1.

Product is a bundle of utilities consisting of various product features and

accompanying services. Product is anything that can be offered in a market for
attention, acquisition, use, or consumption that might satisfy a need or want.

2. Five Product Levels

a) Core benefit
b) Basic product
c) Expected product
d) Augmented product
e) Potential product

Kotler suggested that a product should be viewed in three levels.

f) Level 1: Core Product. What is the core benefit your product offers?.
Customers who purchase a camera are buying more then just a
camera they are purchasing memories.
g) Level 2: Actual Product: All cameras capture memories. The aim is to
ensure that your potential customers purchase your one. The strategy
at this level involves organisations branding, adding features and
benefits to ensure that their product offers a differential advantage from
their competitors.
h) Level 3: Augmented product: What additional non-tangible benefits
can you offer? Competition at this level is based around after sales
service, warranties, delivery and so on. John Lewis a retail
departmental store offers free five year guarantee on purchases of their
Television sets, this gives their `customers the additional benefit
of peace of mind over the five years should their purchase develop a
fault.
3. Product Classifications
a) Consumer Product
 Convenience Products
 Shopping Products
 Specialty Products
 Unsought Products
b) Business Product

4. Product Line
A product line refers to a number of products that are related and developed
by the same manufacturer. Product lines are not to be confused with product
bundling, which combines various items into one type of product. Items within
a product line generally share the same basic theme, and with the help of a
successful marketing plan these products can be entirely effective.
Frequently, a product line includes different products that are offered to the
public at varying price points. This way, a manufacturer or company can
ensure that all products within a line will be purchased by all kinds of people.
Product line extension refers to any additional products that may be added to
a current product line.

5. Product Mix

A product mix (or product assortment) consists of all the product lines and items that
a particular seller offers for sale.. Each product line consists of several sub lines.

A company’s product mix has four important dimensions: width, length, depth, and
consistency. Product mix width refers to the number of different product lines the
company carries. For example, Procter & Gamble markets a fairly wide product mix
consisting of many product lines, including paper, food, household cleaning,
medicinal, cosmetics, and personal care products. Product mix length refers to the
total number of items the company carries within its product lines. Procter & Gamble
typically carries many brands within each line. For example, it sells eleven laundry
detergents, eight hand soaps, six shampoos, and four dishwashing detergents.
Product line depth refers to the number of versions offered of each product in the
line. Thus, Procter & Gamble’s Crest toothpaste comes in three sizes and two
formulations (paste and gel). Finally, the consistency of the product mix refers to how
closely related the various product lines are in end use, production requirements,
distribution channels, or some other way. Procter & Gamble’s product lines are
consistent insofar as they are consumer products that go through the same
distribution channels. The lines are less consistent insofar as they perform different
functions for buyers.

6. Product Market Mix Strategy - Ansoff drew up a growth vector matrix, describing
a combination of a firm’s activities in current and new market, with existing and new
products. The product-market mix strategy is illustrated in diagram below:

Current products and current market: market penetration

Market penetration: the firm seeks to:

a. Maintain or increase its share of the current market with current products.
b. Secure dominance of growth markets
c. Restructure a mature market by driving out competitors
d. d. Increase usage by existing customer.
7. Product Positioning

Product positioning is closely related to market segment focus. Product positioning

involves creating a unique, consistent, and recognized customer perception about a
firm's offering and image. A product or service may be positioned on the basis of an
attitude or benefit, use or application, user, class, price, or level of quality. It targets a
product for specific market segments and product needs at specific prices. The same
product can be positioned in many different ways.

The illustration below shows an example taken from Philip Kotler's book, Marketing
Management published by Prentice Hall. This two-dimensional perception map
shows how Kotler analyses the positioning of an instant breakfast drink relative to
variables of the price of the product and speed of preparation.

Another common framework for product positioning is taken from a series of

questions. You can position a product using a positioning statement that answers
these important questions:

• For whom is the product designed?

• What kind of product is it?

• What is the single most important benefit it offers?

• What is its most important competitor?

• How is your product different from that competitor?

• What is the significant customer benefit of that difference?

