Core Concepts of Marketing by John Burnett - HTML preview

CHAPTER 7

INTRODUCING AND,MANAGING THE PRODUCT

to another hair salon. It is generally desirable for a marketer to lift her product from the

shopping to the specialty class (and keep it there) , With the exception of price-cutting, the

entire range of marketing activities are required

accomplish this goal.

Classification of Industrial Goods

Consumer goods are characterized as products that are aimed at and purchased by the ulti-

mate cons umer.2 Although consumer prod'lcts are more familiar to most readers, industrial

goods represent a very important product category, and in

case of some manufacturers,

they are the only product sold. The meibods of industrial

are somewhat more

specialized, but in general the concepts presented in this

are valid for the industrial

marketer as well as for the consumer goods marketer.

Industrial products can either be categorized from the perspective of the producer and

how they shop for the product, or the per:;pective of the manufacturer and how they are

produced and how much they cost. The latter criteria offers a more insightful classification

for industrial products.

Fanns, forests, mines, and quarries provide extractive products to producers. Although

there are some farm products that are ready fo r consumption when they leave the farm, most

farm and other extractive products require some processing before ourchase by the con-

sumer. A useful way to divide extractive products is into farm products and natural products, since they are marketed in slightly different ways.

Manufactured products are those that have undergone some processing. The demands

for manufactured industrial goods are usually derived from the

for ultimate con-

sumer goods. There are a number of specific types of manufactured industrial

Semi-manufactured goods are raw material s that have received some

but

require some more before they are useful to the purchaser. Lumber and crude oil are exam-

ples of these types of products. Since these products tend to be standardized , there is a strong emphasis on price and vendor reliability.

Parts are manufactured ite ms that are ready to be incorporated into other products,

For instance, the motors that go into lawn mowers and steering wheels on new cars are care-

fu lly assembled when they arrive at the manufacturing plant. Since

such as these

are usually ordered well in advance and in large quantities, price and service are

most important marketing considerations.

Process machinery (sometimes called "installations") refers to major

of equip-

ment used in the manufacture of other goods. This category would include

plant

(boilers, lathes, blast furnaces , elevators, and conveyor systems), The marketing process

would incorporate the efforts of a professional sales forc e, supported by engineers and tech-

nicians, and a tremendous amount of personalized service.

Equipment is made up of portable factory equipment (e.g., fork ;ift trucks, fire extin-

guisher) and office equipment (e.g ., computers, copier machines). Although these products

do not contribute directly to the physical product, they do aid in

production process .

These products may be sold directly from the manufacturer to the user, or a middleman

can be used in geographically dispersed markets. The marketing strategy employs a wide

range of activities, including product quality and featu res, price,

vendor deals, and

promotion,

Supplies and service do not enter the finished product at all,

are nevertheiess

sumed in conjunction with

the product. Supplies would include paper, pencils, fuel

oil, brooms, soap, and so forth. These products are normally purchased as convenience prod-

ucts with a mi nimum of effort and evaluation. Business services include maintenance (e,g.,

offi ce cleaning), repairs (e.g. plumbing), and advisory (e.g. legal). Because the need for services tends to be unpredictable, they are often contracted fo r a relatively long period of time,

CLASSIFICATION OF PRODUCTS

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Goods Versus Services

that there are substantial differences between goods products and service prod-

ucts has been the source of great debate in marketing. Opponents of the division propose

that "products are jJroducts," and just because there are some characteristics associated with service products and not goods products and vice-versa, does not mean customized strategies are generally necessary for each. Advocates provide evidence that these differen ces

are significant. It is the position in this book that service products are different than goods

products, and that service products represent an immense market sector.

Service products are reflected by a wide variety of industries: utilities, barbers, travel

agencies, health spas, consulting firms, medical care and banking, to name but a few, and

they account for nearly 50% of tne average consumer's total expenditures, 70% of the jobs,

and two-thirds of the G.N.P. Clearly, the service sector is large and is growing. While all

products share certain common facets, service products tend to differ from goods products

in a number of ways

Characteristics of Service Products

Like goods products, service products are quite heterogeneous. Nevertheless, there are sev-

eral characteristics that are generalized to service products.

Intangible

As noted by Berry, "a good is an object, a device, a thing; a service is

a deed, a performance, an effort." With the purchase of a good you have somethi ng that

can be seen, touched, tasted, worn or displayed; this is not true with a service. Although

you pay your money and consume the service, there is nothing tangible to show for it. For

example, if you attend a professional football game, you spend $19.50 for a ticket and spend

nearly three hours taking in the entertainment.

A D 7.1

Shoes are a traditional goods product.

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