Final Exam Notes Chapters 9-17, 19

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Management (MGM)
Tarun Dewan

304322 Chapter 9: Product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need *Products also include services, events, persons, places, organizations, ideas, or mixes of these 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 Product is a key element in the overall market offering. It may be a pure tangible good (at one extreme) or pure services (at the other extreme). In between, there are many different goods-and-services combinations. To differentiate offers beyond simply making products and delivering services, marketers are creating and managing customer experiences with their brands and companies. Companies that market experiences realize that customers are really buying much more than just products and services. They are buying what those offers will do for them. Levels of product and services include the following: Augmented product (delivery and credit, installation, warranty and after-sale service) Actual product (brand name, quality level, packaging, design and features) Core benefit (what is the buyer really buying?) When developing products, marketers first must identify the core customer value that consumers seek from the product. They must then design the actual product and find ways to augment it to create this customer value and the most satisfying customer experience. Products and services fall into two broad classes based on the types of consumers that use them consumer products and industrial products. Broadly defined, products also include other marketable entities such as experiences, organizations, persons, places and ideas. Consumer product: a product bought by final consumers for personal consumption They are classified in the following manner: Convenience products: a consumer product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort*They are usually low priced and marketers place them in many locations to make them readily available when customers need them Shopping product: a consumer product that the customer, in the process of selection and purchase, usually compares on such bases a suitability, quality, price and style *When buying these products, consumers spend much time and effort in gathering information and making comparisons. These marketers usually distribute their products through fewer outlets but provide deeper sales support to help customers in their comparison effects. Specialty product: a consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort *Buyers normally do not compare specialty products. They invest only the time needed to reach dealers carrying the wanted products. Unsought products: a consumer product that the consumer either does not know about or knows about but does not normally think of buying *Most major new innovations are unsought until the consumer becomes aware of them through advertising. By their very nature, unsought products require a lot of advertising, personal selling, and other marketing efforts. Industrial products include the following: Business product: a product bought by individuals and organizations for further processing or for use in conducting a business *The three groups of business products and services include materials and parts, capital items, and supplies and services. Materials and parts include raw materials and manufactured materials and parts. Raw materials consist of farm products and natural products. Manufactured materials and parts consist of component materials and component parts. Most manufactured materials and parts are sold directly to business users. Price and service are the major marketing factors; branding and advertising tend to be less important. Capital items are business products that aid in the buyers production or operations, including installations and accessory equipment. They have a shorter life than installations and simply aid in the production process. Supplies include operating supplies and repair and maintenance items. Supplies are the convenience products of the business field because they are usually purchased with a www.notesolution.comminimum of effort or comparison. Business services include maintenance and repair services and business advisory services. Such services are usually supplied under contract. The distinction between a consumer product and a business product is based on the purpose for which the product is bought. Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization. It is practiced by both profit and non-profit organizations. Business firms sponsor public relations or corporate image advertising campaigns to market themselves and polish their images. Person marketing consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people. The skilful use of marketing can turn a persons name into a powerhouse brand. Place marketing involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places. Ideas can also be marketed. In one sense, all marketing is the marketing of an idea. Social marketing: the use of commercial marketing concepts and tools in programs designed to influence individuals behavior to improve their well-being and that of society *Social Marketing Institute (SMI) encourages the use of a broad range of marketing tools, well beyond the promotional P of the marketing mix to include every other element to achieve its social change objectives. Product and service attributes include Product quality: the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs *It has a direct impact on product or service performance; thus, it is closely linked to customer value and satisfaction. In the narrowest sense, quality can be defined as freedom from defects. However, most-customer-centred companies go beyond and define quality in terms of creating customer value and satisfaction. The American Society for Quality defines quality as the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs. Similarly, Siemens defines quality this way: Quality is when our customers come back and our products dont. Total Quality Management (TQM) is an approach in which all the companys people are involved in constantly improving the quality of products, services, and business processes. Today, companies are taking a return on quality approach, viewing quality as an investment and holding quality efforts accountable for bottom-line results.
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