1. Marketing Management Dawn Iacobucci
© 2010 South-Western, a part of Cengage Learning

2. Products: Good & Services
Chapter 5

3. What is a Product? A product is anything that can be offered to a
market to satisfy a want or need, including
physical goods, services, experiences,
events, persons, places, properties,
organizations, information, and ideas.

4. What is a Product? (continued)
The term product can refer to
the full product profile (4Ps)
part of the customer-company exchange
Company 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 answers
value, quality, specific features and benefits, etc.
What the firm is well-suited offer

6. Relationship Marketing
Successful exchanges can lead to loyalty and satisfaction
Marketers benefit from turning short-term exchanges into long-term customer relationships

7. Discussion Question
Can you explain the statement, “It costs six times more to get a new customer than to retain a current customer?”

8. Goods Service Continuum

9. Tangibility Services are more intangible than goods
Pure goods are tangible
socks
Pure service are intangible
medical procedure
A mix has tangible and intangible components
rental cars

10. Search, Experience, Credence
Search Qualities
May be evaluated prior to purchase
socks
Experience Qualities
Require trial or consumption before evaluation
restaurants
Credence Qualities
Difficult to judge even post-consumption
medical procedures

11. Search, Experience, Credence
Goods are dominated by search and experience qualities
Services are dominated by experience and credence qualities
Many services are mostly intangible; thus, marketers need to signal quality to customers through marketing actions

12. Perishability & Inseparability
Services are simultaneously produced and consumed
Perishability: Services are more perishable than goods
Marketers must try to even out demand
Inseparability: 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 customer
Self-service and equipment can decrease variability
Try to reduce bad variability
Errors in the system
Try to improve good variability
Customization for customers’ unique needs

14. Goods & Services
Differences between goods and services influence business decisions
Advertising, branding, pricing, logistics, etc.
Thinking beyond traditional services…
Professional services
Purchase experiences
On-line shopping

15. Beyond Traditional Services
In some purchases, customers purchase the whole “experience”
Museums, NikeTown, Volkswagen’s Transparent Factory
Online purchases are a mix of goods and service
Understanding implications of this mix are important

16. Core vs. Value Added Core is essential to the product offering
Value-added is supplemental
Can utilize value-added to differentiate

17. Satisfaction Core elements are expected by customers
If core elements are substandard, dissatisfaction can be triggered
Marketers can affect level of dis/satisfaction through value-addeds
For example, luxurious rooms may lead to high satisfaction

18. Defining Core Elements
Focus on the benefits and value being offered not just the product offerings
Do not define elements too broadly

19. Dynamic Strategies
Core businesses might change as the industry changes or as the firm’s competencies change
Ask…
What business are we in?
What benefits do we want to provide to the consumer?
Who is our competition?

20. Dynamic Strategies
Define competition broadly

21. Dynamic Strategies-Corporate
Focus on a firm’s core strengths
Pepsi acquired restaurants then divested to focus on core strengths

22. Product Mix Product mix Breadth Depth A company’s product lines
Number of product lines
Depth
Number of products in a line

23. Discussion Questions Which company has the most depth?
Which company has the most breadth?

24. Product Line Strategies

25. Discussion Question
Which strategy below does your university current utilize? Explain.

26. Study Question 1
The three kinds of products are _____ shopping and specialty purchases.
a. promotion
b. simple
c. quality
d. convenience D

27. Study Question 2
Julia 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. shopping
b. specialty
c. destination
d. convenience D

28. Study Question 3
With _____ purchases, you expect your customers to be somewhat more price sensitive.
a. quality
b. lower involvement
c. high involvement
d. brand B

29. Which of the following are pure goods?
Study Question 4
Which of the following are pure goods?
a. rock concerts
b. sporting events
c. DVDs
d. consulting C

30. Study Question 5
_____ attributes are those that require some trial or consumption before evaluation.
a. Search
b. Credence
c. Product
d. Experience D

31. Video D