Entities such as people, places, and organizations can also be products. A political candidate provides promises of future performance in exchange for your vote. A country can promise low taxes and operating expenses to attract businesses which provide jobs.
These together make up the product offering.
E.g., the product offering of an automobile would include the core product of some bundle of tangible features at some price and the augmented product which includes the ministrations of the salesperson, the expectations that the particular dealership does good service work, the convenient location of the dealership, and such.
E.g., the core product of a life insurance policy includes a particular contractual agreement to provide so much death benefit, so much annuity value, etc. for some set price, but many products are purchased because buyers appreciate the trustworthiness of a particular sales agent, who is part of the augmented product.
Indeed, many products are differentiated not on the core features, but on the augmented features.
Although many sorts of products could fall in more than one of these categories, these classifications are important conceptually because they can affect how a product is designed, promoted, distributed, and priced. For example, if you owned a wrecker (tow truck) service, would it be at all beneficial to advertise your services and to offer the lowest prices? Generally, people would have an interest in hearing about your service at the particular time when the need arises; in most cases, they probably would not shop around for the best price. You would therefore merely need to advertise in places like the Yellow Pages and to set your prices at a "customary" rate. Rather than focus on long term relationships with final consumers of your product, you would focus more on maintaining good relationships with local and state police departments and services like AAA, who can provide referrals to your business.
Products have features or attributes which provide benefits to the buyer. Note that benefits, not features, provide solutions to a buyer's needs. People buy a bundle of benefits, not features.
A reason that many people fail as salespeople is that they attempt to sell features rather than benefits.
conformance to specifications
Two elements of quality:
Note that value has to do with the difference between the buyer's expectations and the buyer's cost of obtaining the product.
Should a marketer provide the highest level of quality possible? Remember that the meaning of the term is relative. Relate to the idea of value. Remember that providing more of some attribute merely makes the product more expensive, not better, if it does not provide additional value to the prospective buyer.
1) a philosophy that quality requires a commitment at all levels of an organization and is a continuous and dynamic process
2) a dangerous buzzword that was adopted by many ill-fated American companies who listened to too many high-paid consultants
Don't ever forget: quality is relative, and merely providing more of some attribute without a concurrent increase in value to the customer is a pointless drain on human and physical resources, not to mention profits.
Recall that quality has to do with the ability of a product closely meet the needs of the buyer, not with having more of some attribute. If the body of a ball-point pen is manufactured to a diameter of 0.24995 - 0.25005 inches (i.e., a tolerance in the diameter of plus or minus 0.00005 inches), would this indicate that the pen is of high quality? Most of us would be unwilling to pay $12 for a pen if one which looked similar to us sold for 39-cents. Such a feature (holding a close tolerance on diameter) provides no benefit to the buyer, and does not, therefore, add value to the product. I.e., such a pen does not conform to the specifications set by the buyer if it does not meet the required price specification.
The idea of TQM is that marketing, and therefore the ability to best meet the needs of the buyer, must be pervasive and continuous throughout the selling organization.
PRODUCT MIX DECISIONS
Product Mix Decisions
product manager, brand manager
which identifies one seller to differentiate it from competitors
Kim Berley owned a diner doing business as "Berley's Bar and Grill." When Kim wanted to retire due to a sudden illness, she was unable to find a local buyer for the business even though Berley's had a very good reputation and attracted patrons from a very long distance. Coincidentally, Polly Wog had recently received all licenses and had begun installing equipment for her own diner in another town, to be called "'Wog's Bar and Grill." Polly would have wanted to purchase Berley's because it had so many loyal customers and such a good reputation. Unfortunately, it was now too late to back out of her obligations to her own business. Berley's restaurant equipment was sold to a used equipment supply house and the building was put up for lease. Polly, however, believed that the name " Berley's Bar and Grill" sounded a lot better than " Wog's" and that the name would immediately reflect the reputation of Berley's and would quickly attract many of the customers who had frequented Berley's. Kim agreed to sell Polly all rights to use the name " Berley's Bar and Grill." for $5,000.
Consider the amount of equity associated with brand names such as Kleenex, Coke, or Xerox. The parent companies of these brand names have invested a considerable amount of effort and money, over a very long period of time, to develop a brand name which represents specific feelings and beliefs in people's minds. The owner of the brand has a right and an obligation to protect that equity, and the future earning power that it holds, as much as it has an obligation to protect any other asset in the organization.
The Western economy has been allowed to flourish perhaps in part because of legal and cultural protection that is given to brand equity. Where piracy of brand names is permitted, it is difficult for a single company to emerge as a producer of goods with high consumer value (high quality at low price). Pirated goods generally seem to be grossly inferior to the name brand, with the result that the consumer obtains poor value, no one has any incentive to produce goods of high quality for a reasonable price, and Western brand name producers have a disincentive to sell products in areas where branding has no legal or cultural protection.
Manufacturer branding (national brand)
Private distributor branding (store brand, dealer brand)