Product Strategies, Service Quality and Pricing

Marketing mix / 4 Ps of marketing. 1. Product: which the seller offer to the buyer. 2. Price : the value at which the seller offer the product to buyer 3. Place : the channel through which product is made available to the buyer. 4. Promotion : the ideas or actions that the seller takes to attract the buyer and to increase the sales of product.

Product: Acc to Philip Kotler- “ A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a need or a want. It includes physical goods, services, person, places, organization and ideas.

Alderson: “Product is a bundle of utilities consisting of product features and accompanying services”. Stanton: “A Product is a set of tangible and intangible attributes, including packaging, color, price, etc… A broad term.

Important Features of Product: Tangibility. Intangibility Associated Attributes like brand, packaging, warranty, etc… Exchange value Directed towards some need of customer Consumer satisfaction

Classification of products or goods Industrial Goods Consumer Goods Convenient Goods: goods that consumer buy frequently, immediately and with minimum shopping efforts Ex: Foods items, newspapers, soap, toothpaste, etc… Shopping Goods: the goods which are purchased by consumer not freqently, only after careful comparison, quality, price, etc… Ex: Cloths, furniture, households appliances, etc…

Specialty Goods: these goods are with unique characteristics or brand identification. And purchaser make a special purchasing efforts. Ex: fancy goods, special eating items, luxury cars, jewelery, etc… Durable goods: goods which are durable in nature. once you purchase it you can use it for a longer period of time. They can be stored. You utilize the service of this goods and not the goods itself. Ex: Home appliances, cloths,…

Non durable Goods/perishable goods: the goods which cannot be stored. You purchase it and consume it within short time period. generally you consume the goods itself. Ex: food products, milk,… Services products: intangible in nature. act or performance done by service seller to satisfy the need of customer. Ex: hair saloon, doctor, lawyer, teacher,…

Levels of Product Three Levels 1. Core product: what the consumer really buys? 2. Related product features: Brand name, packaging, safety components, etc… 3. Related Services: Delivery, installation, maintenance, repair, etc…

ProductCore productRelated FeaturesRelated services CarTransportationA.C., Power steering, Brand, etc… After sales service, free repair, etc… RestaurantFood that satisfy the hunger Table, chair, A.C., music, well dressed and trained employees, etc… Advanced table Booking, Credit card payment, safety Walt, safe car perking, etc…

Customer value hierarchy/five levels of product Known as five levels of product. With each level more value is added to the product. With each level customer get more value from the product. Five levels: 1. Core product/benefit 2. Basic product/ Generic product 3. Expected product 4. Augmented product 5. Potential product

1. Core product: Most basic level. It is what the customer is actually buying. It describes the basic benefit that product gives to buyer. 2. Basic product/Generic product: Core product with some features, design, quality level, brand name, packaging,…

3. Expected product: A set of features and attributes that are normally expected by the buyer when they buy it. 4. Augmented product: Set of additional services and benefits offered which exceed expectation of customers. 5. Potential product: Set of all possible augmentation and transformation that might undergo in future.

Ex: Mobile handset Level of ProductExamples 1. Core product Basic advantage that it provides: Communication 2. Basic ProductFeatures and design like color, size Good quality Of a good Brand Proper packed 3. Expected productWhat customers may expect like Light weight, easy to operate, long battery life, …

4. Augmented productWhat the provider offers more than expectations of customers like: With FM radio, MP3 Player, Camera with good M Pixels, voice dialing,… 5. Potential ProductAll features that be added to a handset like Internet connectivity, TV, GPS,…

Product Hierarchy Product hierarchy stretches from basic needs to particular items that satisfy those needs. We can identify 5 levels of product hierarchy. 1. Need family 2. Product family 3. Product class 4. Product line 5. Product type

1. Need Family: core need which is reason to existence of a product family. Ex: Thrust. 2. Product family: all products that can satisfy the core need. Ex: water, soft drinks, juices, tea, coffee,… all drinks that can satisfy thrust. 3. Product class: a group of products within product family having a certain functional coherence. Ex: soft drinks, hot drinks,…

4. Product line: a group of products that are closely related because they perform a similar task, sold to same customers, within specific price range,… Ex: Juice, coffee cold,… 5. Product type: different variants of a particular product. Ex: Juice with different flavor,…

Product Mix Product mix(product assortment) is the set of all products that a particular seller offer for sales to buyer. Product mix shows all the products that are offered by the seller in the market to sell. It shows all the products that are manufactured/distributed by a firm.

Product Mix XYZ Co. Ltd.SoapABCDShampooEFGToothpasteHI

Product Line: product line is a group of products that are closely related because they function in a similar manner or sold to similar group of customers or marketed through similar types of outlets or fall within given price range. Length: total no of items that company offers under different product lines. Width: no of product lines that company offers Depth: no of versions/verities offered under each product line. Consistency: refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.

Some Strategies related to Product Mix. Expansion of product Mix Contraction of product Mix Trading up and Trading Down Trading Up: Adding higher priced and more prestigious product to existing product mix. Trading Down: Adds a lower priced and less prestigious product to the existing product mix.