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ch. 13 mkt strategy
Terms in this set (47)
Made up of 5 product levels
The fundamental level is core benefit: the service or benefit the customer is really buying.
At the second level, marketer must turn the core benefit into a basic product.
At the third level, the marketer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase this product.
At the fourth level, the marketer prepares an augmented product that exceeds customer expectations. In developed countries, brand positioning and competition take place at this level.
At the fifth level stands the potential product, which encompasses all the possible augmentation and transformations the product or offering might undergo in the future. Here companies search for new ways to satisfy customers and distinguish their offering.
Are tangible goods normally consumed in one or a few uses, such as beer and shampoo. Because these goods are purchased frequently, the appropriate strategy is to make them available in many locations, charge only a small markup, and advertise heavily to induce trail and build preference.
Are tangible goods that normally survive many uses; refrigerators, machine tools, and clothing. They normally require more personal selling and services, command a higher margin, and require more seller guarantees
Are intangible, inseparable, variable, and perishable products that normally require more quality control, supplier credibility, and adaptability.
Frequently, immediately, and with minimal effort these goods are purchased.
Are those the consumer characteristically compares on such bases as suitability, quality, price, and style.
Have unique characteristics or brand identifications for which enough buyers are willing to make a special purchasing effort.
Are those the consumer does not know about or normally think of buying, such as smoke detectors.
are long lasting goods that facilitate developing or managing the finished product. they fall into two groups. Installations and Equipment.
Are major purchases they are usually bought directly from the producer, whose sales force includes technical staff, and a long negotiation precedes the typical sale. Producers must be willing to design to specification and supply postsale services. Advertising is much less important than personal selling.
Includes portable factory equipment and tools and office equipment. These types of equipment don't become part of a finished good product. They have a shorter life than installations but a longer life than operating supplies. Although some manufacturers sell direct, more often they use intermediaries because the market is geographically dispersed, buyers are numerous, and orders are small. Sales force tends to be more important than advertising but advertising can be used effectively.
Supplies and business services
Are short term goods and services that facilitate developing or managing the finished product. Supplies are of two kinds: maintenance and repair items and operating supplies. They are purchased with minimum effort on a straight rebuy basis, they are normally marketed through intermediaries.
Form, Features, performance quality
The size, shape, or physical structure of a product. Consider the many possible forms of aspirin. Although essentially a commodity, it can be differentiated by dosage, size, shape, color, coating, or action time.
That supplement their basic function. A company can identify and select appropriate new features by surveying recent buyers and then calculating customer value versus company cost for each potential future. Marketers should consider how many people want each feature, how long it would take to introduce it, and whether competitors could easily copy it.
Is the level at which the products primary characteristics operate. Quality is growing increasingly important for differentiation as companies adopt a value model and provide higher quality for less money. Firms should design a performance level appropriate to the target market and competition, however, not necessarily the highest level possible. They must also manage performance quality through time. continuously improving the product can produce high returns and market share; failing to do so can have a negative consequences.
The degree to which all produced units are identical and meet promised specifications. Suppose a Porsche 911 is designed to accelerate to 60 miles per hour within 10 seconds. If every Porsche 911 coming off the assembly line does this, the model is said to have high conformance quality.
A measure of the products expected operating life under natural or stressful conditions, is a valued attribute for vehicles, kitchen appliances, and other durable goods.
Is a measure of the probability that a product will not malfunction or fail within a specified time period.
the ease of fixing a product when it malfunctions or fails.
Describes the products look and feel to the buyer and creates distinctiveness that is hard to copy.
Ordering ease, delivery, installation, customer training, customer consulting, maintenance and repair, and return.
Refers to how easy it is for the customer to place an order with the company
Refers to how well the product or service is brought to the customer, including speed, accuracy, and care throughout the process.
Refers to the work done to make a product operational in its planned location.
Helps the customers employees use the vendors equipment properly and efficiently, general electric not only sells and installs expensive x-ray equipment in hospitals, it also gives users extensive training.
Includes data, information systems, and advices services the seller offers to buy.
Maintenance and repair
Programs help customers keep purchased products in good working order
As competition intensifies, design offers a potent way to differentiate and position a company's products and services. Design is the totality of features that affect the way a product looks, feels, and functions to a consumer. It offers functional and aesthetic benefits and appeals to both our rational and emotional sides.
The Product Hierarchy
The product hierarchy stretches from basic need to particular items that satisfy those needs. We can identify six levels of the hierarchy, using life insurance as an example
The core need that underlines the existence of a product. Ex; security
All the product classes that can satisfy a core need with reasonable effectiveness. Ex; saving and income
A group of products within the product family recognized as having a certain functional coherence, also know as a product category. Ex; financial instruments
A group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same outlets or channels, or fall within given price range. A product line may consist of different brands, a single family brand, or an individual brand that has been line extended. Ex; life insurance
A group of items within a product line that share one of several possible forms of the product. Ex; term life insurances
Also called stock-keeping unit or product variant. A distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute. Ex; prudential renewable term life insurance.
Is a group of diverse but related items that function in a compatible manner.
Also called product assortment, is the set of all products and items a particular seller offers for sale.
of a product mix refers to how many different product lines the company carries
of a product mix refers to the total number of items in the mix
refers to how many variants are offered of each product in the line
describes how closely related the various product lines are in end use, production requirments, distribution channels, or some other way.