1003MKT Lecture 6: Week 6 Marketing Lecture Notes
30 May 2018
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Week 5 Marketing Lecture Notes
Product
Notes from slide 1:
Consumer products can be classified according to the way in which the consumer buys
them, or the amount of effort they are prepared to put into obtaining the product. Most
consumer products fall into one of the following 4 categories, and this has implications for
your distribution strategy and other elements of the marketing mix:
1. Convenience products, also known as fast-moving consumer goods (FMCG), are
inexpensive, frequently purchased consumer products that are brought with little
involvement in the decision-making process. Convenience products, by definition,
need to be available conveniently from a wide range or retailers, including
supermarkets, corner stores, or petrol stations. Being cheap, they usually depend on
a high volume of sales to generate a reasonable profit. They are often self-service
products and so packaging plays a major role in grabbing consumers’ attention
2. Shopping products are irregularly purchased items that involve moderate to high
involvement with the decision-making process: consumers will often visit a number
of stores, looking at the range and comparing items based on features, quality and
price. Examples of shopping products include electrical appliances, furniture,
cameras and clothing
3. Specialty products have (perceived) unique characteristics that are highly desired by
their buyers. The purchaser of a specialty product usually knows exactly what they
want-they are not interested in comparing brands or considering alternatives e.g. a
Rolex watch, an Apply product, or a Porsche. Consumers are willing to expand
considerable effort to obtain specialty products, which means these brands can have
very few or limited distribution outlets, keeping distribution costs low. The main
characteristics of specialty products are:
o They are pre-selected by the consumer
o There are no close substitutes or alternatives (in their perception)
o They are available in a limited number of outlets
o They are purchased infrequently
o They often have high profit margins
4. Unsought products are those purchased to solve a sudden, unexpected need, and as
such are usually purchased with low engagement in the decision-making process. For
example, a car breakdown usually involves seeking the nearest available mechanic.
Unsought products involve a sudden problem, products of which the customer is
unaware, and products that people do not necessarily think about buying
Product
• A good, service, or idea offered to the market for exchange
• Do you need to have the best product in the category to become the leader in the
category?
Notes from slide 4:
• A product is defined as a good, service, person or idea offered to the market for
exchange. Clearly, the product plays a vital role in the success of a business. Without
a product, a firm has nothing to offer, but in your opinion, is it always the most
important “P”?
• Goods are physical, tangible offering that are capable of being delivered to a
customer and the purchase of a good usually involves the transfer of ownership from
firm to customer, that is, when the customer buys a good, they usually become the
owner of the good
• Services are intangible offerings that cannot be touched, e.g. haircuts, legal
representation, and lectures, and do not involve ownership; instead, you experience
a service
Total product concept
Notes from slide 5:
• The total product concept- when customer choose a product, they do not purchase
a ‘thing’; rather they buy a solution to a problem- a need or want that has been
recognized by but not been fulfilled. This gap provides motivation to purchase, and
the purchase provides a solution to their recognized need. It is this ability to satisfy a
need or want that makes the product of value. Furthermore, a product can be
described as a bundle of attributes, or bundle of benefits, and the total product
concept helps us understand the different levels involved
• To make a product or more value than competing offerings, and to understand how
the product’s value is perceived by potential customers, it is useful to describe the
product in terms of four levels; core product, expected product, augmented product,
and potential product. This is known as the total product concept.
• The core product- is the key benefit they want from a product. E.g. the core or
generic product for a Lexus car is travel, or getting a person from point A to point B.
When we examine our product at this very broad level, we can begin to understand
that our competition is also much broader than just direct brand competitors. What
other types of services and solutions can get a person from point A to B?
• The expected product- describes the attributes that can be reasonably expected
around the core product; the attributes that fulfill the customer’s most basic
expectations of the product. E.g. the expected product for the Lexus might include
the brand, the style, speed, color choice, the entertainment system, and extras
including air conditioning, cruise control, automatic braking, and power steering as
well as its safety and quality record. These are norms or standards that a customer
would expect from any given product or service, based on their experiences,
company promises and other sources, and if these aren’t delivered, the result will be
dissatisfaction, possibly negative word of mouth, complaint behavior, and so on.
• The augmented product- the augmented product level takes in extra features that
enable firms to significantly differentiate their offering from those of competitors. It
is often the augmented features that form the main reason for choosing a particular
brand. E.g. the augmented product for the Lexus may include an extensive warranty
and product support package, a customer assistance telephone number and a loyalty
program with exclusive membership benefits. For many customers, the social status
of being able to afford a luxury car would also be part of the appeal and augmented
features, even though they may not admit to this. Over time, features that form part
of the augmented product level can become so widely incorporated into the product
that they become part of the expected product layer. Hence the need for firms to
continue to strive towards new and different attractions to add to their brand
• The potential product- the potential product is mainly for the company’s use, to
consider how the product might transform in future e.g. driverless cars, or 3D
printed cars. The potential product feature may in future become part of the
expected or augmented product. This includes features that are being developed,
planned or prototyped, as well as features that have not yet been conceived
4 Levels of A product: The Total Product Concept
1. Core product: the core or key benefit (a “solution to a problem”)
2. Expected product: basic expectations of a product
3. Augmented product: additional benefits that differentiate
4. Potential product: possible augmentations the product might undergo in future
Packaging
1. Protects the product and the consumer
2. Promotes the product
3. Differentiates
4. Legal requirements: contents, country-of- origin, instructions for use, data marking,
barcode etc.
Notes from slide 7:
• Most products need some kind of packaging to make them more convenient to
store, and to protect them from waste, damage or spoilage or prolong the shelf life
e.g. aseptic packaging. As well as its functional features, such as making a product
easier to use (e.g. Capilano packaged their honey in a squeezable and upside down
plastic containers), packaging also plays an important role in promoting the product,
particularly for FMCG categories
• When packaging is done well it forms parts of the augmented product. It can gain
people’s attention at the retail store, make customers aware of the product and/or
its contents, differentiate it from competitors’ offerings and help build a particular
message or image about the product.
• For some products, the packaging may be more expensive than the cost to actually
produce the product. This is the case for many perfumes and some food items (e.g.
Voss water). For other products, the distinct packaging is totally integrated into the
product/s brand image, which helps to differentiate it from the competitors’
Document Summary
Consumer products can be classified according to the way in which the consumer buys them, or the amount of effort they are prepared to put into obtaining the product. Convenience products, by definition, need to be available conveniently from a wide range or retailers, including supermarkets, corner stores, or petrol stations. Being cheap, they usually depend on a high volume of sales to generate a reasonable profit. Examples of shopping products include electrical appliances, furniture, cameras and clothing: specialty products have (perceived) unique characteristics that are highly desired by their buyers. The purchaser of a specialty product usually knows exactly what they want-they are not interested in comparing brands or considering alternatives e. g. a. Rolex watch, an apply product, or a porsche. Consumers are willing to expand considerable effort to obtain specialty products, which means these brands can have very few or limited distribution outlets, keeping distribution costs low.
