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Chapter 10

MKC1200 - Chapter 10 (week 6 and 7).docx

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Dr Maya Mandery

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 personal consumption. 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 resellers Examples Toothpaste, chocolate Furniture, Rolex watches and Life Insurance household Porsche services and blood appliances donation. 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 product. 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 easy
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