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Lecture 6

MKTING Fund PRODUCT lecture 6.doc

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MANA 298
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WHAT IS A PRODUCT? “anything tangible or intangible that can be exchanged in a market (goods, services, ideas) for money or some other unit of value” Differences Between Goods and Services ♦Goods like sugar iron are tangible whereas services like insurance consultancy are intangible. The major distinguishing characteristics of services are: ♦Intangibility – major component of a service is intangible (cannot be touched or seen). ♦Perishability – many cannot be stored for future sales, ♦Inseparability – customer contact is often the integral part of the service. Mkting Fundamentals 1M Product - ♦Variability – in service quality, lack of consistency, when services are produced by people. Product Line: a group of closely related product items viewed as a unit because of marketing, technically or end use considerations eg upmarket or downmarket Product Mix: a set of all products and items that a particular seller offers for sale Dimensions of a Product Mix: ♦Product Depth How many variants are offered of each product line – eg crest with 3 sizes and 2 flavours, then product depth is 6 ♦Product Width Mkting Fundamentals 2M Product - The number of product lines a company offers eg toothpaste (3 types), soap (4 types), paper tissue (2 types). Product length – total no of items in mix – 9 as above Product differentiation Product differentiation is the process of creating and designing products so that consumers perceive the set of benefits and costs associated with them as different from competing products. Levels of Product 1. Core Product – You must first define what the core benefits the product will provide to the customer eg ticket to travel safely 2. Actual Product – You must then build the actual product around the core product. Features, design and Mkting Fundamentals M3 Product - attributes: eg regular flights,good seating arrangements, reliable 3. Augmented Product – offer additional consumer benefits and services – aftersales, guarantees, ad. benefits eg extras such as discounted travel insurance, free transport to and from airport, inflight entertainment CLASSIFICATION OF CONSUMER PRODUCTS  Shopping goods are goods for which the customer accepts to continue the search for more information in terms of suitability,style, quality, price. Eg furniture, clothing, cars  Non-shopping goods are good for which no further information is required and the decision for purchasing the product is already made. Further classifications Mkting Fundamentals 4M Product - • Convenience goods - frequently with min effort eg routine items like bread, toothpaste • Speciality goods eg designer label clothes, expensive perfume • Unsought goods eg life insurance, encyclopedias • Durable goods eg survive many uses eg clothes, fridge • Non durable goods eg beer, soap • Services Classification of Industrial or Business Goods Materials and parts • Raw Materials, Component part, Process materials Capital items Mkting Fundamentals 5M Product - • Major Equipment and machinery • Accessory Equipment: Word processors and tools • Consumable Supplies: Stationery, pencils, lubricating oils Supplies and Business Services Financial, legal, marketing research, consultancy, etc. PRODUCT LINE AND PRODUCT MIX Product Item: a specific version of a product. NEW PRODUCT DEVELOPMENT Seven phases to New Product Development 1.Idea Generation 2.Product Screening a
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