LESSON

Product and Service Concepts

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 After studying this lesson you
should be able to:
 Understand the differences between
goods and services.

 Differentiate between consumer and

business products, and discuss the
different types of each.

 Recognize that marketers need to

appreciate the perspective of the
consumer.
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 After studying this lesson you
should be able to:
 Define and discuss the importance
of product quality, product design,
branding, packaging, and customer
service.

 Explain how the different product

components need to be integrated
to meet the needs of customers.

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 What Is a Product?

 Product:
⚫ An idea, a physical entity (a good), a
service, or any combination of the three
that is an element of exchange to satisfy
individual or business objectives .

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 Types of Products

Consumer Products:
Goods:
Those used by
Physical products
consumers for their
with form and
own use and
substance
satisfaction.

Business Products:
Services:
Those used in the
Non-physical products
running of a business
usually involving
or in the manufacture
performance
of products for resale.

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 The Goods/Services Continuum

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 Product Differentiation

 Product Differentiation:
⚫ Exists when a firm’s
offerings differ or are
perceived to differ from
those of competing
firms on any attribute,
including price.

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 Goods and Services

 Goods:
⚫ Physical  Services:
products. ⚫ Nonphysical
products.

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 Characteristics and Strategies for Services

Service Characteristic Service Strategy

Intangible Associate service with

something tangible
Perishable Manage demand to utilize
supply

Inseparable Capitalize advantages of

person providing service
Variable Standardize service delivery
as much as possible
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 Consumer and Business Products

 Consumer Products:
⚫ Products that are  Business Products:
purchased by
⚫ Products purchased by
consumers for their
a firm or organization
own personal use.
for its own use.

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 Consumer and Business Products

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 Types of Consumer Products

Convenience
Products
Shopping
Products
Specialty
Products

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 Types of Business Products

Capital
Products

Production
Products

Operational
Products
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 Product Components

Product
Components

Product Features Service Features

• Quality • Purchase services
• Design • Usage services
• Branding
• Packaging

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 Branding
 Brand:
⚫ A name, term, sign,
symbol, design, or
combination that a  Brand Name:
uses to identify its ⚫ The element of a brand
products and that can be vocalized:
differentiate them • IBM
from those of
competitors. • Tide
• Snickers
• Diet Coke

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 Branding

 Brand Mark:
⚫ The element of a
brand that cannot be
vocalized:
• MGM Lion
 Trademark:
• The Buick
⚫ A brand or part
symbol
of a brand that is
• The Nike registered with
Swoosh the U.S. Patent
and Trademark
Office.

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 Building Brands

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 Types of Brands
Generics
(Products typically not branded)

Manufacturer Brand
(National brand or
regional brand)

Distributor Brand
(Store brand, private brand,
or private label)

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 The World’s 10 Most Valuable Brands
Rank Brand 2002 Brand Value ($billions)

1 Coca-Cola 69.6
2 Microsoft 64.1
3 IBM 51.2
4 GE 41.3
5 Intel 30.9
6 Nokia 30.0
7 Disney 29.3
8 McDonald’s 26.4
9 Marlboro 24.2
10 Mercedes 21.0
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 Keys to Choosing A Brand Name

Is easy to
pronounce, Is
recognize, distinctive Can be
and in some translated
remember. way. into other
languages.

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 Packaging
Label:
A printed description
of the product on the
package.

Package:
The container or
wrapper for a
product.
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 Functions of Packaging
 Protecting the product until
consumed.

 Storing the product until

consumed.

 Facilitating consumption of the

product.

 Promoting the product.

 Facilitating disposal of the product.

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 Customer Service
 Customer
Service:
⚫ Describes the  Important Elements of
assistance Customer Service:
provided to help a ⚫ Providing information
customer with the about product
purchase or use alternatives.
of a product.
⚫ Training in product use.

⚫ Credit and financing

services.

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