Unit8.ProductClassificationand ProductDecisions
Unit 8. Product Classification and Product Decisions
Products and Services Product is a keyelement in the market offeringMarketing-mix planning begins with formulatingan offering that brings value to target customersand satisfies their needs.This offering becomesthe basis upon which the company buildsprofitable relationships with customers.In modern marketingwe define a product asanything that can be offered to a market forattention,acquisition,use,or consumption andthat might satisfy a want or need.Productsinclude more than just tangible goods. Broadlydefined,productsincludephysicalobjectsservices,events,persons,places,organizations,ideas,ormixes of theseentities
◼ Products and Services ◼ Product is a key element in the market offering. Marketing-mix planning begins with formulating an offering that brings value to target customers and satisfies their needs. This offering becomes the basis upon which the company builds profitable relationships with customers. ◼ In modern marketing we define a product as anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need. Products include more than just tangible goods. Broadly defined, products include physical objects, services, events, persons, places, organizations, ideas, or mixes of these entities
Thus, throughout this text, we use the termproduct broadly to includeany or all of theseentities.Product planners need to think about products andservices on threelevels (SeeP141 Figure8.1)Eachleveladdsmorecustomervalue.The mostbasiclevelisthe core benefit,which addressesthe question What is the buyer really buying?When designing products,marketers must firstdefine the core,problem-solving benefitsorservices that consumers seek.A woman buyinglipstick buys more than lip color.Asan executiveof one of the famous cosmetics companies said:"In the factory,we make cosmetics;in the store,wesellhope
Thus, throughout this text, we use the term product broadly to include any or all of these entities. Product planners need to think about products and services on three levels (See P141 Figure 8.1). Each level adds more customer value. The most basic level is the core benefit, which addresses the question What is the buyer really buying? When designing products, marketers must first define the core, problem-solving benefits or services that consumers seek. A woman buying lipstick buys more than lip color. As an executive of one of the famous cosmetics companies said: "In the factory, we make cosmetics; in the store, we sell hope
ThreeLevelsof Product(SeeP140-141Fig.8.1)Augmented ProductInstallationPackagingBrandFeaturesNameCoreAfter-DeliveryBenefit orSale&CreditServiceQualityServiceDesignLevelWarrantyCoreProductActualProduct2
4 Brand Name Quality Level Packaging Design Features Delivery & Credit Installation Warranty AfterSale Service Core Benefit or Service Actual Product Core Product Augmented Product Three Levels of Product (See P140-141 Fig. 8.1)
Atthesecond level,product planners mustturnthecorebenefit intoan actualproduct.They need todevelop productand servicefeatures, design,a quality level, a brand nameandpackaging.Forexample,aSony camcorderis an actualproduct.Itsname,parts,styling,features,packaging,andother attributeshave all been combined carefully to deliverthe core benefit-a convenient,high-quality way to captureimportantmoments.Finally,product planners mustbuild an augmented productaround the core benefit and actual product by offeringadditional consumer services and benefits.Sony must offermore than just a camcorder.It must provide consumers witha complete solution to their picture-taking problems
At the second level, product planners must turn the core benefit into an actual product. They need to develop product and service features, design, a quality level, a brand name, and packaging. For example, a Sony camcorder is an actual product. Its name, parts, styling, features, packaging, and other attributes have all been combined carefully to deliver the core benefit—a convenient, high-quality way to capture important moments. Finally, product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits. Sony must offer more than just a camcorder. It must provide consumers with a complete solution to their picture-taking problems
Product Classifications Productsandservicesfall into two broad classesbased on the types of consumers that use them -consumer products and industrialproductsBroadlydefined,productsalsoincludeothermarketable entities such as experiences,organizations,persona,places,andideasConsumerproductsConsumerproductsare products and servicesbought byfinalconsumersforpersonalconsumption.Marketers usually classifytheseproductsand services further based on howconsumers go about buying them. Consumerproducts include convenience products,shoppingproducts,specialty products,and unsoughtproducts
◼ Product Classifications ◼ Products and services fall into two broad classes based on the types of consumers that use them - consumer products and industrial products. Broadly defined, products also include other marketable entities such as experiences, organizations, persona, places, and ideas. ◼ Consumer products ◼ Consumer products are products and services bought by final consumers for personal consumption. Marketers usually classify these products and services further based on how consumers go about buying them. Consumer products include convenience products, shopping products, specialty products, and unsought products
Product ClassificationsConsumerProductsConvenience ProductsShopping Products>Buyfrequently &immediatelyBuyless frequently>Low pricedHigher price>Mass advertising>Fewerpurchase locations>Many purchase locations》Comparison shopi.e Candy,newspapersi.e Clothing,cars,appliancesSpecialty ProductsUnsought ProductsSpecialpurchaseefforts>Newinnovations》High price>Products consumers don't>Unique characteristicswantto thinkabout these productsBrandidentification>Require much advertising &personal selling>Few purchase locationsi.e Life insurance,blood donationi.e Lamborghini,Rolex
7 Unsought Products ➢ New innovations ➢ Products consumers don’t want to think about these products ➢ Require much advertising & personal selling i.e Life insurance, blood donation Product Classifications Consumer Products Specialty Products ➢ Special purchase efforts ➢ High price ➢ Unique characteristics ➢ Brand identification ➢ Few purchase locations i.e Lamborghini, Rolex Shopping Products ➢ Buy less frequently ➢ Higher price ➢ Fewer purchase locations ➢ Comparison shop i.e Clothing, cars, appliances Convenience Products ➢ Buy frequently & immediately ➢ Low priced ➢ Mass advertising ➢ Many purchase locations i.e Candy, newspapers
Industrial products Industrialproducts are those purchasedforfurther processing or for use in conducting abusiness.Thus,the distinction between aconsumer product and an industrial product isbased on the purpose for which the product isbought.Ifa consumerbuys a lawnmower for usearound home,the lawn mower is a consumerproduct.If the same consumer buys the samelawn mower for useinalandscapingbusiness,thelawn mower isanindustrial product.The three groups of industrial productsand services includematerialsand parts,capital items,and supplies andservices.Materials andpartsinclude rawmaterials andmanufacturedmaterialsandparts
◼ Industrial products ◼ Industrial products are those purchased for further processing or for use in conducting a business. Thus, the distinction between a consumer product and an industrial product is based on the purpose for which the product is bought. If a consumer buys a lawn mower for use around home, the lawn mower is a consumer product. If the same consumer buys the same lawn mower for use in a landscaping business, the lawn mower is an industrial product. ◼ The three groups of industrial products and services include materials and parts, capital items, and supplies and services. Materials and parts include raw materials and manufactured materials and parts
Product ClassificationsIndustrial Products(SeeP143-144)MaterialsandPartsCapitalItemsSuppliesandServices
9 Supplies and Services Materials and Parts Capital Items Product Classifications Industrial Products (See P143-144)
ProductDecisionsMarketers makeproduct and services decisions atthree levels:individual product decisions,productline decisions,andproduct mixdecisions.Wediscuss eachinturn.The important decisions inthe development andmarketingofindividual productsandservicesinclude decisions about productattributesbranding,packaging,labeling,andproduct supportsevices.Wewill focus oneach ofthem
Product Decisions Marketers make product and services decisions at three levels: individual product decisions, product line decisions, and product mix decisions. We discuss each in turn. The important decisions in the development and marketing of individual products and services include decisions about product attributes, branding, packaging, labeling, and product support services. We will focus on each of them