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A product is anything that can be offered to a market for attention, acquisition,
use or consumption that might satisfy a want or need. A product can be a tangible
object, service event, person, place, organization, idea
A service is a form of product that consists of activities, benefits, or satisfaction
offered for sale that are essentially intangible and do not result in the ownership of
An experience represents what buying the product or service will do for the
Products are a key element in the overall market offering that brings value to
target customer and are the basis on which a company builds profitable customer
relationships. A companys marketing offering often includes both tangible goods
and services. To differentiate their offers, beyond simply making products and
delivering services, companies manage to create customer experiences with their
Level of product and services
Product planners need to think about products and services on three levels. Each
level adds more customer value. When developing a product, marketers should seek
to create customer value and the most satisfying customer experience.
Core customer value: What is the
buyer really buying? When designing
products, marketers must first define
the core problem-solving benefits or
services that customer seek.
Actual product: development of the
products and services features,
design, quality levels, brand name
and packaging. This attribute should
all be carefully combined to deliver
the core customer value.
Augmented product: offering of
additional customer services and
Products and Services classifications
Products and services fall into two broad classes based in the type of consumers
that use them: consumer products and industrial products.

Consumer products

Consumer products are products and services bought by final consumers for
personal consumption. These products usually are classified based on how
consumers go about buying them.
Convenience products are consumer products and services that consumers
usually buy frequently, immediately and with minimum comparison and buying
effort. These products are low priced and broadly distributed in order to be
readily available when customers need or want them.
Shopping products are less frequently purchased consumer products and
services that customers compare carefully on suitability, quality, price and style.
The process of buying of these involves more gathering of information and
making of comparisons. The companies distribute these products through fewer
outlets but provide deeper sales support.
Speciality products are consumer products and services with unique
characteristics or brand identification for which a significant group of buyers is
willing to make a special purchase effort. Buyers normally do not compare
speciality products; they only invest the time needed to reach the right dealer.
Unsought products are consumer products and services that a consumer
either does not know about or knows about but does not normally consider
buying. These products require a lot of advertising, personal selling and other
marketing efforts.

Industrial products

Industrial products are those purchased for further processing or for use in
conducting a business.

Industrial Products
and Services

Materials and

Raw materials

Capital items

materials and parts

Farm Products

materials (cotton,

Natural Products

Component parts
(motors, tyres)

Suppliers and

Instalation (fixed

Operating supplies


repair and advisory


Marketers make product and service decisions at three levels: individual product
decisions, product line decisions and product mix decisions.
Individual product and service decisions
Developing a product or a service involves defining the benefits that it will offer.
These benefits are communicated and delivered by products attributes such as
quality, features and style and design.

1. Product attributes

Product quality

Quality is the characteristics of a product or service that bear on its ability to

satisfy stated or implied customer needs. It is one of the main positioning tools.
Total Quality Management (TQM) is an approach in which all of the companys
people are involved in constantly improving the quality of products, services and
business processes.
Product quality has two dimensions: level and consistency.

In developing a product, marketers first must choose quality level that will
support a products positioning. Here, product quality means performance quality
the ability of a product to perform its functions. Usually, companies choose a quality
level that matches target market needs and the quality levels of competing products.
High quality also means high levels of quality consistency. Here, product quality
means conformance quality freedom from defects and consistency in delivering a
targeted level of performance.

Product features

Features are a competitive tool for differentiating the companys product from
competitors products.
A company should periodically survey buyers and assess each features value to
customers versus its cost t the company. Features that customers value highly in
relation to costs should be added.

Product style and design

Style simply describes the appearance of a product. Good design contributes to

products usefulness as well as to its looks. Design involves a deep observation of
customers and understanding of their needs; it involves shaping a customers
product-use experience. Product designers should think more about how customers
will use and benefit from a product.
2. Branding
A brand is a name, term, sign, symbol or design, or a combination of these, that
identifies the maker or seller of a product or a service. Customers attach meanings
to brands and develop brand relationships. Brands also say something about
products quality and consistency and provide legal protection for underlying
3. Packaging
Packaging involves designing and producing the container or wrapper for a
product. It is an important marketing tool from attracting attention, to describing a
product, to making the sale. A good packaging creates immediate recognition of a
4. Labelling
The label identifies a product or a brand, describes several things about a product
and promote a brand, support its positioning and connect it with customers.
5. Product support services

Support services are an important of a customers overall brand experience.

