MGTA02H3 Chapter Notes - Chapter 3: Volkswagen, Everett Rogers, Wedding Dress
Chapter 3
Products: The Things Customers Need and Want
Products: Filling Needs and Satisfying Wants
Businesses must focus on customers
oCustomers provide revenue
oRevenue leads to profit
oBusinesses must identify who is the customer
CBC Radio, White Coat, Black Art
oBeing lonely = smoking 15 cigarettes per day – Dr. Brian Goldman
Tracey Crouch – The honourable minister of loneliness – UK (2018)
Japan – Working on a robot for assistants/companions
Marketing Myopia
o'Marketing myopia' is a term coined by Theodore Levitt. A business suffers from marketing
myopia when a company views marketing strictly from the standpoint of selling a specific
product rather than from the standpoint of fulfilling customer needs.
Marketing Mix
oProduct
oPrice
oPromotion
oPlace
Product: A good or service that fills a buyer’s needs or satisfies a want
oWhat a purchaser hopes to get, or believes they are getting, when they enter into a financial
transaction
oMUST HAVE THREE ELEMENTS TO FULFILL THE NEEDS OR WANTS:
Features
Benefits
Functions
1. Product as a Value Package (Function, Features, Benefits)
2. Different types of Products
oIndustrial vs. Consumer
oConvenience, shopping, specialty
3. Product Life Cycle Theory
oIntroduction, Growth, Maturity, Decline
Function: What a product is intended to do
oDescribes a good most minimally
Features: Additional attributes or offerings which contributes to improved usefulness or experience
to a product
oThis builds on the function and makes it seem better; improve the usefulness or experience
of a good or service
oImprove
oFeatures can attract different segments of a target population
find more resources at oneclass.com
find more resources at oneclass.com
Benefits: The advantages that are derived from purchasing a product
oIntangible – status, image, reputation
oLifestyle advantages, typically
oBenefit perceptions occur inside a person’s head
oSum of thoughts, feelings, comfort, convenience, and sense of achievement
Product Value:
oProduct Value = Function + Feature + Benefits
Value: The regard with which a product is held by potential buyers, expressed as its financial worth
Value Package: The bundle of tangible and intangible functions, features, benefits that a business
offers to buyers of a product
oImproving any of the three things in FFB can improve the value package value.
ofunction + features + benefits = “value package”
Understanding Different Products and Their Consumers
Products
oIndustrial
Purchased by other businesses
Used to produce other products
Small number of knowledgeable buyers
Function is key criterion and Price is important criterion
oConsumer
Purchased by individuals, generally for their own use
Large number of consumers, important, packaging important, branding important
Convenience
Inexpensive and frequently purchased; little time and effort; consumer
quickly and regularly
Shopping
More expensive, bought less frequently than convenience products
More features than convenience products
Consumers spend more time evaluating alternatives
Specialty/Luxury
Consumers spend time and effort to find exactly what they want
Importance to the consumer
Wedding gown, engagement ring
Not all products attract the same number or kind of buyers
Some products are bought after lots of research, some are bought after expenditure of time and
emotional investment
Consumer Products vs. Industrial Products
Consumer Products: Products purchased by the end user, for personal use
find more resources at oneclass.com
find more resources at oneclass.com
oConsumers are not entirely uninterested or uninformed about what’s inside the product,
but they aren’t experts
oConsumer choices are based on: taste, habit, or the ability to recall product name
Convenience Products:
oInexpensive consumer goods or services which are purchased frequently and with little
expenditure of time and effort
oFMCG – fast moving consumer goods
oInexpensive goods which are purchased relatively frequently and with little expenditure of
time and effort
oNewspapers, deodorants, coffee, chocolate bar
oMust be inexpensive – this is the key to marketing such products
Shopping Products:
oProducts that are moderately expensive, and purchased infrequently causing consumers
to spend time comparing features, benefits, and price
oCars, laptops; insurance or contractor
Speciality Products:
oGoods to which consumers will attach a great deal of importance and for which they will
spend a lot of time and effort find exactly what they want
oEngagement ring for example
oThe key to selling speciality products Is to stress the benefits that will come from using a
particular supplier
Industrial Products: The parts, ingredients, materials, and supplies that are bought by one business
from another, in the process of making consumer products
oCardboard used for making cereal boxes
oThe things that go into making the product, transporting the product, etc.
oThey are not purchased by the end customer
oSold to small number of buyers
oThese products to not need to be colourfully packaged
Important to know what kind of products are being sold because it affects the marketing mix factors
Product Obsolescence
Diffusion of innovations theory: Explains how an idea of product gains momentum and spreads
through a population over time – Everett Rogers
People who are first to try a new product are different from the ones who try the new product later
Five Types of People:
oInnovators: People who want to be the first to try something new – take few risks, and not
much needed to appeal to this group
oEarly Adopters: Aware of the need to change and comfortable adopting new ideas (how-to
manuals, information sheets); don’t need too much convincing
oEarly Majority: Don’t lead, but are willing to adopt new ideas or try new products before the
average person – they need evidence to see that an innovation works before adopting it
(success stories, evidence of the innovation’s effectiveness)
find more resources at oneclass.com
find more resources at oneclass.com
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MGTA02H3 Full Course Notes
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