Chapter Eight - Creating the Product
Layers of a Product
Core Product: Basic Benefits Actual Product: Features, Package, Brand, Quality, Appearance Augmented Product: Warranty, Repair/maintenance service after the sale installation, customer support service, credit, use instruction
How Marketers Classify Products
o How long products last : Durable goods : Nondurable goods o How consumers buy products : Where & how consumers buy the product : Classification based on use: : Convenience products -> frequently purchased : Shopping products -> considerable time and effort Specialty products -> unique characteristics important to buyers at almost any price : Unsought products -> consumers have little interest until a need arises How businesses buy products
Consumer
Business
Convenience Products
Equipment
Maintenance Repair and Operating (MRO)
Shopping Products
Specialty Products
Raw Materials
Processed Materials and Special Services
Unsought Products
Component Parts
Equipment: Installations & Accessories
Specialized Services
Processed Materials
Business Product Classes
MRO Supplies
Raw Materials
Component Parts and Materials
Service
Services are acts, efforts, or performances exchanged from producer to user without ownership rights - Consumer servies . Business services
Characteristics of Services
: Intangibility Services cannot be inventoried Services cannot be patented (service marks protect the name but not the service) Services cannot be readily displayed or communicated - Pricing is difficult Perishability o Difficult to synchronise supply and demand with services . Services cannot be returned or resold * Variability - Service delivery and customer satisfaction depend on employee actions - Service quality depends on many uncontrollable factors o There is no sure knowledge that the service delivered matches what was planned and promoted : Inseparability Customers participate in and affect the transaction - Customers affect each other . Employees affect the service outcome . Decentralisation may be essential - Mass production is difficult
New Products
: What is a new product? - FTC: entirely new or changed significantly and that product may be called new for only six months - Marketing perspective: new is anything a customer perceives as new and different Phases in New Product Development 1. Idea Generation 2. Product Concept Development and Screening 3. Marketing Strategy Development 4. Business Analysis 5. Technical Development 6. Test Marketing 7. Commercialisation
Types of Innovations
Innovations differ in their degree of newness and this helps to determine how quickly products will be adopted by a target market The more novel the innovation, the slower the consumer adoption process Innovation continuum is based on the amount of disruption or change in technology to manufacture and/or for consumers to change behaviour to use
Discontinuous
Behavioral Change Continuous
Dynamically Continuous
Technological