Fundamentals of Marketing | ÀÅŔ

What is product? 21, 18

A product as anything that can be offered to a market for attention, acquisition, use, or consumption that might
satisfy a want or need. Products include more than just tangible objects, such as cars, computers, or cell phones.
Broadly defined, “products” also include services, events, persons, places, organizations, ideas, or a mixture of
these.

Services:
Services are a form of product that consists of activities, benefits, or satisfactions offered for sale that are
essentially intangible and do not result in the ownership of anything. Examples include banking, hotel services,
airline travel, retail, wireless communication, and home repair services.

Discuss the levels of product. 21

5 levels of Products:
1. Core Product: Fulfils basic benefit consumer's want. This refers
to the basic product. Here, the focus is on the purpose for which
the product is intended.
2. Generic Product: Provides actual product with tangible
qualities. This represents all the qualities of product.
3. Expected Level: Offer generic product plus other attributes
consumers want. This refers to all the benefits consumers
expects to get when the purchase a product.
4. Augmented Product: Product gives more than physical
product. This refers to all the additional factors which set the
product apart from competition, that is its brand identify and
image.
5. Potential Product: Provides additional tangible and intangible
features. This refers to the augmentations and transformation
that the product may undergo in the future.

The whole-product concept.

Core Product: The essential mtivational benefit the
customer is purchasing. It's waht the customer wants
to get most.

Actual Product: The physical and intangible properties

or characteristics the product takes on. This can include
attributes such as the materials, styling, and branding.
It's what the customer actually gets to satisfy the desire
for the motivational benefit.

Augmented Product: These are extra attibutes and

features that are not part of the actual product but may
be offered to make the offering more attractive, to
speed purchase desisions, and to much or differentiate
the actual product from the competition.

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Classification of Product:

Classify product on the basis of shopping habits, durability and industrial goods. 18
Product can be also classified as following:

Classification of products on the basis of shopping habits:

Based on the first variable, the shopping habits, the products can be classified into convenience goods,
shopping goods and unsought goods.
At the end of the week when you go to the supermarket to complete the necessary shopping for the next
week, you probably buy foods, soaps etc. This kind of product, which has become a habit and for which you don't
think too much before buying are part of the convenience goods category. Common examples are FMCG (Fast-
Moving consumer goods) products.

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Another example would be when you enter into a shop, and when going to the cash machine you see some
umbrellas and take one just because outside was raining and you went out unprepared. This also an excellent
example of impulse buying. Generally, for convenience goods, once customers make a choice for their preferred
brand, then stay loyal to that brand because it is convenient to keep repeating the choice over time. Other examples
of such convenience purchases include bread, cold drinks, chewing gum etc.
The shopping goods are another category of products. Compared with the convenience goods, the
shopping goods are not so frequent. A relevant example can be clothing, electronics etc. This category relies heavily
on advertising and trained sales people who can influence customers choices.
For the unsought goods consumers don't put much thought into purchasing them and generally don't have
compelling impulse to buy them. An example in this category would be life insurances.

Classification of products on the basis of durability and tangibility:

Based on the second variable of durability and tangibility there are nondurable and durable goods as well
as services.
The nondurable category consists of tangible goods that are low priced and purchased frequently such as
shampoos, deodorants, etc. Compared with these ones, the durable goods are also tangible goods but are targeted
for many uses. For this category, more personal selling is required as well as guarantee to be provided, resulting in
higher margin. Relevant example can be the couches or chains. About the third category, i.e., services.

Classification of products on the basis on industrial consumption:

The last category of products mentioned as the industrial goods classification involves the materials (raw
materials such as fabric, button, sewing thread, etc.) and parts (collar, cuff, placket, hep, front part, back part, etc.),
capital items such as installations and equipment (cranes, bulldozers), accessory equipment (hand tools, computers,
calculators), process materials (sewing machine, iron machine, metal detector, etc.) operating supplies (shirt, pant,
etc.).

Product and Service Classifications

Products and services fall into two broad classes based on the types of consumers that use them: consumer
products and industrial products. Products also include other marketable entities such as experiences,
organizations, persons, places, and ideas.

Describe marketing characteristics of consumer products. 20, 18

Explain the classification of consumer products. 22, 20, 18
A. Consumer Products: 22, 20, 18
Consumer products are products and services bought by final consumers for personal
consumption. Marketers usually classify these products and services further based on how consumers go
about buying them. Consumer products include convenience products, shopping products, specialty
products, and unsought products.
a. Convenience products: Convenience products are frequently purchased, immediate, and low-priced
items like laundry detergent, candy, magazines, and fast food. Marketers strategically place them in
multiple locations to make them readily available to customers, reducing comparison and buying effort.

