Product and Service Classifications

What is a Product?

• Anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want.
• A service consists of activities, benefits, or satisfactions and is essentially intangible.
• Products and services are becoming increasingly commoditized with many companies now creating and managing customer experiences with their brands or company.

Product and Service Classifications

Consumer Products

• Bought by final consumers for personal consumption.
• Convenience Products: Frequently bought, with little comparison effort.
• Shopping Products: Less frequently purchased, carefully compared by consumers.
• Specialty Products: Unique characteristics/brand identification, consumers willing to make a special purchasing effort.
• Unsought Products: Consumer doesn't know about or doesn't normally consider buying.

Industrial Products

• Products purchased for further processing, use in conducting business, or for resale.
• Materials and Parts: Include raw materials and manufactured materials.
• Capital Items: Aid in production or operations.
• Supplies and Services: Operating supplies, repair & maintenance items, and business services.

Other Product Classifications

• Organization Marketing: Activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization.
• Person Marketing: Activities undertaken to create, maintain, or change attitudes or behavior of target consumers toward particular people.
• Place Marketing: Activities undertaken to create, maintain, or change attitudes and behavior toward particular places.
• Social Marketing: Uses commercial marketing concepts to influence individuals’ behavior to improve their well-being and the well-being of society.

Product and Service Decisions

• Communicate and deliver benefits by product and service attributes: quality, features, style, and design.
• Product Quality: The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs. This includes total quality management, return-on-quality, quality level, performance quality, and conformance quality.
• Product Features: Competitive tool for differentiating a product from competitors’ products. Assessed based on the value to the customer versus its cost to the company.
• Product Style: Describes the appearance of the product.
• Service-Profit Chain: Links service firm profits with employee and customer satisfaction. This includes internal marketing (orienting and motivating customer-contact employees) and interactive marketing (buyer-seller interaction during the service encounter).

Services Marketing

• Service-Profit Chain: Links service firm profits with employee and customer satisfaction.
• Internal Service Quality: Satisfied and productive service employees lead to greater service value, satisfied and loyal customers, and ultimately, healthy service profits and growth.
• Internal Marketing: Orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction.
• Interactive Marketing: Service quality depends heavily on the quality of the buyer-seller interaction during the service encounter.
• Service Differentiation: Creates competitive advantage. This can be accomplished through offer, delivery, or image.
• Service Quality: Enables a service firm to differentiate itself by consistently delivering higher quality than its competitors.
• Service Productivity: Refers to cost side of marketing strategies for service firms. This involves employee hiring and training, service quantity, and service quality.

Brand Strategy: Building Strong Brands

• Brand Equity: The differential effect that knowing the brand name has on customer response to the product or its marketing.
• Brand Value: Total financial value of a brand.
• Brand Positioning: Brands can be positioned at three levels: attributes, benefits, or beliefs and values.
• Brand Name Selection: Should be suggestive of benefits and qualities, easy to pronounce, recognize, and remember, distinctive, extendable, translatable for the global economy, and capable of registration and legal protection.
• Brand Sponsorship:
  • Manufacturer's Brand: The brand name is owned by the manufacturer.
  • Private Brand: A product that is distributed exclusively by a retailer or wholesaler.
  • Licensed Brand: A firm uses a licensed brand name for a fee.
  • Co-Brand: Two established brand names are used as co-brands.