Chapter 2.2 - Logos, Taglines, & Trademarks

• A product is a key variable in the marketing mix.
• Products are typically a firm's most important asset.

What is a Product?

• A product is a good, service, or idea received in an exchange.
• It is anything offered to a market to satisfy a customer's desire or need.
• Products can be tangible or intangible.

Tangible Product

• A tangible product is a physical object perceived by touch.
• These are things used everyday that can be felt with the five senses.
• Examples include buildings, vehicles, gadgets, or clothing.

Intangible Product

• It cannot be felt, touched, or measured.
• It is non-physical but valuable.
• Services include performance and efforts that can be durable or nondurable and the application of human and mechanical efforts to people or objects.
• Examples include travel agency bookings, medical examinations, daycare, banking, marketing, and maintenance & repair.
• Ideas include a concept, philosophy, image, issues, or inventions.
• Ideas can provide psychological stimulation that helps in solving problems or adjusting to the environment.
• The invention of the light bulb by General Electric or an internet load are examples of ideas.

Product Anatomy

• The product is the central component of the marketing mix because other Ps in the marketing mix exist to sell the product.
• Products come in simplified and extended types.

Simplified Products

• These have two types: Core, Actual and Augmented Products.

Extended Products

• These have products with Core Benefits, are Generic, Expected, Augmented and Potential.

3 Levels of Product (Simplified)

• The core benefit is the fundamental need satisfied when a customer buys a product.
• The actual product includes its features and design.
• The augmented product accounts for the non-physical parts of the product.
• The augmented product helps in tailoring the product to meet specific customer needs.

5 Levels of Product by Kotler (Extended)

• Core Benefit is the basic good or service purchased.
• The basic product forms the nucleus of the total product.
• It constitutes the problem-solving features or basic benefits that consumers seek when they acquire a product.
• The expected product/level includes a set of attributes and conditions that the buyer expects or requires.
• The Augmented product is what the customer is really buying.
• It is a combination of what the seller intends and the buyer perceives.
• The potential product encompasses all augmentations and transformations it might undergo in the future.

Classification of Products

• Products can be classified into Consumer or Business Products.

Consumer Products

• These are for personal or household use.

Business Products

• These are used to manufacture other products, to resell, or for general business operations.

Consumer Products

• Convenience goods are inexpensive and require minimal effort when purchasing, like shampoo, toilet paper or candles.
• Shopping goods are those in which consumers invest time and effort, for example phones or laptops.
• Specialty goods include products or services with unique characteristics or brand identification where buyers are willing to spend considerable effort, for example designer clothes or luxury cars.
• Unsought products are those that are purchased when a sudden problem needs to be solved, like life insurance or fire extinguishers.

Business Products

• Installations include facilities and major pieces of equipment that are non-portable.
• Installations are used directly in the production process.
• Accessory Equipment does not become part of the final physical product but is used in production or office.
• Usually, these are cheaper activities purchased routinely with less negotiation.
• Raw Materials are basic natural materials/substances used to manufacture goods.
• Component Parts are part of a physical product that can be finished items ready for assembly or products needing minimal processing before assembly.
• Process Materials are used directly in the production of other products not readily identifiable.
• Maintenance, Repair, Operations Supplies (MRO Supplies) facilitate production/operations but do not become part of the finished product.
• Business Services are the intangible products organizations use in their operations, specifically financial, legal, market research, information technology or cleaning services.

Product Line

• Product line is a group of closely related product items, considered a unit for marketing, technical, or end-use reasons.
• A product line refers to the assortment of similar things that the firm holds.

Advantages of Expanding Product Line

• Expanding product lines can lead to increased revenue, consumer loyalty, a greater market share, and enhanced reputation.

Product Mix

• It is also known as a product assortment or product portfolio.
• The product mix refers to the complete set of products and/or services a company offers.
• A product mix consists of product lines, which are associated items that consumers tend to use together or think of as similar products or services.

Dimensions of Product Mix

• Width (or breadth) refers to the number of product lines a company offers.
• Length refers to the total number of products in a firm's product mix.
• Depth refers to the number of variations within a product line.
• Consistency refers to how closely related product lines are based on use, production, and distribution channels.
• Consistency is advantageous for firms positioning as a niche producer or distributor.

Advantages of a Product Mix

• A firm's product mix impacts its brand image.
• Maintaining high product width and depth diversifies product risk and reduces dependence on one product line.
• Unnecessary product width diversification can hurt a brand's image; for example, if Apple expanded into refrigerators, it would likely negatively impact its brand image.
• Expanding the width of a product mix can provide a company with the ability to satisfy the needs/demands of different consumers and diversify risks.
• Expanding the depth of a product mix can provide the ability to readdress & better fulfill current consumers' needs.

Difference of Product Line and Product Mix

• A product line is a group of closely related products; a product mix is the complete set of products/services a company offers.
• Product line strategy can be either full-line or limited-line.
• Product Mix includes the dimensions of width, length, depth, and consistency.
• Product Line includes price range, functionality and target audience/brand.
• Product Mix includes company's age, financial standing and brand identity.

Importance of Product Line and Product Mix in a Business

• Inventory Management is a part of the supply chain, helping to order, stock, and utilize a business' products.
• A business' product mix helps determine a brand's image by ensuring a company stays consistent with its products.
• Knowing what products core customers purchase from the product mix is useful in knowing whether adding a product would be monetarily beneficial.