By Mark Liangco | BUS 343
Chapter 7 (Week 6)
- A product is everything that a customer receives in exchange.
Three layers of a product
1. Core product
- Benefits the product will provide for consumers.
- Dove soap has moisturizing cream
2. Actual product
- The physical good that supplies the above benefits.
- How easy is it to use, how foamy it is.
3. Augmented product
- The additions attached to the actual product
- Actual product + packaging, branding, warranty etc.
- Including a service with the purchase of a tangible good (i.e. warranty)
New product development:
1. Visionary phase - idea generation, product concept screening, business analysis.
2. Planning and development phase - plan commercial and technical development.
3. Testing and improving phase - test marketing plan, marketing mix adjustments, launch product.
Classifying Products based on how long they last:
1) Durable Goods – Consumer products that provide benefit over a period of time
- Cars, computers, furniture etc
2) Nondurable Goods – Consumers products that provide benefit for a short time because they are
consumed and are no longer useful.
- Food, newspaper
Classifying Products based on shopping behavior
1) Convenience Products – usually low prices, widely available and purchased frequently.
o Staple, basic necessities
consumers do not perceive much different between brands, SUGAR, BREAD
o Impulse product, people often buy on the spur of the moment
Usually because it looks interesting E.G., MAGAZINE.
o Emergency product - purchased when customer is in dire need.
2) Shopping Product - consumers spend time and effort gathering information and comparing alternatives
before making a purchase.
o Laptops etc
3) Specialty product: usually has unique characteristics and small markets, is important to the buyer, and not
o Bungee jumping
4) Unsought product - little awareness/interest until need for this product arises.
Levels of involvement with these products will tend to increase as the value of the good increases. By Mark Liangco | BUS 343
- A product that consumers perceive to be new and different from existing products.
Why do most companies need to innovate?
- At the broadest level, to remain competitive, not get left behind
o To keep up with new technology
o To follow changing consumer preferences
o To replace dying products
o To diversify its product offering and lower risk
Types of Innovation