1. Unit 3 The Marketing Mix – Product, Price & Place
Ch10

2. What Is a Product? The product is the primary P of the marketing mix.
Without a product, you do not need the other Ps (price, place, promotion)

3. Types of Products Products are usually grouped into two categories.
Consumer products
sold to customers for personal use
Business products
sold to businesses for business use
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4. Types of Products
Products can also be described as tangible or intangible.
Tangible
something that exists physically and can be touched
goods are tangible
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5. Types of Products Intangible
something that exists, but is not physical and cannot be touched
services and ideas are intangible

6. Product Benefit
The product is whatever the business sells to satisfy customer needs.
The product can be a good, service or an idea
The need-satisfying quality of a product is called a product benefit.

7. The Service Economy
A service economy is an economy in which most of the GDP (Gross Domestic Output) comes from services and most of the workers have jobs in services.
Services account for about 78 percent of GDP in the Canada.

8. Characteristics of Services
Services are different from goods in four ways. Services are
intangible
inseparable
variable
perishable

9. Characteristics of Services
Description
Example
Intangible
Cannot be touched or tried out before purchase
Concert, cellphone service, insurance
Inseparable
Production of the service cannot be separated from the use of the service.
A haircut does not exist without the hairdresser
Variable
Only exists once and is never exactly repeated in the same way – may lead to quality control issue
Different hairdressers may give different quality haircuts
Perishable
Cannot be stored for later use -some goods are perishable, but most can be stored until needed.
unsold concert tickets cannot be stored and sold at a later time

10. The Good-Service Continuum
Many products are combinations of good and service.
Example: a restaurant meal is a combination of good and service
the food itself is a good
the preparation and serving of the food is a service

11. The Good-Service Continuum
Pure Goods
Pure Services
Soap Books
Restaurant Meal Cellphone
Tutoring Concert
Legend
Amount of goods
Amount of services

12. Product Elements
The elements of a product can be grouped into four categories.
basic product
usage
protection
name
Product elements can be changed to meet customers’ needs.
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14. Basic Product
When you decide which product to sell, you need to make basic product decisions about
quality
features
options

15. Quality What is quality? Level of excellence in something
Premium quality - highest price
Moderate quality - moderate price
Value quality - lowest price with the best possible quality at that price
During product development, decide on the quality of the product with the target market in mind.
The level of quality will affect the cost to produce the product and therefore its price.

16. Features
Option
For a good: a physical characteristic of the good
For a service: one of the tasks that will be done
A feature that can be added to a product at the customer’s request

17. Usage
Part of the product decision is how to help the customer make the best use of the product.
Product elements that help the customer with product usage:
instructions
installation
technical support

18. Protection
Protection consists of product elements that protect the product from harm, both before and after purchase:
packaging
warranties
maintenance and repair services

19. Packaging Packaging functions “face” of the product
a very important part of product promotion
often is the first thing that attracts a customer
part of product identity
provides product information & instructions
protect a product from damage until the customer is ready to use it
make products easier to stack on a display
discourage theft
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20. Canadian Labelling Requirements
False or misleading packaging is against the law.
Most packaged foods require an ingredient list.
Labelling must appear in English and French.
Product must be clearly identified.
Quantity of product must be expressed in units of volume (1L, 25 pieces).
Product must include manufacturer and dealer’s name and address.

21. Warranties and Guarantees
To convince customers of the quality and reliability of their products, marketers provide
warranties
guarantees

22. Warranties & Guarantees
Warranty
Guarantees
Written document
Assures customers of the quality and reliability of a product
Promises to correct certain problems should they occur
Promise that a product has a certain quality or will provide satisfaction
Generally used in promotions

23. Maintenance and Repair Services
Complex machines often require regular maintenance.
the availability of these services may affect the customer’s buying decision

24. Name Name a critical part of a product includes product name
brand name
product “personality”

25. Product Strategy Product strategy
all of the decisions made about a product
starts with the decision about which product to offer - then makes decisions about product elements, keeping the target market in mind
distinguishes your product from the competitors
must balance meeting customers’ needs and beating competition with costs of production and marketing