Think about the last time you received a gift that wasn’t quite what you wanted

Question

Think about the last time you received a gift that wasn’t quite what you wanted (for example, a computer scanner for your 40th birthday when what you really wanted was a spa day!). In some ways, a poorly-selected gift carries an unspoken message – “I don’t know enough about you to choose a gift you’ll enjoy.”

Marketers can make the same kind of mistake. By misunderstanding the multi-layered attributes conveyed by a product or service, or failing to match those attributes to the needs and expectations of the target market, major marketing mistakes can be made. Perhaps the most famous example is New Coke, launched in April 1985 to compete more effectively against Pepsi, which always scored better than Coke in consumer taste tests and was making serious inroads into Coke’s market share. But New Coke marketers didn’t consider the emotional connection between loyal Coke drinkers and their beverage of choice. By failing to ask the most important question – “do you want a different flavor of Coke?” – New Coke’s marketers ran head-on into consumer resistance, and less than three months later “Coca-Cola Classic” returned to the marketplace.

This lesson will help you learn new ways to think about product and service attributes, and how best to match those attributes to the desires of the consumer, both spoken and unspoken.

There are a number of ways to think about the product portion of the marketing equation. It is the first of the 4P’s usually mentioned (Product, Price, Place, and Promotion) and while what a product is may seem evident, marketers think about products in a number of different ways. One way to think about it is how the consumer goes about shopping for that particular item – the amount of time and effort that a shopper is willing to expend for a given object.

While it might seem that you would find Convenience Products only in Convenience Stores, things are called Convenience Products because of the limited importance the consumer puts on the decision of which product to buy. If you are going to buy a single bottle of Diet Pepsi at a Mobil gas station, you likely aren’t going to comparison shop at the BP station across the street. If you have a headache, you don’t mind paying an outrageous per tablet price to get a couple of aspirin in a package. Convenience Products are products that you normally can find in a number of places, and they are products that consumers are not especially sensitive to their price.

Specialty Products are those items that carry the image (if not the reality) of being rare and exclusive. A Rolex watch is an example of such an item – you can only buy a Rolex in certain places, and the price itself keeps the product exclusive and sought after. At the opposite end of this spectrum are Unsought Products, which are things like cemetery plots and life insurance. People rarely go looking for either product.

So what is the point of classifying products in this fashion? One of the reasons is that you are able to figure out how to sell the product. You are not going to need door-to-door salespeople selling chewing gum, but if you are selling a high-end technical product that needs some introduction, guidance, and ongoing service, you won’t sell the product in a self-service retailer like Target. For Specialty Products, you also know a fair amount about the consumer you are selling to, and won’t likely see Rolex watches sold under Wal-Mart’s “Price Drop” sign.

You are familiar with symbols – a symbol is something that represents something larger or more complex than the symbol. A country’s flag, your high school’s mascot, and a necklace with a religious icon are symbols. When you see one, you know a bit (sometimes quite a bit) about a person’s beliefs. It is a bit of intellectual shorthand – it allows you to communicate a complex message in a simple and easily perceived way.

Likewise, a company’s brand is a symbol – it is a way of communicating complex images and thoughts in a very simple way. The symbol(s) for Coke tells you what the product is, of course, but it also calls to mind your own experiences with the product, and the countless images and scenarios you have seen played out in all of their advertisements. There are varieties of brands, but the really critical thing to remember is that a brand, if it is good, communicates a powerful image of the product. The Coke polar bears, seen at the holidays, have nothing to do with the product but help the customer have a good feeling associated with the brand.

There is another helpful way of looking at the ideas behind the marketing of products, and that is to think of products as experiences. First, there is the experience of buying and using the product – is it convenient, easy to use, are the directions hard to read? There is also an emotional component: If you buy a fire extinguisher for the kitchen, you feel prepared and that you are caring for your family; if you buy a new automobile battery you buy more than the starting power, but the peace of mind knowing that the car will perform reliably when you need it.

When marketers develop a new product, it’s important to consider all of these attributes – shopping type, branding, experience – because they will drive the subsequent decisions about place, price and promotion.

Marketing a Service

Gap Model Graphic

There is some debate as to whether a mostly service economy is a good idea, or whether a healthy economy needs to have a significant manufacturing component. Regardless, over half of the United States’ economy is in the service sector, and that percentage is likely to rise.

Although the idea of a service and a product sometimes overlap, it’s clear that services have some different attributes than products. The first is that services are largely intangible, and because they have no physical attributes, it is much harder for the customer to compare one service to another in making the purchase decision. In the same way, it is more difficult for the marketer to “sell” the features and benefits of a service. You can also see that services are frequently sold, produced, and used at the same time (although this distinction is less important than other distinctions). When you go to an accountant for advice, the buying, selling, and using of that advice pretty much all happens at the same time.

