BUAD100 Lecture Notes - Lecture 4: Tax Preparation In The United States, Video Lesson, Intangibility

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Video Lecture: Product Management
What is a product?
- Anything that can be offered to a market for attention, acquisition, use, or consumption
and that might satisfy a want or need
- Include physical objects, services, events, persons, places, organizations, ideas, or some
combination
- A product is a set of benefits
Service
- Any activity or benefit that one party can offer to another that is essentially intangible
and does not result in the ownership of anything
- Services include: hair styling, tax preparation, air travel, and banking
Service Characteristics:
- Intangibility: services cannot be seen, tasted, felt, heard, or smelled before purchase
- Inseparability: services cannot be separated from their providers
- Perishability: services cannot be stored for later sale or use
- Variability: quality of services depends on who provides them and when, where and
how.
- Product / service continuum (e.g. restaurant meal)
- Creating and managing customer experiences differentiates marketing offers from the
competition
Types of consumer products:
- Convience goods
- Shopping products
- Specialty products
- Unsought products
- Differ on: price, search behavior, promotion, distribution
What is a brand?
- Formally (legal): proprietary trademark for a specific product or service
- In marketing: “contract” between the company and customers
- “a brand is no longer what we tell the consumer it is it is what a consumers tell each
other it is.”
Brand Equity
- the positive differential effect that knowing the brand name has on customer response
to the product or service.
o Brands are assets that…
Facilitate purchasing
Establish loyalty
Impact market value
Protect from competition
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Reduce marketing costs
Logos are Part of Branding:
- Logos are easily recognizable symbols, signs, or stylized written portrayals of business
brand names. Logos provide a short-cut to product and firm identification
Product Decisions
- Product line: a group of products that are closely related because they function in a
similar manner, are sold to the same customer groups, are marketed through the same
types of outlets, or fall within given price ranges.
- Product mix/ product portfolio: the set of all the product lines and items that a
particular seller offers for sale.
- Co branding: marketing two or more brands together, on the same package or
promotion
Video Lecture: New Product Development
What is a New Product?
- Newness from the organization’s perspective
- Newness from the consumer’s perspective
New Product Development
- Development or original products, product improvements, product modifications, and
new brands
- Strategy: new products can be obtained via acquisition or new-product development
- New product development is very expensive and very risky
o Products fail for many reasons
Innovation:
- Process by which ideas are transformed into a new products and services that will help
firms grow
- Adding new products:
o Firms can create and deliver value more effectively by satisfying changing needs
of current or new customers
o Keeping customers from getting bored with current products
- Diversify risk
- Continuum from “new to the world” to “slightly repositioned”
- First mover advantage
Factors Affecting Product Diffusion
- Compatibility: is it compatible with people’s past behavior, needs, values?
- Relative advantage: is it better than substitutes?
- Observability: is product easily observed and can benefits or used be easily
communicated to others?
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