Chapter 6: Products, Goods & Services

Is Taylor Swift a product?

The person, Taylor Swift, is not an actual product for sale. The output and image of Taylor Swift, the person, are part of an exchange.

What is a product?

The term product is often used in general sense, referring to a product profile or entire market offering, including the “thing” being offered, the image of the brand, or the central aspect of a producer-consumer exchange.

The product is the most central of the 4Ps.

Products (General)

• can be either a good or a service.

• It is the most essential decision in the 4Ps because it is what the consumer is receiving in the exchange.

Exchange

• The company offers something (a product) that will benefit the customer

  • The product can be designed to be more or less attractive

    • Increase/decrease quality, service, etc.

• The customer offers something in return (payment)

  • The customer can be more or less attractive.

    • High/low loyalty, high/low maintenance, spreads positive word-of-mouth, etc.

Marketers need to

1. Determine what the customers want in order to increase the likelihood of exchange

2. Determine what the company can profitably offer.

• The goal is to create mutually beneifical exchanges that will result in long-term customer relationships.

Intangibility

• Extent to which you have something concrete

  • Pure goods: e.g., paper & phone

  • Pure services: e.g., massage & babysitting

  • Hybrids: e.g., restaurant & beauty salon

Experience Marketing

• Consumers are buying the experience

  • e.g., ESPN Zone & Build-a-Bear

Service Qualities

May be evaluated prior to purchase

Experience Qualities

Need trial/consumption before evaluation

Credence Qualities

Difficult to judge even post-consumption

What are goods dominated by?

Search and experience qualities

What are services dominated by?

Experience and credence qualities

What are professional service providers beginning to understand?

The value of marketing

• Create professional appearance and setting, tap their networks, etc.

Services are simultaneously produced and consumed; thus

1. Services cannot be stored; goods can.

• Marketers need to even out demand

2. Services cannot be separated from the provider; goods can.

• Customer/service provider interaction becomes part of the service

Variability

• Goods are made by machines; services are usally people intensive

• Services change across customers and across time.

• Self-service is advancing in many industries

What do marketers need to do? (variability)

1. Reduce bad variability

2. Enhance good variability

Test

Test

Core

Essential to the product offering

Value

-added is supplemental

• Can use to differentiate and improve satisifaction

• Can use to identify competition

Core vs. Value-Added

• Core elements are expected by customers.

• Core elements that are substandard can trigger dissatisfaction.

  • Recall issued, poor quality, etc.

• Marketers can compete/differentiate on value-added aspects.

  • Generous service plan, good staff, etc.

• Core businesses may change as industries and firms change.

  • e.g., Victoria’s Secret was 70% apparel but is now 70% beauty and fragrance.

• It is key to continually ask

  • What business are we really in?

  • Who are our true competitors?

Define competition broadly.

e.g., car companies compete with other means of transportation (bus, taxi, etc.)

Product mix

A company’s product lines

Breadth

Number of product lines

• Frigidaire sells refrigerators, washers, dryers, ranges, etc.

Depth

Number of products in a line

• Frigidaire refrigerators have different sizes and features.

Product Line Strategies

• Product line managers can prune or supplement existing lines.

• Offering multiple products through multiple segments is rather inefficient and doesn’t leverage the company’s knowledge of its customers or its products