Services are mostly heterogeneous, that is, they largely differ for individual seller, and frequently, for buyer. If you had an illness, and your aunt went to the doctor with more or less the same ailment, it wouldn’t be wise to use her service experience to treat yourself (unless, of course, you are both hypochondriacs, in which case this might work out just fine). So, as with heterogonous shopping products, the experience is relatively different for each consumer and provider.

Services are also considered perishable. You can’t put your annual physical in a box for later use if you can’t make your doctor’s appointment next week. You can go to another concert next week, but you can’t save last week’s concert for later.

Thanks to many of these characteristics of a service – especially the intangibility, the heterogeneity, and the inseparability of the service from its provider – it can be quite difficult for both marketers and customers to accurately judge the quality of a service. However, there are five basic characteristics often used to gauge service quality:

Reliability – is the service the same, every time it is delivered?

Responsiveness – is the service available when you want it?

Assurance – can you trust the employee to be knowledgeable and courteous?

Empathy – does the employee understand you and your specific needs?

Tangibles – does any physical evidence connected with the service (surroundings, uniforms, etc.) inspire confidence?

To say that we occasionally run across service quality “gaps” is an understatement – frequently you do not get the service you wish for. There is an idea in marketing to put these gaps into a more understandable format, using the Gap Model of Service Quality. This model describes five distinct gaps:

GAP 1 – This is the difference between what customers actually want and what management thinks they want. This gap is the source of many marketing problems. The only thing worse than this gap is not mentioned, and that is when customer wants differ from what management provides because management is too bound up in what they think the customer should want, or that the customer should want what they are producing. When put in these terms it sounds kind of unlikely a company would find themselves in this position, but it is really amazing how often this happens.

GAP 2 – This is the gap between what the customer wants and how management decides to fill those wants. In other words, it is an issue of the management’s full understanding of how to meet those needs.

GAP 3 – This gap exists if management hears what customers want, and develops a service or product to meet those wants, but fails to deliver that service effectively. The customer’s needs have been addressed theoretically, but the organization is unable to actually provide the service they set out to provide.

GAP 4 – This gap describes the situation when the customer’s experience is different than the company’s description or communication of the service. This comes about from unmet customer expectations, either inappropriately assumed by the customer, or those expectations that the company has given the customer reason to believe.

GAP 5 – This is the gap between what the customer expects and what the customer actually gets.

There is one more GAP not normally covered in marketing introduction courses, and that is the gap between what the customer wants, and what they think will fulfill that want. By definition, customers know what they want, but they may believe that a service or product will fulfill that want, when in reality it will not. Equally difficult is when customers are unable to communicate what they want. While ultimately it is up to the marketer to figure this out, it is a true gap, especially when dealing with new products that have been developed and don’t yet have a degree of customer history or understanding.

The Gap Model of Service Quality is really common sense (as is most of marketing), but it gives you a way to think about the problem and to help you focus on solving the problem.

Assignment

In this assignment, you will complete another key section of your marketing plan.

Write a 2-3 page description of the product/service to be sold or delivered by your firm. This could be a completely new-to-the-world concept, or an improvement on an existing concept.

·       Please discuss the basic attributes in appropriate detail, and then expand to describe the experiential and emotional aspects of the product or service. Be sure to address the role of branding in fulfilling customer expectations for your product or service.

·       Within this section draft, please demonstrate your grasp of the marketing terminology and concepts related to products and services. For example, it would be appropriate to discuss whether your product is a convenience, shopping, or specialty good.

Be sure to follow writing guidelines for this assignment.

The Marketing Mix: Products & Services

Think about the last time you received a gift that wasn’t quite what you wanted (for example, a computer scanner for your 40th birthday when what you really wanted was a spa day!). In some ways, a poorly-selected gift carries an unspoken message – “I don’t know enough about you to choose a gift you’ll enjoy.”

Marketers can make the same kind of mistake. By misunderstanding the multi-layered attributes conveyed by a product or service, or failing to match those attributes to the needs and expectations of the target market, major marketing mistakes can be made. Perhaps the most famous example is New Coke, launched in April 1985 to compete more effectively against Pepsi, which always scored better than Coke in consumer taste tests and was making serious inroads into Coke’s market share. But New Coke marketers didn’t consider the emotional connection between loyal Coke drinkers and their beverage of choice. By failing to ask the most important question – “do you want a different flavor of Coke?” – New Coke’s marketers ran head-on into consumer resistance, and less than three months later “Coca-Cola Classic” returned to the marketplace.

