Product and Product and Service StrategyService Strategy

Chapter 9Chapter 9

Product-Service Product-Service ContinuumContinuum

Sugar Restaurant

University

Education

Pure Tangible

Good

Pure Service

What is a product?What is a product?

One definition of a product:One definition of a product: A good, service, or idea consisting of a A good, service, or idea consisting of a

bundle of tangible and intangible bundle of tangible and intangible attributes that satisfies consumers and is attributes that satisfies consumers and is received in exchange for money or other received in exchange for money or other unit of valueunit of value

Product Concept:Product Concept: Defines the essence, or core idea Defines the essence, or core idea

underlying the product features and underlying the product features and benefits that appeal to the target market.benefits that appeal to the target market.

A Product’s Three PartsA Product’s Three Parts Core Product – benefit, basic features, value, serviceCore Product – benefit, basic features, value, service Actual Product/Primary characteristics – features, Actual Product/Primary characteristics – features,

quality, design, attributes, colour, packaging quality, design, attributes, colour, packaging (depending on product)(depending on product)

Augmented Product – credit, payment plans, Augmented Product – credit, payment plans, warranties, after the sales service, delivery, packaging, warranties, after the sales service, delivery, packaging, etc.etc.

Discussion Question – Page Discussion Question – Page 249, #3249, #3

Types of Consumer Types of Consumer ProductsProducts

ConvenienceConvenience:: purchased frequently, immediately, purchased frequently, immediately, and with a minimum of comparison and buying and with a minimum of comparison and buying efforteffort

ShoppingShopping:: the consumer compares product the consumer compares product alternatives on such bases as suitability, quality, alternatives on such bases as suitability, quality, price, and styleprice, and style SpecialtySpecialty:: a product with unique characteristics a product with unique characteristics

or brand identification, which the consumer is or brand identification, which the consumer is willing to make a special purchase effortwilling to make a special purchase effort

UnsoughtUnsought:: a product the consumer does not a product the consumer does not know about, or normally consider buyingknow about, or normally consider buying

Product item

Product line

Product class

Product mix

Example: General Motors

Product line and mixesProduct line and mixes

Line ExtensionLine Extension

• As Marriott’s product extension grew in popularity, it extended the product further.

Product Mix DecisionsProduct Mix DecisionsProduct mix:Product mix: the set of all product lines and items that a particular seller offers for salethe set of all product lines and items that a particular seller offers for sale

Width:Width: the number of different product lines carried the number of different product lines carried

Length:Length: the total number of items carried within the product lines. the total number of items carried within the product lines.

http://www.pg.com/product_card/prod_card_laundry.jhtmlhttp://www.pg.com/product_card/prod_card_laundry.jhtml

Depth:Depth: the number of versions offered of each the number of versions offered of each product in the line product in the line

http://www.homemadesimple.com/sites/http://www.homemadesimple.com/sites/en_US/cascade/products/index.shtmlen_US/cascade/products/index.shtml

BrandingBranding

Creating, maintaining, Creating, maintaining, protecting and protecting and enhancing products enhancing products and services.and services.

A brand is a name, A brand is a name, term, sign, symbol, term, sign, symbol, design or a combination of these design or a combination of these that identifies the maker or seller of that identifies the maker or seller of a product or service.a product or service.

Types of Brands

•Family Brands – i.e. Campbell’s, Marriott •Flanker brand•Co-branding

•Ingredient branding •Cooperative branding •Complementary branding

•Private brands

What’s HappeningWhat’s Happening

http://www.amazon.com/Kindle-Amahttp://www.amazon.com/Kindle-Amazons-Wireless-Reading-Device/dp/B0zons-Wireless-Reading-Device/dp/B000FI73MA00FI73MA

Brand Name Selection Brand Name Selection

• It should suggest product’s benefits and It should suggest product’s benefits and qualities.qualities.

• It should be easy to pronounce, It should be easy to pronounce, recognize and remember.recognize and remember.

• It should be distinctive.It should be distinctive.• It should be extendable.It should be extendable.• It should translate easily into foreign It should translate easily into foreign

languages.languages.• It should be capable of registration and It should be capable of registration and

legal protection.legal protection.• Should reinforce the product conceptShould reinforce the product concept

Discussion Question – page Discussion Question – page 249, #4249, #4

PackagingPackaging

Containment Containment functionsfunctions

Protection in Protection in transit functiontransit function

Storage functionStorage function Usage facilitation Usage facilitation

functionfunction Promotion functionPromotion function Ecological functionEcological function

The heart shape bowl communicates a

healthy diet

PackagingPackaging

Dutch Boy recently came up with a long overdue innovation—paint in plastic containers with twist-off caps.

LabellingLabelling Printed information appearing Printed information appearing

on or with the package.on or with the package. Performs several functions:Performs several functions:

Identifies product or brand.Identifies product or brand. Describes several things about Describes several things about

the product.the product. Promotes the product through Promotes the product through

attractive graphics.attractive graphics. Legal/regulatory issuesLegal/regulatory issues

What is a service?What is a service?

One definition of a service:One definition of a service: Activities, deeds, or other basic Activities, deeds, or other basic

intangibles offered for sale to intangibles offered for sale to consumers in exchange for money or consumers in exchange for money or something else of value.something else of value.

Characteristics of Characteristics of ServicesServices

IntangibilityCannot be seen, tasted, felt or smelled before

purchasing

VariabilityService quality depends on who provides and

under what conditions

InseparabilityProduction and,

consumption, and from the provider

PerishabilityCannot be stored,

for resale or later use