
- product mix decisions
5 individual product decisions
- product attributes
- branding
- packaging
- labelling and logos
- product support services
4 product attributes
- quality
- features
- style
- design
Quality of product def (2)
- characteristics of a product/service that bear on its ability to satisfy stated/impled customer needs
- closely linked to customer value and satisfaction
total quality management
approach - all company’s people are involved in constantly improving the quality of products, service and business process
2 dimensions of product quality
- Quality level
- Quality consistency
Quality level 3
- support product’s positioning
- performance quality: ability to perform
- choose a level that matches target market need + competing products
quality consistency
- conformance quality: freedom from defects and consistency in delivering a targeted level of performance
product features def (3)
striped-down model (no extras) - add more features - features are a competitive tool to differentiate
product style
appearance
product design
- larger concept than style
- contribute to product’s usefulness + looks
Brand def (3)
- a name, term, sign, symbol or design or combination
- identifies the products/services of one seller or group of sellers
- differentiate them
Branding roles (5)
- help consumer identify products that might benefit them
- say sth abt product quality and consistency
- brand name and trade mark - legal protection from being copied
- helps sellers segment market (sub brands for different segments)
- become the basis on which a story can built about a product’s special qualities
Packaging def
the activities of designing and producing the container or wrapper for a product
packaging roles (4)
- attract
- communicate brand positioning
- close sale
- create immediate consumer recognition
Label and Logo
from simple tags attached to products to complex graphics
functions of labels (4)
- labels identifies the product or brand
- describe the product (who made it, where and when, its content, how to use)
- promote the brand and engage customer
- support the brand’s position and add personality to the brand
Product support services
keep customers happy after the sale is the key to build lasting relationships
steps to design support services (2)
- survey customer periodically to assess the value of current services and obtain new ideas
- fix problems and add new services that will delight customers + yield profits to the company
Product Line (4)
A group of products that are closely related because they
- function in a similar manner
- are sold to the same customer groups
- marketed thrugh the same types of outlets
- fall within given prices
Product line length
number of items in the product line
too short if the manager can increase profit by adding items
2 ways to expand product line length
- Product line filling
- Product line stretching
Product line filling def
- add more items within the range of line
5 reasons to product line filling
- reach for extra profits
- satisfy dealers
- use excess capacity
- be the leading full-line company
- plug holes to keep out competitors
2 product line filling overdone
- cannibalization: eat up sales of the company’s
- customer confusion
product line stretching def
lengthens its products line beyond its current range
stretch downward 3
- companies located at the upper end of the market
- to plug hole/respond to competitpr’s attack on the upper end
- add low-end products if there’s faster growth there
stretch upward (2 reasons)
add prestige to their current products
reap higher margins
4 dimensions of product mix
- width: number of different product lines
- length: number of items within its product lines
- depth: number of versions offered for each product in the line
- consistency: how closely related the various product lines (consistent if go through the same distribution channel)
4 ways to increase 1 business
- add new product lines
- become more full-line company
- add more versions of each product
- pursue more/ less product line consistency
4 characters of service
- Intangibility
- Inseperability
- Variability
- Perishability
Service industries
- government
- private and Not for profit
- Business
Intangibility
cannot be seen/touched/tasted/felt/heard/smelle before purchase
Reduce uncertainty for service
- send right signals about quality
- make service tangible in one or more way
Inseperability
Cannot be seperated from their providers
Variability in service
quality of services depend on who provides them, when and where, how are they provides
Perishability
cannot be stored for later sale/use
the service profit chain def
the chain that links service profits with employee and customer satisfaction
5 links in service profit chain
- internal service quality
- superior selection and training
- quality work environment
- strong support - satisfied and productive service employees
- greater service value
- effective and efficient customer value creation, engagement and service deliver - satisfied and loyal customers
- healthy service profits and growth
3 types of service marketing
Internal marketing
external marketing (4p)
interactive marketing
Internal mkt
orient and motivate its customer-contact employees and supporting services people to work as a team to provide customer satisfaction
Interactive mKT
Service quality depends on the quality of buyer-seller interaction during the service encounter
3 major service mkt task
- service differentiation
- service quality
- service productivity
3 solutions to price competition
Differentiated
- offer: innovative features
- delivery: more able and reliable customer-contact ppl + superior physical environment/delivery process
- image: symbol and branding
Manage service quality (2)
- customer retention - best mesure of quality
- service recovery: angry to loyal
LATTE service recovery
- listen
- acknowledge complain
- take action by solving problem
- thank
- explain
3 ways to increase service productivity
- train or hire new better
- increase quantity by giving up some quality
- technology
8Ps in Service
- People
- Physical evidence
- Promotion and education
- Production Process
- Productivity and quality
- Place and time
- Price
- Product elements
people element
technical skills + comm. skills
3 things to educate in service
- teach about Benefits
- when/where to obtain
- how to participate in service process
3 roles of promotion and education in service mkt
- provide needed info and advice
- persuade target customers of the benefits
- encourage customers to take action at specific time
badly designed Production process
slow
bureaucratic
ineffective service delivery
relationship between productivity and quality
- Productivity is essential to keep cost under control >< cut to many can lead to low quality
- Quality is essential for differentiation and build customer equity
Place and time
- spend limited waiting time
- choose time that fit, 24/7 service
Price and costs in service
- establish selling price
-set trade margins
-establish credits terms - minize time, physical and mental effort
Product elements decision in service (2)
- core product and bundle of supplementary services