This lesson will help you learn new ways to think about product and service attributes, and how best to match those attributes to the desires of the consumer, both spoken and unspoken.

A Marketer’s Perspective on Products

There are a number of ways to think about the product portion of the marketing equation. It is the first of the 4P’s usually mentioned (Product, Price, Place, and Promotion) and while what a product is may seem evident, marketers think about products in a number of different ways. One way to think about it is how the consumer goes about shopping for that particular item – the amount of time and effort that a shopper is willing to expend for a given object.

While it might seem that you would find Convenience Products only in Convenience Stores, things are called Convenience Products because of the limited importance the consumer puts on the decision of which product to buy. If you are going to buy a single bottle of Diet Pepsi at a Mobil gas station, you likely aren’t going to comparison shop at the BP station across the street. If you have a headache, you don’t mind paying an outrageous per tablet price to get a couple of aspirin in a package. Convenience Products are products that you normally can find in a number of places, and they are products that consumers are not especially sensitive to their price.

A Shopping Product is an item that consumers spend more time deciding upon, and usually costs more money, than a convenience product. There are two kinds of Shopping Products, Homogeneous Products and Heterogeneous Products. Homogeneous Products are things like stoves and refrigerators that are easily comparable. While one microwave has different features from another, it is relatively easy to compare two different models, and make an accurate price comparison based on your perceived needs and the value you put on features. Heterogeneous Products, on the other hand, are items much harder to compare because they involve individual tastes and preferences, or are rare or unique, such as clothing.

Specialty Products are those items that carry the image (if not the reality) of being rare and exclusive. A Rolex watch is an example of such an item – you can only buy a Rolex in certain places, and the price itself keeps the product exclusive and sought after. At the opposite end of this spectrum are Unsought Products, which are things like cemetery plots and life insurance. People rarely go looking for either product.

So what is the point of classifying products in this fashion? One of the reasons is that you are able to figure out how to sell the product. You are not going to need door-to-door salespeople selling chewing gum, but if you are selling a high-end technical product that needs some introduction, guidance, and ongoing service, you won’t sell the product in a self-service retailer like Target. For Specialty Products, you also know a fair amount about the consumer you are selling to, and won’t likely see Rolex watches sold under Wal-Mart’s “Price Drop” sign.

You are familiar with symbols – a symbol is something that represents something larger or more complex than the symbol. A country’s flag, your high school’s mascot, and a necklace with a religious icon are symbols. When you see one, you know a bit (sometimes quite a bit) about a person’s beliefs. It is a bit of intellectual shorthand – it allows you to communicate a complex message in a simple and easily perceived way.

Likewise, a company’s brand is a symbol – it is a way of communicating complex images and thoughts in a very simple way. The symbol(s) for Coke tells you what the product is, of course, but it also calls to mind your own experiences with the product, and the countless images and scenarios you have seen played out in all of their advertisements. There are varieties of brands, but the really critical thing to remember is that a brand, if it is good, communicates a powerful image of the product. The Coke polar bears, seen at the holidays, have nothing to do with the product but help the customer have a good feeling associated with the brand.

There is another helpful way of looking at the ideas behind the marketing of products, and that is to think of products as experiences. First, there is the experience of buying and using the product – is it convenient, easy to use, are the directions hard to read? There is also an emotional component: If you buy a fire extinguisher for the kitchen, you feel prepared and that you are caring for your family; if you buy a new automobile battery you buy more than the starting power, but the peace of mind knowing that the car will perform reliably when you need it.

When marketers develop a new product, it’s important to consider all of these attributes – shopping type, branding, experience – because they will drive the subsequent decisions about place, price and promotion.

What Makes Service Marketing Unique?

Marketing a Service

Gap Model Graphic

There is some debate as to whether a mostly service economy is a good idea, or whether a healthy economy needs to have a significant manufacturing component. Regardless, over half of the United States’ economy is in the service sector, and that percentage is likely to rise.

Although the idea of a service and a product sometimes overlap, it’s clear that services have some different attributes than products. The first is that services are largely intangible, and because they have no physical attributes, it is much harder for the customer to compare one service to another in making the purchase decision. In the same way, it is more difficult for the marketer to “sell” the features and benefits of a service. You can also see that services are frequently sold, produced, and used at the same time (although this distinction is less important than other distinctions). When you go to an accountant for advice, the buying, selling, and using of that advice pretty much all happens at the same time.

Services are mostly heterogeneous, that is, they largely differ for individual seller, and frequently, for buyer. If you had an illness, and your aunt went to the doctor with more or less the same ailment, it wouldn’t be wise to use her service experience to treat yourself (unless, of course, you are both hypochondriacs, in which case this might work out just fine). So, as with heterogonous shopping products, the experience is relatively different for each consumer and provider.

