PRINCIPLES

OF MARKETING

Defining a Product and Differentiating

Product, Services, and Experiences
What is a Product?

• Product is anything that can be offered in a market for attention,

acquisition, use, or consumption that might satisfy a need or want.

Includes:
Physical object  • Services • Ideas
Events • Person
Places • Organization

• For Kotler, the definition of a product goes way beyond being a physical object
or a service. He defines a product as anything that can meet a need or a want.
This means that even a retail store or a customer service representative is
considered a product.
1. Core Benefit
➢ The core benefit is the fundamental need or want that the customer satisfies when they buy
the product.

For example, the core benefit of a hotel is to provide somewhere to rest or sleep when away
from home.

2. Generic Product
➢ The generic product is a basic version of the product made up of only those features
necessary for it to function.

In a hotel example, this could mean a bed, towels, a bathroom, a mirror, and a wardrobe.

3. Expected Product
➢ The expected product is the set of features that the customers expect when they buy the
product.
 In a hotel example, this would include clean sheets, some clean towels, Wi-fi, and a clean
bathroom.
4. Augmented Product
➢ The augmented product refers to any product variations, extra features, or services that
help differentiate the product from its competitors.
In a hotel example, this could be the inclusion of a concierge service or a free map of the
5. Potential Product
➢ The potential product includes all augmentations and transformations the product might
undergo in the future. In simple language, this means that to continue to surprise and
delight customers the product must be augmented.In a hotel, this could mean a different gift placed in
the room each time a customer stays.
For example, it could be some chocolates on one occasion, and some luxury water on another.
By continuing to augment its product in this way the hotel will continue to delight and surprise
the customer.
Product Classification
A product is anything offered for sale for the purpose of satisfying a want or need on
both side of the exchange process. Products are classified on two types on the basis of customer
characteristics.
Products that are marketed can be generally classified according to use, differentiation,
type, and durability.
1. According to use: Consumer and Industrial Goods
Consumer goods are goods that are purchased for personal consumption and/or
household use.
Examples: Instant noodles, biscuits, milk, detergent soap, shampoo, and other similar
items
Industrial goods are purchased in order to make other goods, to serve as a raw material
or input in the production of other goods.
Examples: Aluminum (used to manufacture kitchen equipment and cans); electronic
cables and wires (serve as electrical conduits for home appliances)
2. According to Differentiation: Undifferentiated and Differentiated Goods

Undifferentiated goods are products whose physical characteristics are so identical,

that it would be difficult, if not impossible, to distinguish one purchased from one vendor or
another. Most undifferentiated goods are products that are sourced from nature.
Example: salt bought from the two different vendors’ looks, feels, and tastes identical.
3. According to durability: Consumable, Semi-Durable, and Durable Goods

Consumable is a product whose benefit can only be used by a consumer for a short
period of time, sometimes only a few minutes. Consumables a such as food, drinks

PROJECT TIMELINE
Semi-durables provide benefits to the consumer for a longer period of time, usually
spanning several months. Semi-durables are manufactured for long-term use by consumer.

Examples of semi-durables are clothes, shoes, belts, jackets, etc.

Durables are products that are manufactured to last a long time. They are capable of
providing consumers with years of beneficial use. Durables are usually expensive, and many,
therefore, require an augmented product to market them effectively.

Examples of durable goods

are automobiles, houses, home appliances, customer electronics, furniture, sports equipment,
and toys.
4. According to Type: Convenience, Shopping, Specialty,
and Unsought Goods

Convenience goods are products that are purchased frequently, usually inexpensive,
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and do not require much purchase effort and evaluation. 03
Examples are newspapers, gum, and candy.

Shopping goods are purchased less frequently than convenience goods, are relatively
more expensive, and require some amount of information search and evaluation prior to
purchase. Consumers of shopping goods consider features, evaluate attributes, and compare
prices.

Examples of shopping goods are shoes, clothes, and handbags.

Specialty goods are goods that require an unusually large effort on the part of
consumers to acquire.
Consumers are usually willing to travel great distances to where these
goods can be purchased.

Examples are branded luxury merchandise, works of art, automobiles,

and homes.

Unsought goods are goods that consumers seldom actively look for, and are usually
purchased for extraordinary reasons, such as fear or adversity, rather than desire.

Examples are
investments, memorial plans, and life insurance

What is Service? CUSTOMERS

Services are form of product that consist of activities, benefits, or satisfaction offered
for sale that are essentially intangible and do not result in the ownership of anything
Services are generally considered more difficult to market due to its four
major attributes:

1. Intangibility
Physical products are tangible. As such, they can be inspected by consumers prior to
purchase. On the other hand, services are intangible. It would, therefore, not be possible to
“sample” a lawyer’s legal skills, or a doctor’s ability to handle a surgical operation before one
decides to retain a lawyer or a doctor. This is the first reason that makes the marketing of
services difficult.

2. Variability
Because services are performed by human beings, no service provider can render the
same service in exactly the same way every single time. A college professor, when giving the
same lecture in two separate sessions, cannot use the exact words and gestures for both
sessions.
3. Inseparability
Because services are rendered by people, the service provider must be present each and
every time the service is provided. Services are rendered and consumed simultaneously. As a
lawyer gives legal advice to a client, legal services are being “produced” and simultaneously
“consumed” by the client. This limits the ability to render the service to a large number of people, as the
service provider’s presence is always a necessary component in the rendering of
the service.

Perishability
Unconsumed services cannot be stored or warehoused. When a 40-room boutique hotel
with a restaurant on its ground floor operates on a particular day, unconsumed or unused
ingredients for food production, unsold bottles of soda, or unused coffee beans can be stored,
available for use or sale the following day
Capacity management can be implemented in various ways. The airline industry, for
example, uses algorithms that monitor and change ticket prices for various destinations
depending on the time and date of ticket booking, and availability of seats. This results in
frequent price movements.

What is Experience?

A product which involves experiential aspects of consumption rather than utilitarian

ones. This type of product allows consumers to engage in fantasies, feelings and fun and often
carries subjective meanings and characteristics (Hirschman and Holbrook, 1982).
Represent what buying the product or service will do for the customer
Product Experience

Product experience is the overall value of a product or service to customers. This is

defined in terms of customer perceptions as they use the product or service in a variety
of contexts. Product experience is a component of customer experience, a broader concept that
includes all interactions between your firm and the customer. Product experience is mainly
achieved through design and quality control.

Customer experience is the impression your customers have of your brand as a whole
throughout all aspects of the buyer's journey. It results in their view of your brand and impacts
factors related to your bottom-line including revenue.
The two primary touch points that create the customer experience are people and
product.
Importance of Customer Experience
A remarkable customer experience is critical to the sustained growth of any business.
A positive customer experience promotes loyalty, helps you retain customers, and encourages
brand advocacy.
 Submitted by

Rhovic Jhames A. Faigmani and Gicky Natulla

Submitted to

Ms.Maristela Ramos