8. Product diversification
Product diversification involves modifying existing products in order to expand
the market potential of a product. From changes in brands to changes in a product's
target market, product diversification can obtain new clients for your product by
leveraging an existing product's reputation and development platform to produce and
sell a modified product. Successful product diversification requires accurate targeting
 and product differentiation to prevent eroding your current market and increase
overall sales and profits

Product Diversification Benefits

 New products also offer additional revenue sources and spread risks across multiple
products. Business Dictionary also points out in its definition that seasonal or cyclical
companies can add new products as a way to fill in during off-seasons or slow
seasons for their main product. Brands that have a strong recognition and presence
are able to use established brand reputation as part of delivering the message about
new product offerings.

Product Diversification Challenges

Entrepreneur notes that companies sometimes prefer a single product focus in the
beginning. Thus, expanding into new products requires them to manage an
additional product's development and marketing. Companies that have established
expertise in producing and selling specific products are not automatically as good at
producing and selling other types of products. Taking on a well-established product
provider in a new market is especially challenging given that company's expertise in
delivering their product to a particular market

9. New Product
1. New-to-the-world (really-new) products .

2. New-to-the-firm products

3. Additions to existing product lines

4. Improvements and revisions to existing products

5. Repositioning .

6. Cost reductions

CAUSES OF NEW PRODUCT FAILURE

• Failure in Market Research Findings

 • Overestimated Demand and Size of Market

• Design Failure

• Positioning Problem

• Ineffective Communication/Promotion

• High Development Cost/ Price

• Pressure from Competitors

• Poor Timing

10. Product manager

A product manager investigates, selects, and develops products for an
organization, performing the activities of product management.

A product manager considers numerous factors such as intended demographic, the

products offered by the competition, and how well the product fits with the company's
business model. Generally, a product manager manages one or more tangible
products. However, the term may be used to describe a person who manages
intangible products, such as music, information, and services.

A product manager's role in tangible goods industries is similar to a program

director's role in service industries. Diverse interpretations regarding the role of the
product manager are the norm. The product manager title is often used in many
ways to describe drastically different duties and responsibilities. Even within
the high-tech industry where product management is better defined, the product
manager's job description varies widely among companies. This is due to tradition
and intuitive interpretations by different individuals.

In the financial services industry (banking, insurance etc.), product managers

manage products (for example, credit card portfolios), their profit and loss, and also
determine the business development strategy.

In a Scrum environment, a Product Manager is also referred to as the Product

Owner, and usually has the main role of representing the product to the customer [1].
Some of the responsibilities of the Product Owner include marketing of the product
and analysis of the competition.

11. Marketing strategy

Marketing strategy is a process that can allow an organization to concentrate its
limited resources on the greatest opportunities to increase sales and achieve a
sustainable competitive advantage. Marketing strategies serve as the fundamental
underpinning of marketing plans designed to fill market needs and
reach marketing objectives. Commonly, marketing strategies are developed as multi-
year plans, with a tactical plan detailing specific actions to be accomplished in the
current year. Time horizons covered by the marketing plan vary by company, by
industry, and by nation, however, time horizons are becoming shorter as the speed
of change in the environment increases.[3] Marketing strategies are dynamic and
interactive. They are partially planned and partially unplanned. Marketing strategy
involves careful scanning of the internal and external environments which are
summarized in a SWOT analysis.

Types of Strategies

Marketing strategies may differ depending on the unique situation of the individual
business. However there are a number of ways of categorizing some generic
strategies. A brief description of the most common categorizing schemes is
presented below:

 Strategies based on market dominance - In this scheme, firms are classified

based on their market share or dominance of an industry. Typically there are four
types of market dominance strategies:
 Leader
 Challenger
 Follower
 Nicher
 Porter generic strategies - strategy on the dimensions of strategic scope and
strategic strength. Strategic scope refers to the market penetration while strategic
strength refers to the firm’s sustainable competitive advantage. The generic
strategy framework (porter 1984) comprises two alternatives each with two
 alternative scopes. These are Differentiation and low-cost leadership each with a
dimension of Focus-broad or narrow.
 Product differentiation (broad)
 Cost leadership (broad)
 Market segmentation (narrow)
 Innovation strategies - This deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is on
the cutting edge of technology and business innovation. There are three types:
 Pioneers
 Close followers
 Late followers
 Growth strategies - In this scheme we ask the question, “How should the firm
grow?”. There are a number of different ways of answering that question, but the
most common gives four answers:
 Horizontal integration
 Vertical integration
 Diversification
 Intensification

A more detailed scheme uses the categories:

 Prospector
 Analyzer
 Defender
 Reactor
 Marketing warfare strategies - This scheme draws parallels between marketing
strategies and military strategies.

