Core Concepts of Marketing by John Burnett - HTML preview

CHAPTER 7

INTRODUCING AND MANAGING THE PRODUCT

more sporty designs, and more environmentally friendly engines-including a "hybrid"

car that can get 66 miles per gallon on a combination of gasoline and electricity. "Every

maker is preparing new launches to keep sales from falling through the floor," says

Christopher Redl, automotive analyst at ING Barrings Ltd.

But Japanese consumers are al ready overwhelmed

choices. "There are now

over 190 car models available in the market," says Atsushi

member of the board of

directors in charge of domestic sales at Nissan Motor Co.

the

consumer

can only remember about 11 of them."

Yet at the Motor Show, Japanese carmakers will be coming out with even more.

Toyota wants to target young people with fun European-looking models and convertible

sports car. Toyota also plans to roll out the world ' s fi rst mass-produced hybrid, with sales

projected at 1,000 a month. The company admits it will see the hybrid as one-third of the

world's auto market by 2005. After working out the kinks in the hybrid in Japan,

plans to take it for a spin in overseas markets. However,

worry the hybrid could

cannibalize sales of other models. "Why would you want to buy a Corona when you

might be able to buy a hybrid car for just about the same price?" asks Edward Brogan,

automotive analyst at

Brothers Inc.

In this chapter we will look at

special cha1 1enges that the marketing of products

possess. Moreover, we will delineate the unique characteristics associated with products

as they pass through the various stages of

lives. Particular attention will be given to

the kinds of decisions that are necessary through this process.

SOURCES: Jean Halliday, "Carmakers Le arn to Mine Databases:' Advertising

Apr il 17,2000, p. S6; Emily Thorton, "Too

Many Cars, Too Few Buyer," Business Week , October 20,1997, p. 56; Alison S. Wellne , "Hot Wheels:' Americal1 Demographics, August 2000, pp.

Davi d Kil ey, " Not Your Father's

V,"

Demog raphics, January 1999, pp.

INTRODUCTION

This chapter begins our discussion of the functional areas of marketing. Why do we begin

our discussion with product

than with promotion, distribution, or pricing? The answer

is quite obvious. None of those other functions serve any useful purpose

a

pany product that provides consumer satisfaction. Without a product, there is nothing to

promote, nothing to distribute, nothing to price, This does not suggest

product is more

important, rather, it is the impetus for the other marketing functions. Logically, we

start at the beginning, and the beginning of a market place is a set of correct decisions about

the product offerings of the finn.

DEFINING THE PRODUCT

In essence, the tenn "product" refers to anything offered by a finn to provide customer isfaction, be it tangible or intangible . It can be a single product, a combination of products, a product-service combination, or several related products and services. It nonnally has at

least a generic name (e.g. banana) and usually a brand name (e.g. Chiquita). Although a

product is normally defined from the perspective of the manufacturer, it is also important

to note two other points-of-view-those of the consumer and other relevant pub'.ics.

DEFINING THE PRODUCT

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For a manufacturer like Kraft Foods, their macaroni-and-cheese dinner reflects a food

product containing

ingredients, packaged,

priced and promoted in a

manner, and requiring a certain return on their investment. For the consumer, the product

is a somewhat nutritious food item that

quick and easy to prepare

is readily con-

sumed by the family, especially the kids. For a particular public, such as the Food and Drug

Administration, this product reflects a set of ingredients that must meet particular mini-

mum standards, in terms of food quality, storage and distribution.

Making this distinction is important in that all three perspectives must be under-

stood and satisfied if any product will survive and succeed. Furthermore, this sensitivity

to the needs of all three is the marketing concept in action. For example, a company might

design a weight-reduction pill that not only is extremely profitable but also has a wide

acceptance by the consumer. Unfortunately, it cannot meet

medical standards estab-

lished by the Federal government. Likewise, Bird's Eye Food might improve the overall

quality of their frozen vegetables and yet not improve the consumers' tendency to buy

that particular brand simply because these improvements were not perceived as either

important or noticeable by the consumer. Therefore, an appraisal of a company's prod-

uct is always contingent upon the needs and wants of the marketer, the consumer, and

the relevant publics. We define product as follows: Anything, either tangible or intangi-

ble, offered by the firm; as a solution to the needs and wants of the consumer; is prof-

itable or potentially profitable; and meets the requirements of the various publics governing

or influencing society.

There are four levels of a product: core, tangible, augmented, and promised (see Fig-

ure 7.1). We begin with the notion of the core product, which identifies what the consumers feel they are getting when they purchase the product. The core benefits derived when an overweight 45-year old male purchases a $250 ten-speed bicycle is not transportation; it is

the hope for better health and improved conditioning. In a similar vein, that same individ-

ual may install a $16,000 swimming pool in his backyard, not

order to obtain exercise,

but to reflect the status he so desperately requires. Both are legitimate product cores. Because the core product is so individualized, and oftentimes vague, a full-time task of the marketer

is to accurately identify the core product for a particular target market.

Once the core product has been indicated, the tangible product becomes important.

This tangibility is reflected primarily in its quality level, features, brand name, styling, and packaging. Literally every product contains these components to a greater or lesser degree.

Unless the product is one-of-a-kind (e.g., oil painting), the consumer will use at least some

of these tangible characteristics to evaluate alternatives and make choices. In addition, the

importance of each will vary across products, situations, and individuals. For example, for

Mr. Smith at age 25, the selection of a particular brand of new automobile (core product =

transportation) was based on tangible elements such as styling and brand name (choice =

Corvette); at age 45, the core product remains the same, while the tangible components such

as quality level and features become important (choice = Mercedes).

At the next level lies the augmented product. Every product is backed up by a host

of supporting services. Often, the buyer expects these services and would reject the core-

tangible product if they were not available. Examples would be restrooms and escala-

tors/elevators in the case of a department store, and warranties and return policies in the

case of a lawn mower. Dow Chemical has earned a reputation as a company that will bend

over backwards in order to service an account. It means that a Dow sales representative

will visit a troubled farmer after-hours in order to solve a serious problem. This extra serv-

ice is an integral part of the augmented product and a key to their success.

a world with

many strong competitors and few unique products, the role of the augmented product is

clearly increasing.

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