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Product (Services - What are they?
How are they different to physical…
Product
Services - What are they?
- How are they different to physical products
Services are dominated by the intangible elements of the total product
Services are heterogeneous products
- How similar
Both goods and services come with tangible and intangible products
Both require careful consideration about delivery process
Characteristics
- intangibility
difficult for customer to evaluate
customer doesn't have physical possession
hard to advertise and display
hard to set and justify prices
usually not protectable by patents
- inseparability
service provider cannot mass produce services
customer must participate in production
other consumers affect service outcomes
services are difficult to distribute
- perishability
services cant be stored
balancing supply and demand is very difficult
unused capacity is lost forever
demand may be very time-sensitive
- heterogeneity
service quality is difficult to control
service delivery is difficult to standardise
- client-based relationship
success depends on satisfying and keeping customers over the long term - generating repeat business is challenging
relationship marketing becomes critical
- customer contact
service providers are critical to delivery
requires high levels of service employee training and motivation
changes a high contact service into a low-contact service to achieve lower costs without reducing customer satisfaction
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Classifications of products
- consumer products
Classifications of products
- business products
Developing new products
- What are they and what a different meanings
1) Idea generation
seeking product ideas to achieve objectives
- internal sources: marketing managers, R&D department, employees
- external sources: customers, competitors, consultants
2) Screening
choosing the most promising ideas for further review
- real need need in the market?
- match the organisation's objectives and resources?
- cannibalise the sales of current products?
- possible environmental changes?
3) Concept testing
seeking potential buyers' responses to a product idea
a detailed version of the new product idea stated in meaningful consumer term
- word description of the potential new product
- picture of the potential new product
- questionnaires asking for product improvement ideas, potential purchase, etc
4) Business Analysis
- evaluating the potential contribution of a product idea to the company's sales, costs and profits
- assess the financial viability of an investment in the new product
5) Product development
- determining if producing a product is technically feasible and cost effective
- developing and testing a prototype
- performance, safety, convenience, durability, etc.
6) Test marketing
- introducing a product on a limited basis to measure the extent to which potential customers will actually buy it
7) Commercialisation
- deciding on full-scale manufacturing and marketing plans and preparing budgets
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what is a good?
- a tangible physical entity (or thing)
what is a service?
- a mostly intangible result of the application of human and mechanical efforts to people or objects
What is an idea?
- a concept, philosophy, image or issue