12. The Product Life Cycle

A new product progresses through a sequence of stages from introduction to growth,

maturity, and decline. This sequence is known as the product life cycle and is
associated with changes in the marketing situation, thus impacting the marketing
strategy and the marketing mix.
The product revenue and profits can be plotted as a function of the life-cycle stages
as shown in the graph below:

Product Life Cycle Diagram

Introduction Stage

In the introduction stage, the firm seeks to build product awareness and develop a
market for the product. The impact on the marketing mix is as follows:

 Product branding and quality level is established, and intellectual property

protection such as patents and trademarks are obtained.
 Pricing may be low penetration pricing to build market share rapidly, or high
skim pricing to recover development costs.
 Distribution is selective until consumers show acceptance of the product.
 Promotion is aimed at innovators and early adopters. Marketing
communications seeks to build product awareness and to educate potential
consumers about the product.

Growth Stage

In the growth stage, the firm seeks to build brand preference and increase market
share.

 Product quality is maintained and additional features and support services

may be added.
 Pricing is maintained as the firm enjoys increasing demand with little
competition.
  Distribution channels are added as demand increases and customers accept
the product.
 Promotion is aimed at a broader audience.

Maturity Stage

At maturity, the strong growth in sales diminishes. Competition may appear with
similar products. The primary objective at this point is to defend market share while
maximizing profit.

 Product features may be enhanced to differentiate the product from that of

competitors.
 Pricing may be lower because of the new competition.
 Distribution becomes more intensive and incentives may be offered to
encourage preference over competing products.
 Promotion emphasizes product differentiation.

Decline Stage

As sales decline, the firm has several options:

 Maintain the product, possibly rejuvenating it by adding new features and

finding new uses.
 Harvest the product - reduce costs and continue to offer it, possibly to a loyal
niche segment.
 Discontinue the product, liquidating remaining inventory or selling it to another
firm that is willing to continue the product.

The marketing mix decisions in the decline phase will depend on the selected
strategy. For example, the product may be changed if it is being rejuvenated, or left
unchanged if it is being harvested or liquidated. The price may be maintained if the
product is harvested, or reduced drastically if liquidated.
13. Packaging

Packaging is the science, art, and technology of enclosing or protecting products

for distribution, storage, sale, and use. Packaging also refers to the process of
design, evaluation, and production of packages. Packaging can be described as
a coordinated system of preparing goods for transport, warehousing, logistics,
sale, and end use. Packaging contains, protects, preserves, transports, informs,
and sells. In many countries it is fully integrated into government, business,
institutional, industrial, and personal use.

