The document discusses different aspects of products, including: 1) The core, actual, and augmented product - with the core being the benefits, actual being the tangible good/service, and augmented including additional features like warranty. 2) Classifying products as durable vs nondurable and shopping vs specialty products. 3) The process of innovation and developing new products, which involves understanding customer perspectives and continuously looking to improve existing products or develop new ones, though this is becoming more difficult due to high costs.

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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
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Figure 8.2 Layers of the Product

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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.

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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

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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

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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

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Classifying Goods:
 Shopping product: purchased with
considerable time and effort
considering price, attributes, quality
 Tend to compare alternatives
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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

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The Process of Innovation:
Creating New Products
 Customer perspective: Innovation is
anything that customers perceive as
new and different

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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