1. Marketing Management Dawn Iacobucci © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2. Products: Goods & Services Chapter 5 © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

3. What is a Product? The term product can refer to –both goods and services –the full product profile (4Ps) –part of the customer-company exchange Company offers something (a flight), and the customer offers something in return (payment) © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

4. Relationship Marketing Successful exchanges can lead to loyalty and satisfaction –Marketers benefit from turning short-term exchanges into long-term customer relationships © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

5. Involvement and Product Types Low Involvement –Convenience and straight rebuys Customers are inclined to –engage in limited, if any, word-of-mouth –exert minimum effort retrieving the product –be more price sensitive Marketers are inclined to –offer price-related loyalty programs –engage in extensive distribution –try to capture customers’ attention © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

6. Involvement and Product Types High Involvement Products –Specialty and new buys Customers are inclined to –engage in considerable word-of-mouth –exert effort retrieving the product –be less price sensitive Marketers are inclined to –offer community related loyalty programs –engage in selective distribution –offer much information about products © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

7. Tangibility Services are more intangible than goods –Pure goods are tangible socks –Pure service are intangible medical procedure –A mix has tangible and intangible components rental cars © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

8. Search, Experience, Credence Search Qualities –May be evaluated prior to purchase socks Experience Qualities –Require trial or consumption before evaluation restaurants Credence Qualities –Difficult to judge even post-consumption medical procedures © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

9. Search, Experience, Credence Goods are dominated by search and experience qualities Services are dominated by experience and credence qualities –Many services are mostly intangible; thus, marketers need to signal quality to customers through marketing actions © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

10. Perishability & Inseparability Services are simultaneously produced and consumed –Perishability: Services are more perishable than goods Marketers must try to even out demand –Inseparability: Services are more impacted by the interaction between the service provider and the customer than goods © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

11. Variability Services are more variable than goods –Due to changing needs, abilities, etc. in the service provider and customer Self-service and equipment can decrease variability –Try to reduce bad variability Errors in the system –Try to improve good variability Customization for customers’ unique needs © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

12. Goods & Services Differences between goods and services influence business decisions –Advertising, branding, pricing, logistics, etc. Thinking beyond traditional services… –Professional services –Purchase experiences –Online shopping © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

13. Beyond Traditional Services Professional service providers –Doctors, accountants, architects, etc. Are beginning to understand the importance of marketing –Determining office location –Targeting potential patients/clients –Building brand image –Developing promotion tactics, etc. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

14. Beyond Traditional Services In some purchases, customers purchase the whole “experience” –Museums, Niketown, Volkswagen’s Transparent Factory Online purchases are a mix of goods and service –Understanding implications of this mix are important © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

15. Satisfaction Core elements are expected by customers –If core elements are substandard, dissatisfaction can be triggered Marketers can affect level of dis/satisfaction through value-addeds –For example, luxurious rooms may lead to high satisfaction © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

16. Defining Core Elements Focus on the benefits and value being offered not just the product offerings Do not define elements too broadly © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

17. Dynamic Strategies Core businesses might change as the industry changes or as the firm’s competencies change –Ask… What business are we in? What benefits do we want to provide to the consumer? Who is our competition? © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

18. Product Mix Product mix –A company’s product lines Breadth –Number of product lines Depth –Number of products in a line © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

19. Product Mix Product line manager can prune or supplement existing lines Extensions into breadth and depth must be done for strategic reasons –Shouldn’t try to be all things to all people Are the new launches consistent with brand’s/company’s positioning? If not, can the brands be directed to different target segments without diluting the existing position? © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

20. Product Line Strategies © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.