Unit 3 The Marketing Mix – Product, Price & Place Ch10

What Is a Product? The product is the primary P of the marketing mix. Without a product, you do not need the other Ps (price, place, promotion)

Types of Products Products are usually grouped into two categories. Consumer products sold to customers for personal use Business products sold to businesses for business use (Continued)

Types of Products Products can also be described as tangible or intangible. Tangible something that exists physically and can be touched goods are tangible (Continued)

Types of Products Intangible something that exists, but is not physical and cannot be touched services and ideas are intangible

Product Benefit The product is whatever the business sells to satisfy customer needs. The product can be a good, service or an idea The need-satisfying quality of a product is called a product benefit.

The Service Economy A service economy is an economy in which most of the GDP (Gross Domestic Output) comes from services and most of the workers have jobs in services. Services account for about 78 percent of GDP in the Canada.

Characteristics of Services Services are different from goods in four ways. Services are intangible inseparable variable perishable

Characteristics of Services Description Example Intangible Cannot be touched or tried out before purchase Concert, cellphone service, insurance Inseparable Production of the service cannot be separated from the use of the service. A haircut does not exist without the hairdresser Variable Only exists once and is never exactly repeated in the same way – may lead to quality control issue Different hairdressers may give different quality haircuts Perishable Cannot be stored for later use -some goods are perishable, but most can be stored until needed. unsold concert tickets cannot be stored and sold at a later time

The Good-Service Continuum Many products are combinations of good and service. Example: a restaurant meal is a combination of good and service the food itself is a good the preparation and serving of the food is a service

The Good-Service Continuum Pure Goods Pure Services Soap Books Restaurant Meal Cellphone Tutoring Concert Legend Amount of goods Amount of services

Product Elements The elements of a product can be grouped into four categories. basic product usage protection name Product elements can be changed to meet customers’ needs. (Continued)

Basic Product When you decide which product to sell, you need to make basic product decisions about quality features options

Quality What is quality? Level of excellence in something Premium quality - highest price Moderate quality - moderate price Value quality - lowest price with the best possible quality at that price During product development, decide on the quality of the product with the target market in mind. The level of quality will affect the cost to produce the product and therefore its price.

Features Option For a good: a physical characteristic of the good For a service: one of the tasks that will be done A feature that can be added to a product at the customer’s request

Usage Part of the product decision is how to help the customer make the best use of the product. Product elements that help the customer with product usage: instructions installation technical support

Protection Protection consists of product elements that protect the product from harm, both before and after purchase: packaging warranties maintenance and repair services

Packaging Packaging functions “face” of the product a very important part of product promotion often is the first thing that attracts a customer part of product identity provides product information & instructions protect a product from damage until the customer is ready to use it make products easier to stack on a display discourage theft (Continued)

Canadian Labelling Requirements False or misleading packaging is against the law. Most packaged foods require an ingredient list. Labelling must appear in English and French. Product must be clearly identified. Quantity of product must be expressed in units of volume (1L, 25 pieces). Product must include manufacturer and dealer’s name and address.

Warranties and Guarantees To convince customers of the quality and reliability of their products, marketers provide warranties guarantees

Warranties & Guarantees Warranty Guarantees Written document Assures customers of the quality and reliability of a product Promises to correct certain problems should they occur Promise that a product has a certain quality or will provide satisfaction Generally used in promotions

Maintenance and Repair Services Complex machines often require regular maintenance. the availability of these services may affect the customer’s buying decision

Name Name a critical part of a product includes product name brand name product “personality”

Product Strategy Product strategy all of the decisions made about a product starts with the decision about which product to offer - then makes decisions about product elements, keeping the target market in mind distinguishes your product from the competitors must balance meeting customers’ needs and beating competition with costs of production and marketing