Chapter 9 - Product and Service Strategies

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York University
Administrative Studies
ADMS 2200
Richard Patterson

Chapter Nine Notes Overview We now have to focus on the marketing mix, the four elements of a marketing strategy – product, distribution, promotion and price – to satisfy the target market. We focus on how firms select and develop the goods and services they offer, starting with planning which products to offer. Marketers develop strategies to promote both tangible goods and intangible services. Any such strategy begins with investigation, analysis and a selection of a particular target market, and it continues with the creation of a marketing mix designed to satisfy that segment. What are goods and services? Marketers think of a product as a compilation of package design and labelling, brand name, price, availability, warranty, reputation, image and customer service activities that add value for the customer. Product – bundle of physical, service, and symbolic attributes designed to satisfy a consumer’s wants and needs. Service – an intangible task that satisfies the needs of consumer and business users. Good – Tangible products that customers can see, hear, smell, taste, or touch. Goods-services continuum – is a spectrum along which goods and services fall according to their attributes, from pure good to pure service. Services can be distinguished from goods in several ways: 1. Services are intangible 2. Services are inseparable from the service providers 3. Services are perishable 4. Companies cannot easily standardize services 5. Buyers often play important roles in the creation and distribution of services 6. Service standards show wide variations Classifying goods and services in the markets B2C product- is a product destined for use by ultimate consumers. B2B product – is a product that contributes directly or indirectly to the output of other products for resale; also called industrial or organizational product. Unsought products – are products that are marketed to consumers who may not yet recognize a need for them. Convenience products – refer to goods and services that consumers want to purchase frequently, immediately, and with minimal effort. Shopping products are products that consumers purchase after comparing competing offerings. Specialty products are products that offer unique characteristics that cause buyers to prize those particular brands. Impulse goods and services are products purchased on the spur of the moment. Staples are convenience goods that consumers constantly replenish to maintain a ready inventory. Emergency goods and services are bought in response to unexpected and urgent needs. Types of business products Business buyers are professional customers. Their job duties require rational, cost-effective purchase decisions. The classification system for business products emphasizes product uses rather than customer buying behaviour. Installations – business products like factories, assembly lines, and huge machinery that are major capital investments. Accessory equipment – capital items like desktop computers and printers that typically cost less and last for shorter periods of time than in
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