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WHAT IS A PRODUCT?
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
anything.
An experience represents what buying the product or service will do for the
customer.
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
brands.
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
benefits.
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
Parts
Raw materials
Capital items
Manufactured
materials and parts
Farm Products
Component
materials (cotton,
fruit)
Natural Products
Component parts
(motors, tyres)
Suppliers and
services
Instalation (fixed
equipament)
Operating supplies
Accessory
(variable
equipament)
Maintenance,
repair and advisory
services
1. Product attributes
Product quality
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.
Intangibility
Inseparability
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.
Variability
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.
Perishability
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.
BRANDING STRATEGY: BUILDING STRONG BRANDS
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
performance.
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
benefit;
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
buyers.
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
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;