Summary of Product Characteristics and Classifications

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CHAPTER 12 ::: SETTING PRODUCT
STRATEGY

SUMMARY

::: Product Characteristics and Classifications

Product Levels: The Customer Value Hierarchy

The marketer needs to address five product levels. Each level adds more customer value, and five constitute a Customer value hierarchy. Core benefit: It is the fundamental level. It is the benefit the customer is really buying. Basic product: The marketer has to turn the core benefit in to the basic product. Expected product: A set of attributes and conditions buyers normally expect when they purchase this product. Augmented product: The product that exceeds customer expectations. Potential product: It encompasses all the possible augmentations and transformations the product or offering might undergo in the future.

Product Classifications:

Durability and Tangibility
1. Nondurable goods
2. Durable goods
3. Services

Consumer-Goods classification
1. Convenience goods: staple goods, impulse goods, emergency goods. 2. Shopping goods: homogeneous shopping goods, heterogeneous shopping goods. 3. Specialty goods
4. Unsought goods

Industrial-Goods Classification
1. Material and Parts: Raw material products include farm products and natural products, manufactured materials and parts include component materials and component parts. 2. Capital items: installations and equipments.

3. Supplies and Business services: Supplies include maintenance and repair items and operating supplies. Business services include maintenance and repair services and business advisor services.

::: Differentiation

to be branded, products must be differentiated.

Product Differentiation:

Form: The size, shape, or physical structure of a product.
Features: Most products can be offered with varying features that supplement its basic function. Performance Quality: It is the level at which product’s primary characteristics operates. Conformance Quality: It is the degree to which all the produced units are identical and meet the promised specifications. Durability: A measure of the product’s expected operating life under natural conditions is a valued attribute for certain products. Reliability: A measure of the probability that a product will not malfunction or fail within a specified time period. Reparability: It is a measure of the ease of fixing a product when it malfunctions or fails. Style: It described the product’s look and feel to the buyer.

Design: The Integrative Force
As competition intensifies, design offers a potent way to differentiate and position a company’s products and services. Design is the totality of features that affect how a product looks and functions in terms of customer requirements.

Services Differentiation:

Ordering ease: It refers to how easy it is for the customer to place an order with company. Delivery: It refers to how well the product or service is delivered to the customer. It included speed, accuracy, and care attending the delivery process. Installation: It refers to the work done to make a product operation in its planned location. Customer training: It refers to training the customer’s employees to use the vendor’s equipment properly and efficiently. Customer consulting: It refers to data, information systems, and advice services that the seller offers to buyers. Maintenance and repair: It describes the service program for helping the customers keep purchased products in good working order.

::: Product and Brand Relationships

The Product Hierarchy:
1. Need family
2. Product family
3. Product class
4. Product line
5. Product type
6. Item (also called stock keeping unit or product variant.)

Product systems and mixes:
A product system is a group of divers but related items that function in a compatible manner. A product mix is the sell of all products and items a particular seller offers for sale. A company’s product mix has a certain width, length, depth, and consistency. • The width of a product mix refers to how many...
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