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Marketing SummaryChapter 7: Product strategy and services
marketing
Product= combination of tangible/ intangible characteristics that enable an object/ service to
satisfy a need. Also: bundle of benefits to purchaser.
3 product levels by Philip Kotler:
1. Core product/ core benefit: basic function/ problem- solving benefits that a consumer is
seeking in the exchange.
2. Actual product: developing the core product
3. Augmented product: intangible, psychological benefits and service- based features that
make the total product more attractive: delivery within 24 hours, free installation.
Classifying products:
Consumer goods/ consumer products
To individuals and families> ultimate consumers / end users
Business products
To organizations> resell/ use them to make products
Consumer goods
4 categories by Melvin Copeland
1. Convenience products: frequent, immediate, minimum shopping effort
Staples/ fast moving consumer goods> bread
Impulse goods> no planning> gum
Emergency goods> umbrella
2. Shopping products: comparing prices and visiting several stores before purchasing.
Limited or extensive problem solving.
Homogeneous/ Heterogeneous
3. Specialty products: Items/ services for which consumers are willing to make a special
effort to acquire: high involvement, brand loyalty high.
4. Unsought products: consumers are unaware of the product or don’t know they need
it. Insurance, encyclopedias, new products (before advertising)
Durable consumer goods/ durables= used repeatedly over an extended period: dishwashers.
Non- durable consumer products/ nondurables= short life cycle: clothing.
Fast moving consumer goods= if they are consumed: drinks/ shampoo.
Product Life Cycle (PLC)
1. Introduction Phase
Consumers don’t know product yet> advertising!
No competition> stimulate primary demand> convincing target market of usage
Competition> stimulate selective demand> demand for its own brand
2. Rapid growth
Fastest growth, word-of-mouth communication, demand high, new competitors enter
3. Turbulence
Less quick growth, maximum penetration ratio, battle for market share, pressure on
prices, profits go down, brand loyalty, increased product use by current customers
only potential growth
4. Maturity
Declining sales, primary goal: defend market share against competition, look for
product modifications, company takeovers and mergers
, 5. Decline
Changes in the environment, less sales, higher costs, ‘milk’ the product, retrenchment
strategy= competitors will leave the market, so that other firms can continue. Harvest
strategy= keeping product to meet customers’ needs but reducing marketing costs.
3 levels of the product’s sales analysis:
Product category/ product class: all product lines/ group of products (substitutes)
Product type/ form: variation within the product class
Brand
Market stretching: stretching maturity stage:
1. Stimulate more frequent use
2. Tap new markets
3. Suggest alternate uses for the product
Envelope curve/ scalloped pattern= if a company manages to extend the life cycle before
product sales start to decline.
Cycle- pattern= if a company adopts a strategy of recycling
Product mix= total assortment of products/ services that company sells
• Product quality=
Collection of attributes and features of a product/ service that influence its ability to
meet customers’ stated/ implied needs, wants and expectations. Six sigma= quality
management system designed to achieve near- perfect quality level.
1. Technical quality
Product’s dependability and durability.
2. Consumer quality
Overall characteristics of a product that are important to consumers and that allow
it to perform as expected in satisfying customer needs.
• Product warranty
Warranty= written statement of what a seller promises to do if a product turns out to
be defective/ fails to perform properly within a certain period after being purchased.
• Product guarantee
Guarantee= assurance product is as represented and that it will provide the expected
performance. Can be expressed (written) or implied (suggested by statements).
• Satisfiers versus Dissatisfiers
Satisfiers= elements of a product that significantly improve its quality and are major
reasons to buy the product. Satisfiers often turn into dissatisfiers= feature’s absence
from a product will be a reason for consumers not to choose that brand.
Customer service= every form of assistance before, during and after the purchase that
makes it easier for customers to buy and use the product and increases the likelihood of
repeat purchases, provided by a company to differentiate its products from competitive
offerings and to build long- term relationships with its clients.
Product line= group closely related items in the organization’s assortment/ product mix.
Product type/ article/ product item= individual product/ specific version of a service that
differs from other types of the same product because of certain attributes.
Dimensions of the product mix:
1. Width of the assortment/ product mix width
Number of product lines that a company sells. More lines= wider product mix.
2. Length of the assortment/ product line length
Total number of articles that company offers within all of its lines.
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