PRODUCT

What do organizations market? As consumers, we are most familiar with the marketing of goods and services. Other than
these, marketing organizations also market experiences, ideas, advocacies, and even personalities.

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.

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.
Products or goods are physically tangible items. As such, they are generally perceivable by the human senses and can
therefore, be inspected prior to purchase.

Customers will choose a product based on their perceived value of it. The customer is satisfied if the product’s actual value
meets or exceeds their expectations. If the product’s actual value falls below their expectations they will be dissatisfied.

Five Product Levels (Kotler)

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.
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 town in every room.
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)

It would not be possible to say, however, that a product is always a consumer good or an industrial good. A good that is
ordinarily a consumer good can also be used as an industrial good, and vice-versa. For example, when a consumer buys sugar
from the supermarket and uses this sugar to sweeten his/her coffee, the sugar in this particular case is a consumer good.
However, if the sugar is added to flour, chocolate syrup, eggs, and walnuts to make brownies and eventually sold, the sugar
in this case is an industrial good.

In other words, physical characteristics alone cannot determine whether a product is a consumer good or an industrial good.
One should also consider how the product is ultimately used.

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.

Differentiated goods are varied in their characteristics and features that make them distinguishable from one another.
Example: Car, the appearance and the features vary because of the ability of the manufacturers to successfully distinguish
their products from competitors which is called branding.

3. According to durability: Consumable, Semi-Durable, and Durable Goods

Durability refers to the length of time a consumer can derive benefit from the product or good purchased.
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
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, and do not require much purchase
effort and evaluation. Examples are newspapers, gum, and candy.
They key to the successful marketing of convenience goods is its availability in as many retail outlets as possible, catering to
consumer need where and when it arises.

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.
The successful marketing of shopping goods depends on intensive advertising, well-trained salespersons, and positioning
company products as superior alternatives to competitors’ products.

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.
The successful marketing of specialty goods requires the promotion of strong brand image and identities.

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. These goods
require advertising and aggressive selling efforts and are usually marketed using highly-trained and persuasive salespersons.

What is Service?
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.
How do marketers address the intangible attribute of services? Service marketers commonly resort to the practice of making
their services tangible. Although lawyers and doctors cannot give their potential clients a preview of their service skills, they
retail large luxurious offices manned by smartly dressed staff. They maintain extensive and updated legal and medical
libraries that are readily visible to visitors. They also display diplomas, certifications, and other documentary evidence of
their training and expertise, and readily give out professionally prepared business cards with Latin titles after their names.
Moreover, they are always professional in attire and conduct. These give their potential clients an impression of their
competence and capability to render the service required.

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.
How do marketing organizations address the problem of service variability? The problem can best be addressed by
developing and implementing standard operating procedures on how the service should be rendered. A fast-food counter
clerk, for example, follows a script in greeting customers, asking orders, reading and confirming the order, receiving payment,
etc. by following a procedure, incidences of variability are reduced.
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. To maximize
revenues, service companies institute a combination of standardized systems and procedures, and service franchising.
4. 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. However, if on the same day, only 32 of its 40 rooms
are occupied by guests, the eight unsold, unoccupied rooms cannot be stored and added to its 40-room availability the next
day. The eight unsold, unoccupied rooms have “perished.” they represent lost revenues for the day that can never be
recovered. Similarly, the unsold seats of a 250-seat commercial jet airliner flying from Manila to Los Angeles “perishes” as
soon as the plane takes off from the Ninoy Aquino International Airport.

How can marketers maximize revenues and avoid lost service Perishability? The key is the implementation of a marketing
strategy called capacity management, or achieving a proper balance between service demand (customer needs) and service
supply (service availability). If service demand exceeds service supply, the excess demand cannot be accommodated by
supply; potential revenues are lost. On the other hand, if service supply exceeds service demand, the excess supply
“perishes” and represents unrecoverable revenues.
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. Depending on supply and demand, ticket prices for some destinations change in
a matter of seconds. In traditional capacity management, international long-distance carriers have been known to offer
substantial discounts when are made at odd hours (usually late nights to early morning). this is to relieve demand during
peak hours. Concert ticket prices vary by location in order to maximize the venue’s seating capacity, thereby reducing the
entertainment service’s “Perishability”. Some restaurants also offer discounted rates for patrons dining during low-capacity
hours of the day.

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
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.
Are you blown away by the performance of the product? Are you delighted by the attention a customer support rep gives
you to help solve your problem? These are some general examples of what factors are at play when creating a great customer
experience.

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.
Today, customers have the power, not the sellers.
Who gave them this power? Us — with help from the worldwide web.
Customers have a plethora of options to choose from at their fingertips plus the resources necessary to educate themselves
and make purchases on their own.