Contents For Chapter 11 Notes
•Differences between Goods and Services
•Elements of the Product Mix
•Product Positioning and Repositioning
•Positioning Existing Products
•Positioning New Products
•Developing and Managing New Products
•Developing New Products
•Why New Products Fail?
•Seven Phases to New Product Development
•New Product Strategy Development
•Product Screening and Evaluation
•Buyers' Production Adoption Process
•Return to Syllabus
•Return to Homepage
We are now focusing on the major elements of the marketing mix, the ingredients of the marketing mix. First element...The Product!!
Product Planning refers to the systematic decision making related to all aspects of the development and management of a firms products including branding and packaging. Each product includes a bundle of attributes capable of exchange and use. Product definition:
A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value. Return to Contents
Differences between Goods and Services
Goods are tangible. You can see them, feel them, touch them etc. Services are intangible. The result of human or mechanical efforts to people or objects. Major distinguishing characteristics of Services:
• Intangibility-major component of a service is intangible • Pershibality-many cannot be stored for future sales Airline/Amusement ride Number of hair cut hours in one week: i.e., if Christies employs 3 people, who work forty hours per week, they have potentially 120 hair cut hours to offer. If they do not have any customers at a particular period during the day, they will lose the opportunity to cut hair at that time and therefore the opportunity to generate revenue...the opportunity has perished...they no longer have the ability to earn revenue from 120 hair cut hours that week!! • Inseparability-customer contact is often the integral part of the service...Legal services/hair dresser, therefore often a direct channel of distribution. • Variability-in service quality, lack of standardization, because services are labor intensive. Sales of goods and services are frequently connected, i.e. a product will usually incorporate a tangible component (good) and an intangible component.
Levels of Product
There are 3 levels of products
• Core Product- Marketers must first define what the core BENEFITS the product will provide the customer. • Actual Product-Marketer must then build the actual product around the core product. May have as many as five characteristics: o Quality level
o Brand name
all combined to carefully deliver the core benefit(s). • Augmented Product-offer additional consumer benefits and services. o Warranty
o Customer training
EXAMPLE SONY CAMCORDER:
• Core--the ability to take video pictures conveniently • Actual--Sony Handycam (brand name), packaged, convenient design so you can hold it, play back features etc. that provide the desired benefits, high quality etc. • Augmented--receive more than just the camcorder. Give buyers a warranty on parts and workmanship, free lessons on how to use the camcorder, quick repair service when needed and toll free telephone number when needed. Marketers must first identify the core consumer needs (develop core product), then design the actual product and find ways to augment it in order to create the bundle of benefits that will best satisfy the customer.
Products can be classified depending on who the final purchaser is. Components of the marketing mix will need to be changed depending on who...