Marketing & Risk Mgmt I
Marketing & Risk Mgmt I ABM 135
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This 4 page Study Guide was uploaded by Don Langworth DVM on Thursday October 15, 2015. The Study Guide belongs to ABM 135 at Morgan Community College taught by Staff in Fall. Since its upload, it has received 38 views. For similar materials see /class/223569/abm-135-morgan-community-college in General at Morgan Community College.
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Date Created: 10/15/15
Products and Services Study Guide What is a product A good de nition of a product is anything that can be offered to a market for attention acquisition use or consumption and that might satisfy a want or a need Products include more than just goods A product may include one or a combination of the following people places organizations ideas or services A product can be tangible which means it results in the ownership of something or it may be intangible in that only a service was provided What is a service Services are intangible in that they don t result in the ownership of anything A service is a product but a product cannot be a service Services consist of activities that include the following or a combination of the following activities or benefits that are offered for sale Services cannot be seen tasted felt or heard before they are bought What are the three levels of products and services When determining the uniqueness of your product or service you need to look at it on three levels The first level is straight forward What is your core product In other words what are the buyers really buying and what am I really selling It stands at the center of the total product For example a buyer of a home security device buys the device That is the core product but is that person really buying a home security device or home security When you are looking at a marketing strategy you must first look at the core benefits a product or service will provide the consumer Are there features about your core product that make it unique The second level is the actual product You must build the actual product around a core product You can t have an actual product without having a core product Your actual product can have as many as five characteristics These five characteristics are quality features design a brand name and packaging Often the actual product will play a larger role in the buying decision of the consumer than the core product Quality is known as freedom from defects It is why some people will pay more to have Eddie Bauer clothing as opposed to other well known clothing retailers who sell their products at a lower price People will pay more for perceived quality Features are known as the bells and whistles of a product A new car purchase is a good example You buy the car but you get to select options or features that come with the car Some people want a core product with lots of features and some people want only the core product The design of a product can in uence peoples buying decisions A product that is designed for women may have subtle differences than one that is designed for men A product may have apparent differences such as a vehicle that is a sports car compared to a vehicle that is a family car The brand name may be what people buy as opposed to the core product A good example of this would be cigarettes People buy a brand because it elicits a certain stigma even though the price of the brand is more than a lesser brand Packaging can have an effect on how the consumer perceives the product Generic packaging of cereal is a good example Kids want their parents to purchase cereal that is in the most colorful box Not something in a black and white box The third level is the augmented product This level must be built around your core and actual product It would consist of providing additional services and bene ts to the consumer This level is as important as the first two levels A failure at this level has been known to cost sales of a core product A good example of this is known as service after the sale What are the two main classi cations of products When you develop a marketing strategy for your products andor services it may be beneficial to classify your products into consumer products or industrial products This classification will help you develop a marketing strategy that is based on how consumers make a buying decision Consumer products are bought by the final consumer This is sometimes known as the enduser Marketers break consumer products down further into four classes This is based on the buying decision that a consumer will make when purchasing a product The four classes are convenience shopping specialty and unsought The class that your product falls into may dictate how you market your product Convenience products are generally bought with little planning and low shopping effort They are low priced and have widespread distribution The type of marketing that is used to sell these items is usually mass advertising and sales promotions by the producer An example of convenience products would be bread cereal and magazines Shopping products are bought less frequently and involve more planning and comparison They are higher in price than convenience products and have distribution in fewer outlets Shopping product marketers generally distribute their products through fewer outlets but provide deeper sales support to reseller and customer Advertising is generally done by the producer and resellers Examples of shopping products are appliances furniture and clothing Specialty products are items that are bought with strong brand preference and low price sensitivity These products are purchased because of the brand and not because of the core product They are generally high priced and distribution is not widespread Promotion of these products is carefully targeted to an audience by the producer and reseller Buyers of these products usually spend more time trying to find the specific product than comparing the cost of the product Luxury cars and fur coats would be classified as specialty products Unsought products are products or services that there is little awareness or interest in Sometimes the interest may be negative and the marketer is trying to improve the image Also a product that has been recently invented would fall into this classification The price of these items is widespread and the advertising is generally widespread and aggressive Examples of unsought products are life insurance retirement plans and vacation packages Industrial products are purchased for further processing or for use in conducting a business The purpose for which a product was purchased can determine whether it is a consumer product or an industrial product An example of this would be a computer If the computer where purchased by a business to keep records it is an industrial product If on the other hand it where purchased to by a family for intemet purposes it would be a consumer product There are three major groups of industrial products materials and parts capital items and supplies and services Materials and parts are used to create another product Materials are raw products such as wheat or corn that will be processed to create another product Parts are not processed further but are used in the manufacturing process These are generally sold directly to the industrial user Price and service are major marketing factors and brand and advertising are less important when it comes to marketing this group Capital items are used by industry and aid in the production process These products range from buildings and equipment to tools Price and service are the major importance when it comes to marketing these items and most advertising is done directly to the buyer Supplies and services are the items that make up the last group of industrial products The supplies include paper pencils and ink They are generally bought with minimum effort and little comparison on price Marketing these items would be similar to convenience items that are consumer products Services are maintenance and repair and business advisory services These items are often bought direct by the business and often sought out through the telephone book When looking at the products andor services you provide be aware that there is more than the core product that you are selling Look at the three levels of your product The core level is the product the second level is the actual product and the third level is the augmented product Is there a level that is really the focal point of what you are selling Is there a level that could be improved The opposite could be true of why people choose not to buy your product over someone else s product It may be that you need to improve on one of these levels or market more than just the core product This can play an important role in how you market your product Another important consideration is how you classify your product Is it a consumer product or and industrial product Maybe it is both or you can market it in both classifications If it is a consumer product does it fit the description of a convenience product shopping product specialty product or an unsought product The classification that you put your product into can dictate how you market your product On the other hand your product may be classified as an industrial product The marketing of industrial products differs from that of consumer products Most marketing of industrial products is direct to the buyer References Armstrong G and Kotler P 1997 Marketing An Introduction Prentice Hall
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