 Physical protection - The objects enclosed in the package may require

protection from, among other things, mechanical shock, vibration, electrostatic
discharge, compression, temperature,[6] etc.
 Barrier protection - A barrier from oxygen, water vapor, dust, etc., is often
required. Permeation is a critical factor in design. Some packages
contain desiccantsor Oxygen absorbers to help extend shelf life. Modified
atmospheres [7] or controlled atmospheres are also maintained in some food
packages. Keeping the contents clean, fresh, sterile[8] and safe for the
intended shelf life is a primary function.
 Containment or agglomeration - Small objects are typically grouped together in
one package for reasons of efficiency. For example, a single box of 1000 pencils
requires less physical handling than 1000 single pencils. Liquids, powders,
and granular materials need containment.
 Information transmission - Packages and labels communicate how to use,
transport, recycle, or dispose of the package or product.
With pharmaceuticals, food,medical, and chemical products, some types of
information are required by governments. Some packages and labels also are
used for track and trace purposes.
 Marketing - The packaging and labels can be used by marketers to encourage
potential buyers to purchase the product. Package graphic design and physical
design have been important and constantly evolving phenomenon for several
decades. Marketing communications and graphic design are applied to the
surface of the package and (in many cases) the point of sale display.
 Security - Packaging can play an important role in reducing the security risks of
shipment. Packages can be made with improved tamper resistance to deter
tampering and also can have tamper-evident[9] features to help indicate
tampering. Packages can be engineered to help reduce the risks of package
pilferage: Some package constructions are more resistant to pilferage and some
have pilfer indicating seals. Packages may include authentication seals and
use security printing to help indicate that the package and contents are
not counterfeit. Packages also can include anti-theft devices, such as dye-
packs, RFID tags, or electronic article surveillance[10] tags that can be activated
or detected by devices at exit points and require specialized tools to deactivate.
Using packaging in this way is a means of loss prevention.
 Convenience - Packages can have features that add convenience in distribution,
handling, stacking, display, sale, opening, reclosing, use, dispensing, and reuse.
 Portion control - Single serving or single dosage packaging has a precise
amount of contents to control usage. Bulk commodities (such as salt) can be
divided into packages that are a more suitable size for individual households. It is
also aids the control of inventory: selling sealed one-liter-bottles of milk, rather
than having people bring their own bottles to fill themselves.

14. Packaging Strategies

An important part of the product decision making process surrounds the
packaging of the product. An effective packaging strategy can contribute to
the firm’s competitive advantage. Some points to consider when developing a
packaging strategy include

 1. Make sure the packaging is unique.

The packaging must stand out from the crowd and be different from your
competitors.

 2. Make sure it performs the function required.

Part of the firms packaging strategy maybe to make the packaging a
functional part of the product. Some drink cartons follow this strategy, Muller
yogurts corner have a their packaging divided into two sections where
consumers can mix yogurt and fruit as and when they choose. The packaging
 therefore encourages the consumer to interact with the product. If it is a food
product, the packaging must also preserve the product for a period of time.
The packaging must also be safe and tested to make sure consumers can
safely use it. Many users give up using the product if the packaging of it
makes it difficult for the consumer to access and use the product.

 3. Make sure packaging promotes your product and brand.

Packaging must be designed so it promotes the benefits of the product and
promotes the product brand. The brand name must be clearly visible, and the
benefits of the product clear for the consumer to see.

 4, Make sure packaging is identifiable and reinforces the brand.

When the product sits on the shelf of the retailer the packaging must stand out
and be identifiable by the consumer. The packaging of the product must
reinforce not just the product brand but also the corporate brand. Will it follow
a common colour scheme? Will fonts be similar to other products with the
range? In essence does the packing have to follow the family brand strategy?
This is really important as consumer who walk down an aisle of a shop
recognise a product through its packaging strategy and will often pick up a
product without double checking their purchase.

15. Labelling

A label - is an information tag, wrapper, seal, or imprinted message that is

attached to a product or its package. Its main function is to inform customers
about the product’s contents and give directions for its use. There are three
kinds of labels:
• Brand:- gives the brand name, trademark, or logo. It does not supply
sufficient product information.
• Descriptive:- gives information about the product’s use, construction,
care, performance, and other features.
• Grade:- A descriptive label includes date and storage information for
food items. Instructions for proper use and product care are provided
on nonfood items.
16. Multiple packaging
The practice of placing several units of a product (chocolate bars, soups,
yogurt, etc) in one container when offering them for sale in order to increase
total sales, to help introduce a new product or to win consumer acceptance.

17. Obsolescence
Obsolescence is the state of a being which occurs when an object, service or
practice is no longer wanted even though it may still be in good working order.
Obsolescence frequently occurs because a replacement has become
available that is superior in one or more aspects. Obsolete refers to
something that is already disused or discarded, or antiquated. Typically,
obsolescence is preceded by a gradual decline in popularity.

