Core Concepts of Marketing by John Burnett - HTML preview

CHAPTER 7

INTRODUCING AND MANAGING THE PRODUCT

LEVELS OFTHE PRODUCT

PROMISED PRODUCT

HOLDS

TRADE-IN

VA LUE

- - -AUGMENTED PRODUCT

INSTALLATION

PACKAGING

FEATURES

TANGIBLE

\ PRODUCT

\

- CORE PRODUCT

STYLING

AFTER-SALE

WARRANTY

SERVICE

STATUS

DEPENDABILITY

FIGURE 7.1

Levels of the product

The outer ring of the product is referred to as the promised product. Every product

has an implied promise. An implied promise is a characteristic that is attached to the prod-

uct over time. The car industry rates brands by their trade-in value. There is no definite prom-

ise that a Mercedes-Benz holds its value better

a BMW. There will always be exceptions.

How many parents have

a swimming pool based on the implied promise that their

two teenagers will stay home more, or that they

entertain friends more often.

Having discussed the components of a product, it is now relevant to examine ways

of classifying products in

to facil itate the design of appropriate product strategies.

CLASSIFICATION OF PRODUCTS

It should be apparent that the process of developing successful marketing programs

indi-

vidual products is

difficult. In response to this difficulty, a variety of classifica-

tion systems have evolved that, hopefully, suggest appropriate strategies. The two most

common classifications are: (I) consumer goods versus industrial goods, and (2) goods prod-

ucts (i.e. durables and nondurables) versus service products.

CLASSIFICATION OF PRODUCTS

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Consumer Goods and Industrial Goods

The traditional classification of products is to dichotomize all products as being either consumer goods or industrial goods. When we purchase products for our own consumption or that of our family with no intention of selling these products to others, we are referring to

consumer goods. Conversely, industrial goods are purchased by an individual or organization in order to modify them or simply distribute them to the ultimate consumer in order

to make a profit or meet some other objective.

Classification of Consumer Goods

A classification iong used in marketing separates products targeted at consumers into three

groups: convenience, shopping, and specialty. l A convenience good is one that requires a minimum amount of effort on the part of the consumer. Extensive distribution is the primary marketing strategy. The product must be available in every conceivable outlet and must

be easily accessible in these outlets. Vending machines typically dispense convenience goods,

as do automatic teller machines. These products are usually of low unit value, they are highly

standardized, and frequently they are nationally advertised. Yet, the key is to convince resellers, i.e., wholesalers and retailers, to carry the product. If the product is not available when,

where, and in a form desirable by the consumer, the convenience product will fail.

From the consumer's perspective, little time, planning, or effort go into buying con-

venience goods. Consequently, marketers must establish a high level of brand awareness

and recognition. This is accomplished through extensive mass advertising, sales promotion

devices such as coupons and point-of-purchase displays, and effective packaging. The fact

that many of our product purchases are often on impulse is evidence that these strategies

work. Availability is also important. Consumers have come to expect a wide spectrum of

products to be conveniently located at their

supermarkets, ranging from packaged goods

used daily, e.g., bread and soft drinks, to products purchased rarely or in an emergency such

as snow shovels, carpet cleaners, and flowers.

In contrast, consumers want to be able to compare products categorized as shopping

goods. Automobiles, appliances, furniture, and homes are in this group . Shoppers are willing to go to some lengths to compare values, and therefore these goods need not be dis-

tributed so widely. Although many shopping goods are nationally advertised, often it is the

ability of the retailer to differentiate itself that creates the sale. The differentiation could be equated with a strong brand name, such as Sears Roebuck or Marshall Field; effective merchandising; aggressive personal selling; or the availability of credit. Discounting, or pro-

motional price-cutting, is a characteristic of many shopping goods because of retailers' desire

to provide attractive shopping values. In the end, product turn-over is slower and retailers

have a great deal of their capital tied-up in inventory. This combined with the necessity to

price discount and provide exceptional service means that retailers expect strong support

from manufacturers with shopping goods.

Specialty goods represent the third product classification. From the consumer's per-

spective, these products are so unique that they will go to any lengths to seek out and pur-

chase them. Almost without exception, price is not a principle factor affecting the sales of

specialty goods . Although these products may be custom-made (e.g., a hairpiece) or one-

of-a-kind (e.g. , a statue), it is also possible that the marketer has been very successful in

differentiating the product in the mind of the consumer. Crisco shortening, for instance, may

be considered to be a unique product in the mind of a consumer and the consumer would

pay any price for it. Such a consumer would not accept a substitute and would be willing

to go to another store or put off their pie

until the product arrives. Another exam-

ple might be the strong attachment some people feel toward a particular hair stylist or bar-

ber. A person may wait a long time for that individual and might even move with that person

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