Module 2 MM2

Marketing Management - II
Module 2
Creating Value
Product Characteristics and Classificationc
Product
How does one define a product?

Product Characteristics and Classification
Product
Product
Product
Product
A product is anything which can be

offered to the market for
attention, acquisition, use or
consumption and which might
satisfy a want or need
A product is a solution a
customer’s problem!
Differentiation between Product and Brand
Product Brand
A product is an item which is ready for sale in the A brand distinguishes the product from other
market products in the market
A product satisfies the needs of the consumers A brand satisfies the wants of the customers
A product is a bundle of functional attributes A brand is a personality
A product offers solutions. A brand offers value
A product typically has a life cycle A brand can be timeless and possess infinite life.
A brand has a distinguished identity that cannot be

A product can be easily copied by competition
copied.
5 Levels of Products
Product : Five Levels of a Product
Potential product Core Benefit

Augmented product
The core benefit is the
Expected product fundamental need or wants
Generic product that the customer satisfies
when they buy the product.
Core
Benefit
E.g.: The core benefit of a hotel is
to provide a place to rest or
sleep.
The core benefit of this slide

changer is to aid communication
Potential product Generic Product

The generic product is a basic
Augmented product
version of the product made
Expected product up of only those features
Generic product necessary for it to function.
Core
E.g. : A needs to provide bed,
Benefit
towels, bathroom mirror and
wardrobe to enable rest or sleep.
The slide changer should be

adaptable with the system in
class, should have a range
adequate for the classroom.
Potential product Expected Product

Augmented product
The expected product is the
Expected product set of features that the
Generic product customers expect when they
buy the product.
Core
Benefit
E.g. : A hotel should have clean
sheets & towels, clean bathroom
(maybe Wifi?)
The slide changer should be easy
to hold. The operation should be
simple.
Potential product Augmented Product

Augmented product
The augmented product
Expected product refers to any product
Generic product variations, extra features, or
services that help
Core
Benefit differentiate the product from
its competitors.
E.g. : A mobile phone in the room,
concierge services, location of the
hotel.
The slide changer indicates when
the battery is low, provides a
strap to be strapped to the finger
etc.
Potential product Potential Product

Augmented product
The potential product
Expected product includes all augmentations
Generic product and transformations the
product might undergo in the
Core
Benefit future.
E.g. : Gifts placed in the room,
allowing customer to choose the
type of mattress / pillow.
The slide changer also doubles as

a marker and a mike.
Product classification
Product Classification
Consumer products Industrial Products

Products or services brought Products which are purchased
by final consumers for Product Classification for further processing or for
personal consumption (On the basis of the use in conducting a business
purpose for which a
Product is bought)
Convenience Speciality Material and Supplies and

Products Products Parts Services
Shopping Unsought
Products Capital Items
Products
Consumer products Industrial Products

Products or services brought Products which are purchased
by final consumers for Product Classification for further processing or for
personal consumption (On the basis of the use in conducting a business
purpose for which a
Product is bought)
Convenience Speciality Material and Supplies and

Products Products Parts Services
Shopping Unsought
Products Capital Items
Products
Product Classification : I) Consumer Products
Convenience Products
Products or services which consumers buy

frequently, immediately with minimum
comparison or effort
They are normally low priced but very highly

distributed and available products
Shopping Products
Less frequently purchased products and

services. But consumers do examine and
compare these products on suitability, price
style.
Time is spent gathering information about

these products. Distributed through fewer
outlets, but sales support provided to enable
comparison
Specialty Products
Products or services with unique characteristics

or identification which a significant group of
people will make a special purchase effort
Specialty products are normally not compared.

Consumers invest only the time needed to
reach dealers who stock these products
Unsought Products
Products which the consumer either does not

know about or knows about the same but does
not think of buying
By their very nature, unsought products require

a lot of advertising, personal selling and other
marketing efforts
Buying Behavior?
a) Frequent and b) Infrequent planned
or
unplanned purchases purchases
Price?
a) Large part of the b) Small part of the
Convenience customer’s budget
or
consumer’s budget
Products
Distribution?
a) Extensive Distribution or b) Selective Distribution
Promotion?
a) Mass Media or b) Personal Selling

