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8-1
1
Chapter 3: Creating the Product
 Value proposition
– why a person should buy the product (benefits she will
receive) compared to competitors’ products
 Product:
–Tangible good or intangible service that
satisfies customer needs
• We can see, touch, smell, hear, taste, or
possess tangible goods
– Intangible products
• services, ideas, people, places
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
8-2
Figure 8.2 Layers of the Product
8-3
8-3
The Core Product= Benefits
 Consists of all the benefits the product
will provide for consumers or business
customers
 Marketing is about supplying benefits,
not products.
8-4
The Actual Product
 Consists of the physical good or delivered
service that supplies the desired benefit
 Example:
–A washing machine’s core product is
the ability to get clothes clean, but the
actual product is a large, square, metal
Actual product also includes appearance,
styling, packaging, and the brand
8-5
8-5
The Augmented Product
 Consists of the actual product plus
other supporting features such as
warranty, credit, delivery, installation,
and repair service after the sale
–  A key way to differentiate many products
–  Consistent with long-term customer
relationships
8-6
Classifying Consumer Products
Durable vs. Nondurable
 Durable
–Benefits accrue
to consumer over
period of months,
years, decades
–High involvement
–Understand
augmented
product issues
 Nondurable
–The good is
consumed in the
short-run
–Low involvement
–Focus on
brand/price/
distribution
–Decision made
based on past
experience
8-7
Classifying Goods:
 Shopping product: purchased with
considerable time and effort
considering price, attributes, quality
 Tend to compare alternatives
7
8-8
8
Classifying Goods:
 Specialty products: have unique
characteristics important to buyers at
any price
 Consumers may be highly brand loyal
 Consumers may not be willing to
accept substitutes
– Rolex watch
8-9
9
The Process of Innovation:
Creating New Products
 Customer perspective: Innovation is
anything that customers perceive as
new and different
8-10
Developing New Products
 New-product development:
continuous process of looking for new
products or existing product better
 Successfully introducing new products is
becoming more difficult
– R&D costs are enormous
– Products become obsolete faster
– fees are high

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Creating the Product.pdf.pdf

  • 1. 8-1 1 Chapter 3: Creating the Product  Value proposition – why a person should buy the product (benefits she will receive) compared to competitors’ products  Product: –Tangible good or intangible service that satisfies customer needs • We can see, touch, smell, hear, taste, or possess tangible goods – Intangible products • services, ideas, people, places
  • 2. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-2 Figure 8.2 Layers of the Product
  • 3. 8-3 8-3 The Core Product= Benefits  Consists of all the benefits the product will provide for consumers or business customers  Marketing is about supplying benefits, not products.
  • 4. 8-4 The Actual Product  Consists of the physical good or delivered service that supplies the desired benefit  Example: –A washing machine’s core product is the ability to get clothes clean, but the actual product is a large, square, metal Actual product also includes appearance, styling, packaging, and the brand
  • 5. 8-5 8-5 The Augmented Product  Consists of the actual product plus other supporting features such as warranty, credit, delivery, installation, and repair service after the sale –  A key way to differentiate many products –  Consistent with long-term customer relationships
  • 6. 8-6 Classifying Consumer Products Durable vs. Nondurable  Durable –Benefits accrue to consumer over period of months, years, decades –High involvement –Understand augmented product issues  Nondurable –The good is consumed in the short-run –Low involvement –Focus on brand/price/ distribution –Decision made based on past experience
  • 7. 8-7 Classifying Goods:  Shopping product: purchased with considerable time and effort considering price, attributes, quality  Tend to compare alternatives 7
  • 8. 8-8 8 Classifying Goods:  Specialty products: have unique characteristics important to buyers at any price  Consumers may be highly brand loyal  Consumers may not be willing to accept substitutes – Rolex watch
  • 9. 8-9 9 The Process of Innovation: Creating New Products  Customer perspective: Innovation is anything that customers perceive as new and different
  • 10. 8-10 Developing New Products  New-product development: continuous process of looking for new products or existing product better  Successfully introducing new products is becoming more difficult – R&D costs are enormous – Products become obsolete faster – fees are high