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ADMS 2200 Study Guide - Final Guide: Scotch Tape, Top 2000, Customer Service

Administrative Studies
Course Code
ADMS 2200
Elena Skliarenko
Study Guide

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Chapter 10
Marketers develop strategies to sell both tangible goods and intangible services
People buy want satisfaction, not objects
Product: Bundle of physical, service, and symbolic attributes designed to enhance buyers’ want satisfaction
Goods: Tangible products that customers can see, hear, smell, taste, or touch
Services: Intangible tasks that satisfy the needs of consumer and business users
Goods-Services continuum: device that helps marketers to visualize the differences and similarities between
goods and services
Pure Good: Car, Middle: Dinner in a Restaurant, Pure Service: Hair Salon
Characteristics that distinguish services from goods:
Frequent requirement of interaction between buyer and seller
Products often blur the distinction between goods and services
Example: Rental car company is a service that provides a good
Homeshoring: hiring workers to do jobs from their homes
Consumer products: Products destined for use by ultimate consumers
Business (or B2B) products: Products that contribute directly or indirectly to the output of other products for
resale; also called industrial or organizational products
Some products fall into both categories
Example: Prescription drugs, which are marketed to doctors and to end users
Classification of Consumer Products:
Convenience product Good or service that consumers want to purchase frequently, immediately, and
with minimal effort
Impulse goods and services―are
purchased on the spur of the moment (Magazines, Snack Foods)
Staples―are convenience goods and services that consumers constantly replenish to maintain a
ready inventory (Gasoline, Milk, Dry Cleaning)

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Emergency goods and services―are bought in response to unexpected and urgent needs
(Emergency vet visit, Plumbing repair kit, Asthma inhalers).
Shopping product: Good or service purchased only after the customer compares competing offerings
from competing vendors on such characteristics as price, quality, style, and color. (Flights
homogenous/Furniture Heterogeneous)
Typically cost more than convenience purchases
Include tangible items
Shopper lacks complete information and gathers information during the buying process
Specialty product: Good or service with unique characteristics that cause the buyer to value it and make
a special effort to obtain it (Lexus and Infiniti, Luxury Cars, Tax Attorney, Versace designer clothes)
Unsought product: Good or service marketed to consumers who may not yet recognized in the need for
it (Funeral plans, long-term health care insurance).
Classification of Business Products:
Installation: Major capital investment by a business buyer that typically involves expensive and
relatively long-lived products, such as a new factory or piece of heavy machinery (Bombardier airplanes,
Suburban office plaza, Oil drilling rig)
Accessory equipment: Capital product, usually less expensive and shorter-lived than installation (Canon
copiers, Steelcase office equipment, cell phones, computers)
Component parts and materials: Finished business products that become parts of buying firms’ final
products, such as spark plugs for new cars (Hewlett-Packard computer chips, truck bed, Honda motors
for lawn equipment, General Electric jet engines).
Raw materials: Business product, such as a farm product (wheat, cotton, soybeans) or natural product
(coal, lumber, iron ore) that become part of a final product
Supplies: Products that represent regular expenses necessary to carry out a firm’s daily operations but
are not part of the final product. Supplies are sometimes called MRO items
MRO items: Business supplies categorized as maintenance items, repair items, or operating
supplies such as light bulbs, nuts and bolts used in repairing equipment, or pencils (Staples,
Scotch tape, Xerox copy paper, post-its).
Business services: Intangible product purchased to facilitate a firm’s production and operating processes
such as financial services, leasing of vehicles, legal advice and consulting, security services.
Quality as a Product Strategy:
Total quality management (TQM): Approach that involves all employees in continually improving products and
work processes to achieve customer satisfaction and world-class performance
ISO 9002: Set of standards for quality management and quality assurance developed by the International
Standards Organization in Switzerland for countries in the European Union

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Benchmarking: Purpose is to achieve superior performance that results in a competitive advantage.
Quality as a Service Strategy:
Service encounter―point at which customer and service provider interact, which usually determines the
customer’s perception of the quality of service.
Service quality―expected and perceived quality of a service offering
Determined by five variables:
Product line Series of related products offered by one company
Desire to Grow
Growth potential limited if company focuses on a single product
Example: Roots began selling a single style of shoes but has grown by selling a variety of
Enhance company’s position in the marketplace
Entire lines of products make a company more important to consumers and marketing
Make optimal use of company resources
Spreading operations costs over a series of product lines reduces the average
production and marketing costs of each product
Product mix Assortment of product lines and individual offerings
Product width―the number of product lines offered
Product length―the number of different products a firm sells
Product depth―variations in each product that a firm markets in its mix
Line extension Adding individual offerings that
appeal to different market segments while remaining closely related to the existing product line
Product life cycle: Progression of a product through introduction, growth, maturity, and decline stages
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