Product

PRODUCT:A good, service, person, place,

event or organization offered to consumers to satisfy his

need or want.

Think of products that have changed our lives in a big way

GOOD

A good is a tangible product, which can be seen and touch. These tangible items can be produced in bulk and inventoried.

For Example, Switches from Bajaj Electricals are goods.

SERVICE

A service is an intangible product, which requires simultaneous consumption and production. These are also perishable in nature.

For example, A Wockhard hospital offers heart surgery, which consumers can not see but need to undergo when there is a problem in the heart. Hence surgery a service.

PERSON

A product may be person also. Here marketer tries to buy and sell the celebrities or sports persons of a league or club etc…

For, example, Board of cricket control in India (BCCI) asks its Indian premier league (IPL) teams to buy Iconic players and foreign players for certain price.

EVENT

An event is also considered as product. Many event management companies earn their revenue by selling tickets and advertisement space at the event.

The following example explains how an eventcan be marketed.

ORGANIZATION

An organization is also considered as a product. It can be bought and sold on the basis of value of the firm.

Example Tata’s bought Tetley for £271mn on 27 th February 2000

PLACE Many state governments and central

governments sell their places to get the pie in the tourism market. Here governments provides advertisements of a place to attract tourists from India and abroad.

For example, Karnataka government under ‘one state many world’ campaign highlightedhistorical places, wildlife, waterfalls etc...

In the following advertisement it provides the inputs on Hampi to tourists, a historical place in Karnataka.

THE OFFERING

LEVELS OF PRODUCT

1. Core product: This is the fundamental goods or service offered to the consumer. E.g. Hospital services

2. Generic product: This is the basic version of the product. E.g. Hospital having doctors, nurses, beds and laboratories.

3. Expected product: The minimum attributes consumer expects in the product. E.g. Hospital should have qualified doctors, good service and proper amenities.

4. Augmented product: Inclusion of value added services to the expected product to distinguish itfrom competitors. E.g. Online or tele medicine facilities, expert knowledge sharing, 24 hourambulance service etc...

5. Potential product: these are future products provided by the company which customer didn’tanticipate. Ultimately consumer will be delighted by this product. E.g. Medical insurance from the hospital, after service care etc…

Another example ?

Imagine yourself as a Product managerWhat steps in product augmentation should be undertaken for competitive advantage.

PRODUCT CLASSIFICATIONS

Durability and Tangibility Classification:

Nondurable goods Durable goods Services

PRODUCT CLASSIFICATIONS

Products are classified on basis of use into two broad categories. They are consumer products and business products.

1. Consumer products are purchased by the consumer for his personal consumption.

2. Business products: These products are purchased by business concern for further product development

CLASSIFICATION OF PRODUCTS

CONSUMER PRODUCTS

As these products are purchased by the final consumer for his own consumption, the market is very big. Hence consumer products are classified into four different categories.

They are -a. Convenience goods.b. Shopping goodsc. Specialty goodsd. Unsought goods.

CONVENIENCE GOODS:The fast moving consumer goods, which

are purchased regularly with less amount of effort.

1. These are purchased frequently.2. Customer involvement is very low.3. Price of the product is very low.4. Intensive distribution is used to reach the

consumer.5. The stock turnover is high.6. Aggressive promotion is required

Example: soaps and detergents.

SHOPPING GOODS:High consumer involvement products in which consumer process the information of product suitability, quality and price.Comparing with convenience goods, shopping goods are purchased less frequently. Consumer takeslot of time to search and evaluate the information. These products are available in selected outlets.The price of the product is very high.

For example, a consumer want to purchase washing machine will collect the information on type of washing machine, type of control, loading, wash method, pre wash, delicate wash, cycle time, after sales service, sensors and water consumption.

SPECIALTY GOODS:A tangible product for which a consumer posses high brand loyalty and readyto wait, or spend time.

i. Consumers are having strong brand loyalty.ii. Usually companies adopt premium pricing

strategy.iii. Exclusive distribution and selective

communication strategies are adopted.

To illustrate, a consumer is willing to pay Rs 32000 for Bose Digital home theater thoughcompetitors’ products are available at Rs 15,000 to Rs 25000.

UNSOUGHT GOODS:These products are called unsought

because consumer usually unaware or ignorant to purchase. Marketers need heavy promotion activities to educate and sell their products.

Insurance is the product which most of the consumer are aware but very few are willing to purchase.

Life Insurance Corporation trains its agents to promote and sell aggressively. These agents provide lot of inputs regarding insurance to consumers.

BUSINESS PRODUCTSBusiness products are purchased by the

business consumer who uses this product as a material, part, capital item or service in producing his/her final product.

For example, CET offers range of services to Birla copper, Jindal Vijayanagar steel and Mukund limited. These services are used todevelop the final products of these companies.

Centre for Engineering & Technology

Center for Engineering & Technology (CET), an ISO: 9001 certified organization is the design,engineering & consultancy unit of SAIL. It has its Head Office at Ranchi, Sub Centers at Bhilai,Durgapur, Rourkela, Bokaro, Burnpur & Bhadravati, Unit Offices at Bangalore, and New Delhi for formulation of Interplant Standards for Steel Industry. As a solution provider for all project needs, CET had been rendering complete range of services not only to the Steel Plants under SAIL but also to various clients other than SAIL – both within and outside the country. Some of the important clients other than SAIL include EGITALEC (Egypt), Ashok Steel (Nepal), Chittagong Steel Mills(Bangladesh), Birla Copper, Mukand Ltd., Jindal Vijayanagar Steels Ltd., National Iron & Steel Co.,Hindustan Zinc Ltd., National Mineral Development Corporation and Romelt SAIL(India) Ltd.,CET is also the nodal agency for acquisition and lateral transfer of technologies within SAIL plants.

The range of services includes conceptualization, project evaluation & appraisal, project consultancy, design & engineering and project management in the areas of iron and steel making.Apart from this, CET has been providing its services in the related areas like mine planning and development, infrastructure development, industrial piping, industrial warehousing, material handling system, industrial pollution control and environment management systems.

PRODUCT HIERARCHYThe different stages in the product and their

attributes are listed below

1. Need family : The core need that underlies the product family. Eg. security

2. Product family : All the product classes that can satisfy a core need with reasonable effectiveness. Eg. savings and income

3. Product class : A group of products within the product family recognized as having a certain functional coherence Eg. Financial instruments

PRODUCT HIERARCHY4.Product line : A group of products within a

product class that are closely related because they function in a similar manner or are sold to the same customer groups or are marketed through the same types of outlets or fall within given price ranges. Eg. Life insurance

5. Product type : Those items within a product line that share one of several possible forms of the products. Eg. Term Life insurance

PRODUCT HIERARCHY6. Brand : The name associated with one

or more items in the product line that isused to identify the source or character of the item Eg. ICICI

7. Item : A distinct unit within a brand or product line that is distinguishable bysize, price, appearance, or some other attribute. Eg. ICICI Pru life

(Adopted from Kotler Philip, Marketing Management)

In planning its market offering the marketer needs to think through the levels of the product