18. Fashion
Fashion a general term for a currently popular style or practice, especially in
clothing, foot wear or accessories. Fashion references to anything that is the
current trend in look and dress up of a person. The more technical term,
costume, has become so linked in the public eye with the term "fashion" that
the more general term "costume" has in popular use mostly been relegated to
special senses like fancy dress or masquerade wear, while the term "fashion"
means clothing generally, and the study of it. Fashion is a term commonly
used to describe a style of clothing worn by most of people of a country. A
fashion usually remains popular for about 1-3 years and then is replaced by
yet another fashion.

• Fashion cycle – a period of time or life span during which the fashion exists,
moving through the five stages from introduction through obsolescence.
When a customer purchases and wears a certain style, that style is
considered accepted. The acceptance leads to the style becoming a fashion!
Fashions DO NOT always survive from year to year

Stages of the Fashion Cycle

 1. Introduction Stage:-
• Designs first previewed during fashion weeks at the major design centers
• New styles, colors, or textures are introduced – begin an upward slope
• Limited number of people accept them
• Fashion leaders wear the styles
• Offered at high prices and produced in small quantities.

2.Rise Stage:-
• Manufacturers who copy designer clothes will reproduce the styles as apparel
that costs less by using less expensive fabrics or minimal detail.
• In the initial incline, fashions are accepted by more people because they can
afford them.
• Mass Production reduces the price of the fashion, and more sales result

3. Peak Stage:-
• Top of the hill
• Fashion is at its most popular and accepted stage.
• Mass production but prices are not necessarily low, prices vary at this stage
• It can survive longer if the fashion becomes a classic.
• Updating or adding new details of design, color, or texture to the look can
keep it in the peak stage.

4. Decline Stage:-
• Consumer demand is decreasing, going down the slope.
• Fashion items available have saturated the market.
• People do not want to pay a high price.
• Fashion retailers mark down the price of merchandise.

5. Obsolescence Stage:-
• The end of the fashion cycle, the bottom of the hill
• Consumers are no longer interested in the fashion and find new looks.
 • Price of the fashion product may be low at this point, but consumers may not
buy the product

19. STYLE:-

A style is a distinctive manner of construction or presentation in any art,

product or endeavor. Style = an item’s characteristics: crew or “v” neck
sweater; it may be in or out of fashion. A fashion is any style that is accepted
and purchased by successive groups of people over a long period of time

20. Branding :

The dictionary definition of “branding” usually refers to the name and image of a
product or service.

It is the process involved in creating a unique name and image for

a product in the consumers' mind, mainly through advertising campaigns with
a consistent theme.

Branding aims to establish a significant and differentiated presence in

the market that attracts and retains loyal customers.

Branding is also defined as the marketing practice of creating a name, symbol

or design that identifies and differentiates a product from other products.

21. Brand name

A Brand name is the name by which a certain brand or make of commodity is
known; esp., the widely advertised name of a widely distributed product
A Brand name can also be defined as a set of perceptions and images that
represent a company, product or service. While many people refer to a brand as
a logo, tag line or audio jingle, a brand is actually much larger. A brand is the
essence or promise of what will be delivered or experienced.

Importantly, brands enable a buyer to easily identify the offerings of a

particular company. Brands are generally developed over time through:
  Advertisements containing consistent messaging
 Recommendations from friends, family members or colleagues
 Interactions with a company and its representatives
 Real-life experiences using a product or service (generally considered the
most important element of establishing a brand)

Once developed, brands provide an umbrella under which many

different products can be offered--providing a company tremendous economic
leverage and strategic advantage in generating awareness of their offerings in
the marketplace.

22. Difference
Brand Mark Trade Mark
Brand name is a word, group of A trade mark is a word, name,
words, letters, or numbers that symbol, device, or a combination of
represent a product or service. these elements that is given legal
(Pepsi, Barbie, Big Mac) protection by the government.

Brand mark cannot be called as All Trademarks are Brand marks

trademark

23. Brand Loyalty :

The extent of the faithfulness of consumers to a particular brand, expressed

through their repeat purchases, irrespective of the marketing pressure generated by
the competing brands.

Brand loyalty, in marketing, consists of a consumer's commitment to

repurchase or otherwise continue using the brand and can be demonstrated by
repeated buying of a product or service, or other positive behaviour’s such as word
of mouth advocacy.

