Marketing Management 3 assigment 750-900 words each assigment

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Products: Goods and Services

6. 1

Marketing Framework

Discussion Questions

1. Is Arnold Schwarzenegger a product? 2. What is a product?

Products

• A product can be either a good or a service

• It is the most essential decision in the

4Ps because it is what the consumer is receiving in the exchange

Marketing Exchange

• Exchange • The company offers something (product)

• The product can be designed to be more or less attractive

– e.g., Increase/decrease quality, service, etc. • The customer offers something in return

(payment) • Customer can be more or less attractive

– e.g., High/low loyalty, high/low maintenance, spreads positive word-of-mouth, etc.

Marketing Exchange

• Marketers need to 1. Determine what the customers want in

order to increase the likelihood of exchange

2. Determine what the company can profitably offer

• The goal is to create mutually beneficial exchanges which result in long-term customer relationships

Goods vs. Services

• Goods and services differ in terms of • Intangibility • Search, Experience, Credence • Perishability • Variability

Goods vs. Services: Intangibility

• Intangibility: • Extent to which you have something concrete

• Pure goods: e.g., Paper, phones, etc. • Pure services: e.g., Massage, babysitting, etc. • Hybrids: e.g., Restaurants

• Experience marketing

• Consumers are buying the experience • e.g., “What happens in Vegas stays in Vegas”

Goods vs. Services: Qualities

• Search Qualities • May be evaluated prior to purchase

• Experience Qualities • Need trial/consumption before evaluation

• Credence Qualities • Difficult to judge even post-consumption

Goods vs. Services: Qualities

• Goods are dominated by search and experience qualities

• Services are dominated by experience

and credence qualities • Professional service providers are beginning

to understand the value of marketing • e.g., Sending quality signals to customers,

choosing locations, designing appealing atmospheres, etc.

Goods vs. Services: Perishability

• Perishability • Services are simultaneously produced and

consumed; thus, 1.Services cannot be stored; goods can

• Marketers need to even out demand

2.Services cannot be separated from the provider; goods can

• Customer/service provider interaction becomes part of the service

Goods vs. Services: Variability

• Variability • Good are made by machines, services are

usually people intensive • Services change across customers and

across time • Marketers need to

• Try to reduce bad variability – e.g., Errors in the system

• Try to improve good variability – e.g., Customization

Discussion Question

• What steps can marketers take to reduce bad variability?

Core vs. Value-Added

• Core is essential to the product offering • Value-added is supplemental

• Can use to differentiate & improve satisfaction • Can use to identify competition

Core vs. Value-Added

• Core elements are expected by customers • If core elements are substandard,

dissatisfaction can be triggered • e.g., Hampton Inn needs a bed and

bathroom because it is expected

• Marketers can compete/differentiate on value-addeds

• e.g., Hampton Inn serves complimentary, hot breakfasts

Core vs. Value-Added

• Core businesses may change as industries and firms change

• e.g., Victoria’s Secret was 70% apparel but is now 70% beauty and fragrance

• It is key to continually ask • What business are we really in? • Who are our true competitors?

Competition through Customers’ Eyes

• Define competition broadly • e.g., Theaters compete with other theaters as

well as other forms of entertainment

Product Lines: Breadth and Depth

• Product mix • A company’s product lines

• Breadth • Number of product lines

• e.g., Frigidaire sells refrigerators, washers, dryers, ranges, etc.

• Depth • Number of products in a line

• e.g., Frigidaire has top-mount, side-by-side refrigerators, etc. and many variations

Product Line Strategies

• Product line managers can prune or supplement existing lines

Managerial Recap

• Products are goods and services • Products are the central offering in the

marketing exchange • Goods and services share similarities

and differences • Services are relatively more intangible,

inseparable, perishable and variable

Managerial Recap

• A firm’s market offering is comprised of the “core” and the “value-addeds”

• Consider competition broadly

• Competition can evolve over time

Products: Goods and Services
Marketing Framework
Discussion Questions
Products
Marketing Exchange
Marketing Exchange
Goods vs. Services
Goods vs. Services: Intangibility
Goods vs. Services: Qualities
Goods vs. Services: Qualities
Goods vs. Services: Perishability
Goods vs. Services: Variability
Discussion Question
Core vs. Value-Added
Core vs. Value-Added
Core vs. Value-Added
Competition through Customers’ Eyes
Product Lines: Breadth and Depth
Product Line Strategies
Managerial Recap
Managerial Recap