PRODUCT AND SERVICES MARKETING
Product – it is anything offered to the market for attention, acquisition, use or
consumption that might satisfy a need or a want.
Points of difference Goods Services
Definition It is anything physical offered It is an activity, benefit or satisfaction
to the market for attention, offered for sale that is essentially
acquisition, use or intangible and does not result in the
consumption that might ownership of anything.
satisfy a need or a want.
Tangibility It might be tangible in form. It is intangible but may consist of a few
tangible qualities to guarantee the quality
of the object.
Separability The good itself can be The service cannot be separated from the
separated from the producer provider.
of the good.
Perishability Most goods tend to remain in Services have to be used when they are
a good condition for some expected to be used. A flight ticket to
time at least for a few hours. Indonesia that is leaving at 6pm cannot be
used at 7pm.
Variability The goods produced are The services tend to have some variance
always same. Two mars bars in them depending on the situation. A
will always be the same. flight under good weather is always more
comfortable then a flight in bad weather.
PRODUCTS, SERVICES AND EXPERIENCES – most products are never completely
tangible or intangible. Almost all products contain a combination of both goods and
services. Getting a burger from McDonalds consists of getting the physical burger
and the service received at the counter.
LEVELS OF PRODUCTS
1) Core product – the core benefit that customers are actually purchasing while
buying the product. For Qantas, time critical transport is the core product.
2) Actual product – it refers to everything that is received when making the
purchase including the style, features, design, packaging etc. For Qantas, meals,
seat allocation, safety record and flight booking systems and other features
combine to provide the actual product.
3) Augmented product – it refers to the additional consumer services and benefit
that is built around the core and actual product. For Qantas, tours, frequent flyer
scheme, Qantas club and other customer related services form the augmented
product. PRODUCT CLASSIFICATIONS
1) Consumer products – they are products purchased by the final consumers for
Convenience Shopping Speciality Unsought
Consumer Low planning and High planning and Strong brand Little product
buying shopping effort, high shopping effort, preference, special awareness or
behaviour frequency, low low frequency, shopping effort, strong knowledge.
involvement product, heavy brand loyalty and price
little comparison. comparison. insensitivity.
Price Low Higher High Varies
Distribution Widespread distribution Selective Exclusive distribution in Varies
in convenient locations distribution in few outlets per market
fewer outlets area
Promotion Mass promotion by Advertising and More targeted Aggressive
producer personal selling promotion by advertising and
by producers and producers and resellers personal selling by
resellers producers and
Examples Toothpaste, chocolate Furniture, Rolex watches and Life Insurance
household Porsche services and blood
2) Industrial products. They are products purchased by the producers for resale or
further use in the production process.
a) Materials and parts – they are divided into raw materials including farms
products like fruits, vegetables and cotton and natural products like fish, crude
petroleum and timber and manufactured materials like iron, steel and
aluminium and parts like pulleys, casings etc.
b) Capital items – they include installations like buildings (offices) and fixed
equipment (generators) and accessory equipment include portable tools and
equipment (hand tools) and office equipment (desks, laptops).
c) Supplies and business services – supplies include operating supplies (pencils,
paper) and maintenance and repair supplies (nails, paint) and services
includes maintenance and repair services (plumbing, window cleaning) and
business advisory services (accounting, legal).
INDIVIDUAL PRODUCT AND SERVICE DECISIONS
1) Product attribute decisions
a) Product quality – it refers to the characteristics of the product which affect its
ability to satisfy a need or a want. The company needs to make the decision
on whether to provide a high quality good or a low quality good depending on
the costs of the product. b) Product features – it refers to the different features the product has. Whether
it is a basic model with no extra features or highly sophisticated and designed
c) Product design – it refers to the way the product is formed in style and
function. Whether the product design is complicated or easy to use, whether
it is stylish and trendy or just basic and whether it provides many functions or
just a few.
2) Branding – a name, term, sign, symbol or design that helps the consumers to
identify the product as different from competitors products. Every product in
recent times has a brand ranging from salt to chicken to clothes.
3) Packaging – it refers to the container or wrapper used to cover the product. It is
the designing and producing of a container or wrapper for the product. Previously
packaging was only to protect a product and needed to be changed probably
once in 15 years but now it is used for so many things like helping identify the
brand and needs to be changed at least once in 2-3 years. It must however be