Brand loyalty is more than simple repurchasing, however. Customers may

repurchase a brand due to situational constraints (such as vendor lock-in), a lack of
viable alternatives, or out of convenience. Such loyalty is referred to as "spurious
loyalty". True brand loyalty exists when customers have a high relative attitude
toward the brand which is then exhibited through repurchase behaviour. This type of
loyalty can be a great asset to the firm: customers are willing to pay higher prices,
they may cost less to serve, and can bring new customers to the firm. For example, if
Joe has brand loyalty to Company A he will purchase Company A's products even if
Company B's are cheaper and/or of a higher quality.

24. Brand Equity

It refers to the marketing effects and outcomes that accrue to a product
with its brand name compared with those that would accrue if the same product did
not have the brand name. Because of the well-known brand name, the company can
sometimes charge premium prices from the consumer. And, at the root of these
marketing effects is consumers' knowledge. In other words, consumers' knowledge
about a brand makes manufacturers and advertisers respond differently or adopt
appropriately adept measures for the marketing of the brand. The study of brand
equity is increasingly popular as some marketing researchers have concluded that
brands are one of the most valuable assets a company has Brand equity is one of
the factors which can increase the financial value of a brand to the brand owner,
although not the only one. Elements that can be included in the valuation of brand
equity include (but not limited to): changing market share, profit margins, consumer
recognition of logos and other visual elements, brand language associations made
by consumers, consumers' perceptions of quality and other relevant brand values.

25. Brand Extension Strategy :

Brand Extension Strategy refers to the strategy in which a company uses the
same Brand Name in order to promote products of different category. Many reputed
companies of the world adopt Brand Extension Strategy with the aim of increasing
Brand Equity
 It is commonly found that, a company which has already established its brand
name in the market for a specific product category, uses the same Brand Name at
the time of launching a new product of different category. In this case, the new
product easily develops an acceptance range as the customers are already familiar
with the Brand Name. The success of this Brand Extension Strategy depends on the
extent of customers' association with the Brand Image. In the case, where Brand
Loyalty is significantly present among the customers, there are strong chances that
the new product will be able to gain substantial market share
So, it is very clear that there are certain benefits of Brand Extension Strategy.
If a company launches a new product with a new Brand Name then, the gaining
significant market presence becomes a time consuming affair as the firm is required
to establish the new brand in the market through a completely new way of Brand
Positioning. Establishment of a new brand in the market not only requires time but
also involves great expense. The Brand Extension Strategy can help the companies
in saving both time and money. Moreover, this strategy lowers the financial risk of
launching a new product as the new product is marketed using the established
Brand Equity of the parent brand. The customers' already existing perception about
the brand helps the company in marketing the new product.

26. Characteristics of a Good Brand Name –

A good brand name should possess as many of the following characteristics as
possible
1) It should be distinctive:
The market is filled with over-worked names and over-used
symbols. A unique and distinctive symbol is not only easy to
remember but also a distinguishing feature. “Northstar” shoes have
a distinct name.

2) It should be suggestive:
A well-chosen name or symbol should be suggestive of quality,
or may be associated with superiority or a great personality. The
name VIP Classic for travellers is suggestive of a superior quality
for a distinct class of people. Promise is suggestive of an assurance
of tooth health.
 3) It should be appropriate:
Many products are surrounded by a certain mystique in the
minds of the consumers. Carefree is an appropriate brand name of
a sanitary towel

4) It should be easy to remember:

It should be easy to read, pronounce and spell. Tide, Surf, Gold
Spot are examples of such brand names

5) It should be adaptable to new products:

Videocon is was good brand name for TVs and VCRs but when
it is extended to refrigerators and washing machines, some of the
sales appeal is lost. Hotline was a good name for gas stoves, but
definitely not a suitable name for TVs

6) It should be register able under the Indian laws of Trade Marks

and Copyrights

27. Difference between Family Brand versus Individual Brand

Family Brand:

Family branding is a marketing strategy that involves selling several related products
under one brand name. Family branding is also known as umbrella branding. It
contrasts with individual product branding, in which each product in a portfolio is
given a unique brand name and identity.