Buying Behavior?
a) Frequent unplanned b) Infrequent planned
or
Shopping purchases purchases
Products Price?
- Consumers do a) Large part of the b) Small part of the

or
examine and customer’s budget consumer’s budget
compare these
products Distribution?
- Time is spent a) Extensive Distribution or b) Selective Distribution

gathering
information
comparison Promotion?
a) Price discounts or b) Brand Advertising

Buying Behavior?
a) Frequent planned b) Infrequent planned
or
purchases purchases
Specialty Price?
Products a) Large part of the b) Small part of the
- Products or services or
customer’s budget consumer’s budget
with unique
characteristics or
Distribution?
identification
- People will make a
special purchase a) Selective Distribution or b) Exclusive Distribution
effort
Promotion?
a) Image based promotion or b) Brand Advertising

Buying Behavior?
a) Infrequent planned b) Infrequent unplanned
or
purchases purchases
Unsought
Price?
Products
a) Independent of b) Dependent on the
or
Products which the customer budget product
consumer either does
not know about or Distribution?
knows about the same
but does not think of a) Push or b) Pull
buying
Promotion?
b) Aggressive advertising
a) Brand Advertising or
on benefits
Product and Service decisions
Product and Service Decisions
Marketers make product and services decisions at 3 levels
Individual product Product line Product mix

decisions decisions decisions

Will be covered in subsequent

modules

Product and Service Decisions : Individual Product Decisions
Individual Product Decisions are made at the following levels
Product
Product Branding Packaging Labelling support
attributes services
Product
attributes services
Product Attributes
Features
Product
attributes
Style &
Quality
Design
Product Attributes
Features
Product
attributes
Style &
Quality
Design
Product Attributes : Quality
A Key Positioning tool for the marketer
Quality Impacts product performance
Strongly linked to customer satisfaction

Product Attributes : Quality
Level :
Consistency :
Marketer to
Consistency in
choose a Quality Quality has 2
delivering the
Level to support dimensions
level of quality
its position in
and targeted
the market
performance.
Product Attributes
Features
Product
attributes
Style &
Quality
Design
Product Attributes : Features
A product can be offered with varying features.

Starting from a basic model, features can be
added to create upgraded models
Features are a strategic tool to build

differentiation.
Product Attributes : Style and Design
Features
Product
attributes
Style &
Quality
Design
Product Attributes : Style and Design
Style is the appearance of the product. Great

styling will grab consumer’s attention
Design contributes to the usefulness as well as

looks. Design is about how a consumer will use
and benefit from a product.
Product
attributes services
Branding
A name, term, sign, symbol or design or a Branding is vital to the product, from a
combination of these that identifies the consumers perspective as it adds value to
maker or seller of a product or service the product
Branding enables the seller

Branding helps consumers a lot – quality, Develop different offerings for different
consistency. Consumers know that buying segments.
the same brand means buying into a set of Branding becomes a synonym for the
features and consistency special features of a product
Product
attributes services
Packaging
It can include the tertiary or shipping

Involves designing & producing wrapper or carton. The work packaging also
container for a product. It also includes the encompasses labeling and printed
primary and secondary cartons information appearing or with the
packaging
Innovative packaging can deliver a huge

Role of packaging has evolved from advantage to the product over other
containing or protecting the product to offerings. Most FMCG companies are
attracting attention, describing the making huge investments in packaging
product to making the sale research and design which grab more
attention
Packaging
Packaging
Packaging
Packaging
Packaging
Product
attributes services
Labeling
Labels help identify the product

Labels range from simple tags attached to They tell several things about the product
products or complex graphics that are part i.e. where, when, how was it made.
of the packaging design Finally labels promote the products
through graphics.
By law, labels are also expected to give

information to the consumer on unit
pricing, open dating and nutritional
labeling
Labelling
Labelling
Labelling
Product
attributes services
Product Support Services
The key to SS is relevancy.

