3 What is a Product? A product is anything that can be offered to a market to satisfy a want or need, includingphysical goods, services, experiences,events, persons, places, properties,organizations, information, and ideas.
4 What is a Product? (continued) The term product can refer tothe full product profile (4Ps)part of the customer-company exchangeCompany offers something (a flight), and the customer offers something in return (payment)
5 Exchange Find profitable intersection between What customers want Utilize marketing research to find answersvalue, quality, specific features and benefits, etc.What the firm is well-suited offer
6 Relationship Marketing Successful exchanges can lead to loyalty and satisfactionMarketers benefit from turning short-term exchanges into long-term customer relationships
7 Discussion QuestionCan you explain the statement, “It costs six times more to get a new customer than to retain a current customer?”
9 Tangibility Services are more intangible than goods Pure goods are tangiblesocksPure service are intangiblemedical procedureA mix has tangible and intangible componentsrental cars
10 Search, Experience, Credence Search QualitiesMay be evaluated prior to purchasesocksExperience QualitiesRequire trial or consumption before evaluationrestaurantsCredence QualitiesDifficult to judge even post-consumptionmedical procedures
11 Search, Experience, Credence Goods are dominated by search and experience qualitiesServices are dominated by experience and credence qualitiesMany services are mostly intangible; thus, marketers need to signal quality to customers through marketing actions
12 Perishability & Inseparability Services are simultaneously produced and consumedPerishability: Services are more perishable than goodsMarketers must try to even out demandInseparability: Services are more impacted by the interaction between the service provider and the customer than goods
13 Variability Services are more variable than goods Due to changing needs, abilities, etc. of the service provider and customerSelf-service and equipment can decrease variabilityTry to reduce bad variabilityErrors in the systemTry to improve good variabilityCustomization for customers’ unique needs
14 Goods & ServicesDifferences between goods and services influence business decisionsAdvertising, branding, pricing, logistics, etc.Thinking beyond traditional services…Professional servicesPurchase experiencesOn-line shopping
15 Beyond Traditional Services In some purchases, customers purchase the whole “experience”Museums, NikeTown, Volkswagen’s Transparent FactoryOnline purchases are a mix of goods and serviceUnderstanding implications of this mix are important
16 Core vs. Value Added Core is essential to the product offering Value-added is supplementalCan utilize value-added to differentiate
17 Satisfaction Core elements are expected by customers If core elements are substandard, dissatisfaction can be triggeredMarketers can affect level of dis/satisfaction through value-addedsFor example, luxurious rooms may lead to high satisfaction
18 Defining Core Elements Focus on the benefits and value being offered not just the product offeringsDo not define elements too broadly
19 Dynamic StrategiesCore businesses might change as the industry changes or as the firm’s competencies changeAsk…What business are we in?What benefits do we want to provide to the consumer?Who is our competition?
25 Discussion QuestionWhich strategy below does your university current utilize? Explain.
26 Study Question 1The three kinds of products are _____ shopping and specialty purchases.a. promotionb. simplec. qualityd. convenienceD
27 Study Question 2Julia is at her local grocery store for her weekly shopping and grabs a three-pack of toothpaste. There is still another tube left in her medicine cabinet but she doesn’t want to run out and is afraid she will forget to purchase it later. Julia’s purchase is a _____ purchase.a. shoppingb. specialtyc. destinationd. convenienceD
28 Study Question 3With _____ purchases, you expect your customers to be somewhat more price sensitive.a. qualityb. lower involvementc. high involvementd. brandB
29 Which of the following are pure goods? Study Question 4Which of the following are pure goods?a. rock concertsb. sporting eventsc. DVDsd. consultingC
30 Study Question 5_____ attributes are those that require some trial or consumption before evaluation.a. Searchb. Credencec. Productd. ExperienceD