There are often economies of scope associated with family branding since several
products can be efficiently promoted with a single advertisement or campaign.
Family branding facilitates new product introductions by evoking a familiar brand
name, which can lead to trial purchase, product acceptance, or other advantages.

Family branding imposes on the brand owner a greater burden to maintain

consistent quality. If the quality of one product in the brand family is compromised, it
could impact on the reputation of all the others. For this reason family branding is
generally limited to product lines that consist of products of similar quality.
Individual Brand:

Individual branding, also called individual product branding or multi branding, is the
marketing strategy of giving each product in a portfolio its own unique brand name.
This contrasts with family branding, corporate branding, and umbrella branding in
which the products in a product line are given a single overarching brand name. The
advantage of individual branding is that each product has an image and identity that
is unique. This facilitates the positioning of each product, by allowing a firm to
position its brands differently.

Examples of individual product branding include Procter & Gamble, which markets
multiple brands such as Pampers, and Unilever, which markets individual brands
such as Dove.

28. Service Marketing :

Services marketing is a subfield of marketing, which can be split into the two main
areas of goods marketing (which includes the marketing of fast moving consumer
goods (FMCG) and durables) and services marketing. Services marketing typically
refers to both business to consumer (B2C) and business to business (B2B) services,
and includes marketing of services like telecommunications services, financial
services, all types of hospitality services, car rental services, air travel, health care
services and professional services.

Services are economic activities offered by one party to another. Often time-based,
performances bring about desired results to recipients, objects, or other assets for
which purchasers have responsibility. In exchange for money, time, and effort,
service customers expect value from access to goods, labor, professional skills,
facilities, networks, and systems; but they do not normally take ownership of any of
the physical elements involved.

There has been a long academic debate on what makes services different from
goods. The historical perspective in the late-eighteen and early-nineteenth centuries
focused on creation and possession of wealth. Classical economists contended that
goods were objects of value over which ownership rights could be established and
exchanged. Ownership implied tangible possession of an object that had been
acquired through purchase, barter or gift from the producer or previous owner and
was legally identifiable as the property of the current owner.

Adam Smith’s famous book, The Wealth of Nations, published in Great Britain in
1776, distinguished between the outputs of what he termed “productive” and
“unproductive” labor. The former, he stated, produced goods that could be stored
after production and subsequently exchanged for money or other items of value. But
unproductive labor, however” honorable,…useful, or… necessary” created services
that perished at the time of production and therefore didn’t contribute to wealth.
Building on this theme, French economist Jean-Baptiste Say argued that production
and consumption were inseparable in services, coining the term “immaterial
products” to describe them.

29. Classification of services

There are a number of ways in which services can be classified. Some of them
are mentioned here.
1. On the basis of the END USER the services can be classified into
following categories:
•Consumer : leisure, hairdressing, personal finance and package holidays
•Business to Business: advertising agencies, printing, accountancy,
Consultancy
•Industrial: Plant Maintenance and repair, work wear and hygiene,
installation and project management.
2. The DEGREE OF TANGIBILITY can be used to classify a service.
•Highly tangible: car rental, vending machines, telecommunications
•Service linked to tangible goods: domestic appliance repair, car
service.
•Highly tangible: psychotherapy, Consultancy , legal services.
3. Services can be broken down into LABOR INTENSIVE (PEOPLE
based) and EQUIPMENT based services. This can also be represented by
degree of contact
•People based services: high contact : education, dental care, restaurants and
medical services
•Equipment based: low contact: automatic car wash, launderette, vending
machine, cinema.
4. The EXPERTISE and SKILLS of the service provider can be broken
down into the following categories:
•Professional: medical services, legal services, accountancy, tutoring.
•Non Professional: baby sitting, care taking, and casual labour.

5.The overall BUSINESS ORIENTATION ( PROFIT) is a recognized means of

classifications:
•Not for profit: The Scouts Association, charities, and public sector
leisure facilities.
•Commercial: banks, airlines, tour operators, hotel and catering
Services.