Services are also considered perishable. You can’t put your annual physical in a box for later use if you can’t make your doctor’s appointment next week. You can go to another concert next week, but you can’t save last week’s concert for later.

Thanks to many of these characteristics of a service – especially the intangibility, the heterogeneity, and the inseparability of the service from its provider – it can be quite difficult for both marketers and customers to accurately judge the quality of a service. However, there are five basic characteristics often used to gauge service quality:

Reliability – is the service the same, every time it is delivered?

Responsiveness – is the service available when you want it?

Assurance – can you trust the employee to be knowledgeable and courteous?

Empathy – does the employee understand you and your specific needs?

Tangibles – does any physical evidence connected with the service (surroundings, uniforms, etc.) inspire confidence?

To say that we occasionally run across service quality “gaps” is an understatement – frequently you do not get the service you wish for. There is an idea in marketing to put these gaps into a more understandable format, using the Gap Model of Service Quality. This model describes five distinct gaps:

GAP 1 – This is the difference between what customers actually want and what management thinks they want. This gap is the source of many marketing problems. The only thing worse than this gap is not mentioned, and that is when customer wants differ from what management provides because management is too bound up in what they think the customer should want, or that the customer should want what they are producing. When put in these terms it sounds kind of unlikely a company would find themselves in this position, but it is really amazing how often this happens.

GAP 2 – This is the gap between what the customer wants and how management decides to fill those wants. In other words, it is an issue of the management’s full understanding of how to meet those needs.

GAP 3 – This gap exists if management hears what customers want, and develops a service or product to meet those wants, but fails to deliver that service effectively. The customer’s needs have been addressed theoretically, but the organization is unable to actually provide the service they set out to provide.

GAP 4 – This gap describes the situation when the customer’s experience is different than the company’s description or communication of the service. This comes about from unmet customer expectations, either inappropriately assumed by the customer, or those expectations that the company has given the customer reason to believe.

GAP 5 – This is the gap between what the customer expects and what the customer actually gets.

There is one more GAP not normally covered in marketing introduction courses, and that is the gap between what the customer wants, and what they think will fulfill that want. By definition, customers know what they want, but they may believe that a service or product will fulfill that want, when in reality it will not. Equally difficult is when customers are unable to communicate what they want. While ultimately it is up to the marketer to figure this out, it is a true gap, especially when dealing with new products that have been developed and don’t yet have a degree of customer history or understanding.

The Gap Model of Service Quality is really common sense (as is most of marketing), but it gives you a way to think about the problem and to help you focus on solving the problem.

Assignment

In this assignment, you will complete another key section of your marketing plan.

Write a 2-3 page description of the product/service to be sold or delivered by your firm. This could be a completely new-to-the-world concept, or an improvement on an existing concept.

·       Please discuss the basic attributes in appropriate detail, and then expand to describe the experiential and emotional aspects of the product or service. Be sure to address the role of branding in fulfilling customer expectations for your product or service.

·       Within this section draft, please demonstrate your grasp of the marketing terminology and concepts related to products and services. For example, it would be appropriate to discuss whether your product is a convenience, shopping, or specialty good.

Be sure to follow writing guidelines for this assignment.

Shopping Products Convenience Products Specialty Products Unsought Products

Explanation / Answer

I am working with an automobile firm and my firm has come up with an electric car to meet the needs of the customers as they are looking for a product which is eco-friendly and do not put an additional burden on their pocket as the fuel price is soaring high.

Car is a specialty good as the cars carry an image of being rare and exclusive. Customers are brand loyal to a particular brand and they attach some prestige issue to a car purchased. The car has brand image in the minds of the cutomers and purchasing a particular brand would add to their social status.

A car has more of emotional and brand value than its utility.The social status of a person is measured in terms of the brand of the car possessed by him.

Moreover, there are certain important attributes of the car:

Seating Space : Experiental aspect : Customers would experience comfort if the car has got large seating space.

Comfort : Experiental aspect : Customers would experience comfort in seating and using the car.

Brand Image : It is more of an emotional aspect as the brand image of the car would add the driver's social status.

Mileage : Experiental aspect as the customerswould always prefer cars which give high mileage as it do not put additional burden on their pocket.

Price : Emotional aspect as the customers find that the car should offer the right Value for Money.

Features of the car : Experiental aspect as the customers would experience the features of the car and enjoy it.

Branding is very important in fulfilling the needs of customers in purchasing a car. Brand image of a car in the minds of the customer would make them feel proud and priviliged as it adds to their social status. Customers have a certain dream car in their minds which is being built up by the brand image of the car and thus feel proud to be the owner of the car. Thus Branding is very important in fulfilling customer expectations of the car.

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