Product (Services - What are they?
How are they different to physical…
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
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
service provider cannot mass produce services
customer must participate in production
other consumers affect service outcomes
services are difficult to distribute
services cant be stored
balancing supply and demand is very difficult
unused capacity is lost forever
demand may be very time-sensitive
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
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
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
- deciding on full-scale manufacturing and marketing plans and preparing budgets
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