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CHAPTER 7 343.docx

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Simon Fraser University
Business Administration
BUS 343
Jason Ho

CHAPTER 7- Create the Product 1) Articulate the value proposition: - The value proposition is the consumer’s perception of the benefits they will receive if they buy a good or service - Marketers tasks: 1-creates a better value than what’s out there already 2- convince customers that this is true. -Good: a tangible product that we can see touch, smell, hear or taste -Intangibles: experience-based products. - Product is as a bundle of attributes: include features, functions, benefits, and uses of a product. Marketers view products as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical good 2)Layers of the Product Three distinct layers of the product( see figure 7.1 pg.223) 1. The core product: All the benefits the product will provide for consumers or business customers - Marketing is about supplying benefits not attributes 2. The actual product: The physical good or the delivered service that supplies the desired benefit 3. The augmented product: the actual product plus other supporting features such as a warranty, credit, delivery, installation, and repair service after the sale 3) Describe how marketers classify product Marketers classify products into categories, bcuz they represent differences in how consumers and business customers fell about products and how the purchase different products.  How long products do lasts? - Durable goods : Consumer products that provide benefits over a long period of time , such as cars, furniture, and appliances. - Nondurable goods: Consumer products that provide benefits for a short time because they are consumed (such as food) or are no longer useful(such as newspaper)  How do consumers buy products? See figure 7.2 pg 226 - Convenience product: A consumer good or service that is usually low priced, widely available, and purchased frequently with a minimum of comparison and effort.* nondurable - Several types of convenience products:  Staples: Basic or necessary items that are available almost everywhere.*make sure it is available and price is comparable to competition’s prices.  Impulse products: A product people often buy on the spur of the moment.* should be highly visible and package design that entice people.  Emergency products: Products we purchase when we’re in dire need.  Shopping products: Goods or services for which consumers spend considerable time and effort gathering info and comparing alternatives before making a purchase. - Intelligent Agent or shopbots: computer programs that find sites selling a particular product. - Specialty products: Goods or services that have unique characteristics and are important to the buyer and for which she will devote significant effort to acquire.* a lot of effort to choose - Unsought products: Goods or services for which a consumer has little awareness or interest until the product or a need for the product is brought to her attention.  How Do Businesses Buy Products? Again See figure 7.2 pg 226 - Marketers classify business-to-business products based on how organizations customers use them. - Five different types of business-to-business products:  Equipment: Expensive goods, which last for a long time, that an organization uses in its daily operations. a. Heavy, installation and capital equipment: last longer b. Light or accessory equipment : shorter life and cost less  Maintenance, repair, and operating (MRO) products: goods that a business customer consumes in a relatively short time.  Raw material: Products of the fishing, lumber, agricultural and mining industries that organizational customers purchase to use in their finished products.  Processed materials: Products created when firms transform raw materials from their original state  Component parts: Manufactured goods or subassemblies of finished items that organizations need to complete their own products. 4) Understand the importance of services as products - consider some of the challenges and opportunities that face marketers whose primary offerings are intangible - discuss services, a type of intangible that also happens to be the fastest-growth sector in our economy  What is a Service? Are acts , efforts, or performances exchanged from producer to user without ownership rights. It satisfies needs when it provides pleasures, info or convenience. It has grown rapidly bcuz more cost effective to hire outside firm that specialize in service than workforce to handle the task.  Characteristics of services - All services share four characteristics:  Intangibility : The characteristic of a service that means customers can’t see, touch or smell good service o Overcome the problem of intangibility by providing physical cues to reassure the buyer. Like the look of facility, logo.  Perishability : The characteristic of a service that makes it impossible to store for later sale or consumption o Capacity management: the process by which organization adjust their offerings in an attempt to match demand.*reduce price to increase demand for otherwise unsold service  Variability: The characteristic of a service that means that even the same service performed by the same individual for the same customer can vary.  Inseparatability: The characteristic of a service that means that it is impossible to separate the production of a service from the consumption of that service. o Service encounter : The actual interaction between the customer and the service provider o Disintermediation: a service that requires the customer to obtain an outcome without the intervention of a human provider.* to minimize the potentially negative effects of bad service and save on labor cost  The Service Encounter Occurs when the customer comes into contact with the organization - Service encounter dimensions:  Social contract dimension is one person interacting with another person. “ the moment of truth” it is the employee who of the determines if customer will come away positive or negative impression on service.  The customer also plays a part in the type of experience that results from a service encounter.  How We Classify Services - See figure 7.1 pg 233 for classification of services by inputs and tangibility - See figure 7..4 pg 234 for the service continuum, which is tangible and which is not. - Goods-Dominated Products* provide supports - Equipments or Facilitate-based services. *Like restaurant (preparation of food and delivery of food) rely on expensive equipments and facilities.  Operational Factors: clear signs and other guidelines must show customers how to use the service  Locational factors: services make sure their service sites are convenient to prospective customers  Environmental Factors: create attractive environment to lure customers - People-based services.*hire people to do our work  Core and Augmented Services - Core service: The basic benefit of having a service performed - Augmented services: the core service plus additional services provided to enhance value  Physical Elements of the service Encounter: Servicescapes and other Tangibles. - Servicescape :The actual physical facility where the service is performed , delivered, and consumed.* Physical evidence - Search Engine Optimization (SEO) : A systematic process of ensuring that your firm comes up at or near the top of lists of typical search phrases related to you business.  How We Provide Quality Service Ensure that customers are satisfied with what they have pa
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