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b. Shopping products: Shopping products are less frequently purchased consumer goods and services
that customers carefully compare based on suitability, quality, price, and style. Examples include
furniture, clothing, used cars, major appliances, and hotel and airline services. Marketers distribute
these products through fewer outlets but provide deeper sales support.
c. Specialty products: Specialty products are unique consumer goods or services with distinctive brand
names, such as cars, photographic equipment, designer clothing, or medical services. Buyers typically
invest time in reaching dealers carrying these products, rather than comparing them.
d. Unsought products: Unsought products are consumer goods or services that consumers are unaware
of but not typically purchase. Major innovations are often unsought until they are made known through
advertising. Examples include life insurance, preplanned funeral services, and blood donations to the
Red Cross.

Discuss the classification of industrial Product. 21, 19

B. Industrial Products: 21, 19
Industrial products are those purchased for further processing or for use in conducting a business.
The three groups of industrial products and services include materials and parts, capital items, and supplies
and services.
1. Materials and parts: Materials and parts include raw materials and manufactured materials and parts.
Raw materials consist of farm products (wheat, cotton, livestock, fruits, vegetables) and natural
products (fish, lumber, crude petroleum, iron ore). Manufactured materials and parts consist of
component materials (iron, yarn, cement, wires) and component parts (small motors, tires, castings).
Most manufactured materials and parts are sold directly to industrial users. Price and service are the
major marketing factors; branding and advertising tend to be less important.
2. Capital items are industrial products that aid in the buyer’s production or operations, including
installations and accessory equipment. Installations consist of major purchases such as buildings
(factories, offices) and fixed equipment (generators, drill presses, large computer systems, elevators).
Accessory equipment includes portable factory equipment and tools (hand tools, lift trucks) and office
equipment (computers, fax machines, desks). They have a shorter life than installations and simply aid
in the production process.
3. Supplies and services:
a. Supplies include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance
items (paint, nails, brooms). Supplies are the convenience products of the industrial field because
they are usually purchased with a minimum of effort or comparison.
b. Business services include maintenance and repair services (window cleaning, computer repair) and
business advisory services (legal, management consulting, advertising). Such services are usually
supplied under contract.

What are the differences between product and services? 22

Product Service
Products are objects or systems made available for Services are transactions where no physical goods are
consumer. transferred from the seller to the buyer.
Tangible. Intangible.
Products are manufactured, stored, and transported. Cannot be manufactured, stored, and transported.
Ex. Electronic devices, furniture, food items etc. Ex. Cleaning, car repair, medical checkups, haircuts etc.
Can be returned or replaced. Cannot be returned or replaced.
Products sold can be identical. Each delivery of a particular service is never exactly
the same.

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Draw the product life cycle. 22

What is branding? 20
A name, term, sign, symbol, design, or a combination of these, that identifies the products or services of
one seller or group of sellers and differentiates them from those of competitors.
Consumers view a brand as an important part of a product, and branding can add value to a product.
Customers attach meanings to brands and develop brand relationships. Brands have meaning well beyond a
product’s physical attributes.

Discuss branding strategy. 20

Brand Strategy
▪ Line Extension: Existing brand names extended to new forms, sizes, and flavors of an existing product
category.
▪ Brand Extension: Existing brand names extended to new product categories.
▪ Multibrands: New brand names introduced in the same product category. P&G sells six brands of laundry
detergent (Tide, Cheer, Gain, Era, Dreft, and Ivory), five brands of shampoo (Pantene, Head & Shoulders,
Aussie, Herbal Essences, and Infusium); and four brands of dishwashing detergent (Dawn, Ivory, Joy, and
Cascade).
▪ New Brands: New brand names in new product categories.
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Packaging
Packaging involves designing and producing the container or wrapper for a product. Traditionally, the
primary function of the package was to hold and protect the product. In recent times, however, numerous factors
have made packaging an important marketing tool as well. Increased competition and clutter on retail store shelves
means that packages must now perform many sales tasks—from attracting attention, to describing the product, to
making the sale.

Define “labelling” with example. Why care labeling is important? 20

Labeling
Labels range from simple tags attached to products to complex graphics that are part of the packaging. They
perform several functions. At the very least, the label identifies the product or brand, such as the name Sunkist
stamped on oranges. The label might also describe several things about the product—who made it, where it was
made, when it was made, its contents, how it is to be used, and how to use it safely. Finally, the label might help
to promote the brand, support its positioning, and connect with customers. For many companies, labels have
become an important element in broader marketing campaigns. Labels and brand logos can support the brand’s
positioning and add personality to the brand.

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