Marketing Management

MGT 2306Lesson 5

Lesson 5 Objectives

• Define and describe a product and its 3 levels

• Explore, question and be able to explain the various categories of products

• Meet up to the challenges of 21st century marketing by using innovation and creativity

What is a product?

• …anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.

• It includes physical objects, services, persons, places, organisations and ideas

Consumer Product : 3 Levels• Generally a product or service can be

broken into 3 levels

Consumer Product : 3 Levels• Level 1: Core Product. (produk teras)

What is the core benefit your product offers?

• This is what the customer is actually buying. Its the problem solved or benefits the customer gets when they buy the actual product or service.

Example

The Sony Handycam ‘Memories’ – 60sec Video

Core Product Revelation

• When a customer buys a CAMERA, he is actually buying MEMORIES

• When people buy CARS, they are buying transport CONVENIENCE

• When a couple buys a trip overseas, they are buying EXPERIENCES.

• When a girl buys perfume, she is actually buying herself CONFIDENCE when she walks near someone.

Consumer Product : 3 Levels

• Level 2: Actual Product: (Produk sebenar)

The aim is to ensure that your potential customers purchase from you. The strategy at this level involves organisations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors.

• These are generally the product or service purchased by the consumer.

Let’s watch this commercial

Consumer Product : 3 Levels• Level 3: Augmented Product: (produk

tambahan)

What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on.

• These are customer valued extras which are designed to add value to the customer. Examples of augmented products include warranties, customer services, delivery, installation etc.

What are you buying here?

Consumer Goods classification

Consumer goods are products which are purchased for personal use. Classified into:

• Convenience goods (barangan kemudahan seharian)

• Shopping goods (barangan membeli-belah)• Specialty goods (barangan khusus)• Unsought goods (barangan yang tidak

dituntut)

Convenience goods

• frequently purchased• minimal comparison of

alternatives• minimal buying effort

(time and search)• low involvement • three types of

convenience products

Types of convenience products

• Staples (barangan harian)– buy on a regular basis

• i.e. soap, tomato sauce

• Impulse (barangan dorongan)– unplanned purchases

• i.e. lollies, magazines

• emergency products (kecemasan)– urgent need

• i.e. umbrella, aspirin

Shopping goods

• consumer compares brands on attributes and price (sifat & harga)

• moderate buying effort (time and search)

• medium to high involvement

• two types of shopping products

Types of shopping products

• uniform– undifferentiated or standardised– customers perceive little difference

between brands– price is the main determinant

• non-uniform– differentiated or customised– customers compare brands– product features are the main

determinant

Example of uniformed shopping goods

Example of non-uniformed shopping goods

• fridges, computers or washing machines.

Specialty products

• consumer goods with unique characteristics or brand identification

• high buying effort– time and search to find a

supplier

Example of Speciality Goods

• jewelry, watches and cars.

Unsought products

• Products the consumer is not aware of, or does not normally think of buying– life insurance,

encyclopaedias, donations

Examples of unsought goods

• cemetery plots, encyclopaedias and life insurance

The 21st Century Marketing

• Even convenience products adopt exclusive marketing techniques because of increasing competition

• Themes which are used to market no longer focus on the core needs of the consumer

• More often than not, INFLUENCE of people-to-people are used rather than focusing on the CORE, ACTUAL and AUGMENTED elements

What is being marketed here?

What about this?

Very lengthy marketing