Customer service is the last crucial element
To ensure relevancy, the company must
of product strategy. A product offer
initiate research to assess value of the
includes some support services – minor or
services as well as get ideas for new
major
services
Post understanding of value the company To deliver support services a judicious mix
must assign cost to the service. It can be a of phone, e-mail, fax Internet and
package cost. The cost should create interactive voice and data technologies
delight and add profit to the company need to be leveraged
Services
Introduction to Services Marketing
Defining Services
Defining Services
Services versus Customer Service
Customer Services is the service

Services are where deeds,
provided in support of a company’s
processes and performances form
core products. Typically there is
the core product of the company
no charge for Customer Service.
Defining Services
Tangibility Spectrum
Tangible
Intangible
Services tend to be more intangible than Manufactured products. However, most goods also provide an
experience which go across the tangibility spectrum, e.g. Cars
Defining Services
Tangibility Spectrum
Salt
Detergent
Cars
Cosmetics Restaurants
Tangible
Intangible
Airlines Advertising Teaching

Agencies
Services Marketing is Different
Lakme Case Study
What were these differences and what are its

marketing implications?
When Unilever moved from Product Market to Services Market, it realized that the same marketing
principles do not work in services.
Lakme Case Study
Tangible
Lakme Cosmetic Products can be seen,

touched and felt
Intangible
Lakme Salon’s service can be

experienced.
Lakme Case Study
Homogenous
Each package of a Lakme cosmetic

product would be identical to te other.
Heterogeneous
Since the services are done by different

individuals, it is heterogeneous
Lakme Case Study
Produced and then Sold / Consumed
Lakme Cosmetic products are

manufactured and then sold
Simultaneous Production and

Consumption

Lakme Case Study
Shelf Life
Lakme Cosmetic products have a shelf

life and can be stored.
Perishable

Goods Services
Tangibility Tangible Intangible
Likeness Homogeneous Heterogeneous
Production Produced and then sold and consumed Produced and Consumed simultaneously
Shelf Life Can be stored. Has a ‘shelf life’ (which Perishable. Cannot be stored.
may vary from a few hours to a lifetime)
Questions that arise out these differences
How can service quality be defined and improved?

• Given that the product is intangible and non-standardized
How can new services be designed and tested effectively?

• Especially since service is an intangible process?
How can the company be certain it is communicating a consistent and relevant image?
• Since so many elements of the marketing mix communicate with the customers and some of these are
elements are the service provider themselves.
Questions that arise out these differences
How does a firm accommodate fluctuating demand

• Especially since capacity is fixed and service is perishable?
How should prices be set?

• Given that it is difficult to have cost based approach.
How can one balance between standardization and personalization?

• Given that a service firm’s objective is to maximize efficiency and customer satisfaction
End of Module

Module 2 MM2

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Marketing Management - II

How does one define a product?

A product is anything which can be

A product is a bundle of functional attributes A brand is a personality

A product offers solutions. A brand offers value

A brand has a distinguished identity that cannot be

Potential product Core Benefit

The core benefit of this slide

Potential product Generic Product

The slide changer should be

Potential product Expected Product

Potential product Augmented Product

Potential product Potential Product

The slide changer also doubles as

Consumer products Industrial Products

Convenience Speciality Material and Supplies and

Consumer products Industrial Products

Convenience Speciality Material and Supplies and

Products or services which consumers buy

They are normally low priced but very highly

Less frequently purchased products and

Time is spent gathering information about

Products or services with unique characteristics

Specialty products are normally not compared.

Products which the consumer either does not

By their very nature, unsought products require

a) Extensive Distribution or b) Selective Distribution

a) Mass Media or b) Personal Selling

- Consumers do a) Large part of the b) Small part of the

- Time is spent a) Extensive Distribution or b) Selective Distribution

a) Price discounts or b) Brand Advertising

a) Image based promotion or b) Brand Advertising

Marketers make product and services decisions at 3 levels

Individual product Product line Product mix

Marketers make product and services decisions at 3 levels

Individual product Product line Product mix

Will be covered in subsequent

Marketers make product and services decisions at 3 levels

Individual product Product line Product mix

Individual Product Decisions are made at the following levels

Individual Product Decisions are made at the following levels

A Key Positioning tool for the marketer

Quality Impacts product performance

Strongly linked to customer satisfaction

A product can be offered with varying features.

Features are a strategic tool to build

Style is the appearance of the product. Great

Design contributes to the usefulness as well as

Individual Product Decisions are made at the following levels

Branding enables the seller

Individual Product Decisions are made at the following levels

It can include the tertiary or shipping

Innovative packaging can deliver a huge

Individual Product Decisions are made at the following levels

Labels help identify the product

By law, labels are also expected to give

Individual Product Decisions are made at the following levels

The key to SS is relevancy.

Customer Services is the service

Airlines Advertising Teaching

What were these differences and what are its

Lakme Cosmetic Products can be seen,

Lakme Salon’s service can be