9.1 Products, Services, and Experiences

Products, services, and experiences form the core of what companies offer to consumers. From tangible goods to intangible offerings and memorable events, these elements satisfy customer needs and wants in various ways.

Understanding the categories of consumer and business products helps marketers tailor their strategies. By considering the four levels of product strategy, companies can create offerings that not only meet basic needs but also differentiate themselves in the market, delivering unique value to customers.

Products, Services, and Experiences

Products, services, and experiences

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• Products represent tangible goods that can be physically touched, held, and owned by consumers (cars, clothing, electronics, food items)
• Services are intangible offerings that provide benefits or satisfaction to customers but cannot be physically possessed (haircuts, legal advice, car repairs, education)
• Experiences are memorable events or interactions that engage customers emotionally and often involve a combination of products and services (theme park visits, luxury resort stays, music concerts, guided tours)

Categories of consumer products

• Consumer products
  • Convenience products are frequently purchased items that require minimal effort and comparison from consumers (snacks, toiletries, newspapers)
  • Shopping products are items purchased less frequently, involving more time and effort from consumers to compare and select (clothing, furniture, appliances)
  • Specialty products have unique characteristics or strong brand identification, requiring special effort from consumers to purchase (luxury cars, designer clothing, high-end electronics)
  • Unsought products are items not actively sought by consumers until a specific need arises (life insurance, funeral services, fire extinguishers)
• Business products
  • Raw materials are basic ingredients or components used in the production process (lumber, crude oil, minerals, agricultural products)
  • Major equipment includes high-cost, long-lasting items used in production or operations (machinery, heavy-duty vehicles, buildings)
  • Accessory equipment consists of less expensive, shorter-lived items that support business operations (hand tools, office supplies, computers)
  • Processed materials are components or ingredients that have undergone some processing before being used in production (plastic resins, steel, flour, fabric)
  • Supplies are frequently consumed items that support business operations (paper, pens, cleaning products, light bulbs)
  • Business services are intangible offerings that support business operations (consulting, legal services, software, advertising)

Four levels of product strategy

1. Core benefit: The fundamental need or want that the product satisfies and the essential reason why a customer purchases the product (a car's core benefit is transportation)
2. Basic product: The tangible or intangible item that delivers the core benefit, including the product's essential features and characteristics (a car's basic product includes the engine, wheels, and chassis)
3. Expected product: The set of attributes or conditions buyers normally expect when purchasing the product, including features considered standard for the product category (a car's expected product includes safety features, comfortable seats, and a warranty)
4. Augmented product: Additional features, benefits, or services that distinguish the product from competitors, adding value beyond the expected product and creating a competitive advantage (a car's augmented product may include a premium sound system, navigation, or roadside assistance)

• Product differentiation strategies can be employed at this level to create unique value propositions and stand out in the market Understanding the four levels helps marketers design and position products effectively by focusing on the core benefit, meeting customer expectations with the basic and expected product levels, and differentiating the product through augmentation to create a competitive edge and deliver customer value

Product Strategy and Brand Management

• Product lifecycle: The stages a product goes through from introduction to decline, influencing marketing strategies and decisions
• Brand equity: The value and power a brand holds in the marketplace, based on consumer perception and experiences
• Product mix: The complete set of all products offered by a company, including product lines and individual items