Keeping customer happy after a sale is a key to building customer loyalty and lasting
relationships. A company should survey customers to assess the value of current
services and obtain ideas for new ones.
Product line decisions
A product line is a group of products that are closely related because they
function in a similar manner, are sold to the same customer groups, are marketed
through the same types of outlets, or fall within given price range.
The major product line decision involves product line length the number of
items in a product line. The product line length is influenced by companys objectives
and resources, example: upselling and cross-selling.
A company can expand its product line in two ways: by line filling or by line
Product line filling involves adding more items within the present range of the
line. Opportunities: extra profit, excess capacity, leading, etc. Threats: product
cannibalization and customer confusion.
Product line stretching occurs when a company lengthens its product line
beyond its current range. The company can stretch its line downward, upward or
both ways. A company may stretch downward to plug a market hole or to respond to
a competitors attack on the upper end. A company may stretch upward to add
prestige to their current products or be attracted by higher margins and faster
Product mix decisions
A product mix (or product portfolio) consists of all the product lines and items
owned by a company or a seller. A companys product mix has four important
dimensions: width, length, depth and consistency.
Wight refers to the number of different product lines;
Length total number of items within all the product lines;
Depth number of versions offered for each product in the line;
Consistency how closely related the various product lines are in end use,
production requirements, distribution channels or some other way.
These product mix dimensions provide the handles for defining the companys
product strategy, by changing these dimensions.
The nature and characteristics of a service


A service cannot be perceived by five senses. To reduce uncertainty, buyers look

for signals of service quality. They draw conclusions bout quality from the place,
people, price, equipment and communication that they can see. Therefore, a service
providers task is to make the service tangible in one or more ways and send the
right signals about quality.


Service inseparability means that service cannot be separated from its providers.
A service provider is the product. Services are first sold and then produced and
consumed at the same time. Since the consumer is present as the service is
produced, provider-customer interaction is a special feature of service marketing.


The quality of the same service being provided at different time may change.
Each time a service is performed it can be different from the previous performance
and will be different from the subsequent performance.


Service cannot be stored for later use. Example: dentist can charge for a missed
appointment because a service value existed only at that point and disappeared
when the patient did not show up.
The service profit chain
In a service business, the customer and the front-line service employee interact
to create the service. Effective interaction depends on the skills of front-line service
employee. The successful service companies focus their attention on both their
customers and their employees. They understand the service profit chain, which
links service firm profits with employee and customer satisfaction.
Internal marketing means that a service firm must orient and motivate its
customer-contact employees and supporting service people to work as a team to
provide customer satisfaction.
Interactive marketing means that service quality depends heavily on the quality
of the buyer-seller interaction during the service creation.
Some analysts see brands as the major enduring asset of a company,
outlasting its specific products and facilities. Thus, brands are powerful assets that
must be carefully developed and managed.

Brand equity
Brands are a key element in the companys relationships with the customers.
Brands represent consumers perceptions and feeling about a product and its
Brand equity is the differential effect that knowing the brand name has in
customer response to a product and its marketing. It is a measure of the brands
ability to capture consumer preference and loyalty. Brand has positive brand equity
when customers react more favourably to it than to a generic or unbranded version
of the same product. It has negative brand equity if consumers react less favourably
to an unbranded version.
Measures of brand strength:
Differentiation what makes a brand stand out;
Relevance how consumers feel it meets their needs;
Knowledge how much consumers know about a brand;
Esteem how highly consumers regard and respect the brand.
A brand must be distinct in ways that are relevant to consumers needs. High
brand equity provides a company with many competitive advantages. A powerful
brand enjoys a high level of consumer brand awareness and loyalty. The
fundamental asset underlying brand equity is customer equity - the value of
customer relationships that a brand creates.
Building strong brands

Brand Positioning

Brand should be positioned clearly in target customers minds. There are three
levels of positioning:
o At the lowest level, positioning on product attributes, but
competitors can easily copy attributes;
o A better positioning by associating brands name to a desirable
o The strongest positioning is on beliefs and values, creating
excitement surrounding a brand.
When positioning a brand, the marketer should establish a mission for a brand
and a vision of what a brand must be and do. A brand is the companys promise to
deliver a specific set of features, benefits, services and experiences consistently to

Brand name selection

It begins with a careful review of a product and its benefits, the target market
and proposed marketing strategies.
o It should suggest about products qualities and benefits;
o Easy to pronounce, recognise and remember;
o Distinctive;
o Extendable, allow expansion to another categories;
o Easy translation;
o Capable of registration and legal protection.

Brand sponsorship

A product may be launched as:

o National brand (manufacturers brand);
o Private brand (store brand) a brand created and owned by a
o Licensed brand names, symbols, characters previously created by
other manufacturers;
o Co-branded product when two established brand names of
different companies are used on the same product.
Greater brand equity;
Complementary strengths;
Expansion into new categories;
Complex legal contracts and licenses.

Brand development

o Line extension occurs when a company extends existing brand names to new
forms, colours, sizes, flavours, etc. of an existing product category.
o Brand extension extends a current brand name to new or modified products
in a new category.
Product instant recognition and faster acceptance;
Saves advertising expenses required to build a new brand name;

May confuse the image of the main brand.

o Multibrands occurs companies market many different brands in a given

product category. Offers a way to:
Establish different features that appeal to different customer
Lock up more reseller shelf space.
Capture a larger market share.
Each brand obtains a small market share and none is very profitable.
o New brands are created when the power of the firmscurrent brand is
waning or when a firm wants to enter a new market for each none of its
current brand names are appropriate.
Managing brands
First, a brands positioning must be continuously communicated to consumers.
This communication can be done through advertising in order to help to create name
recognition, brand knowledge and preference. But a more efficient way is to manage
to create brand experience. Today, customers come to know the brand through a
wide range of contacts and touch points. The company should put as much care into
managing these touch points as it does into producing its ads.