COMM 223 – Marketing Management
Chapter 7
Products, Services, and Brands:
Building Customer Value
Comprehensive Study Notes
,1. What Is a Product?
A product is defined as anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need.
This definition is deliberately broad. Products include:
• Physical goods (cars, clothing, phones)
• Services (banking, airline travel, home repair)
• Events, persons, places, organizations, and ideas
• Any combination of the above
Services, as a special subcategory, are defined as activities, benefits, or satisfactions offered for
sale that are essentially intangible and do not result in the ownership of anything. Examples:
banking, hotels, wireless communication, home repair.
📌 The key insight: 'product' in marketing is not a physical object — it is anything that
delivers value to a buyer. This broad conception is foundational to everything in this chapter.
1a. Products, Services, and Experiences
Marketing mix planning always begins with the market offering. The spectrum of offerings ranges
from pure tangible goods (soap, salt — no service component) to pure services (doctor's exam,
financial advising — no tangible good). Between these extremes, many goods-and-services
combinations are possible.
The Move Toward Experiences
As products and services become increasingly commoditized, companies are moving to a new
level: creating and managing customer experiences.
• Disney: Theme parks deliver 'a thousand small wows' — manufactured dreams and
memories.
• Nike: 'It's not so much the shoes but where they take you.'
• Apple Retail Stores: Don't just sell products — create an immersive 'life-feels-good' brand
experience. Genius Bar, workshops, and hands-on access deepen brand engagement. As
one Apple executive said: 'Don't sell! Build an amazing brand experience, and then sales
will just naturally happen.'
📌 In competitive markets, the experience surrounding a product is often what differentiates
a brand. This is why companies invest heavily in store design, customer service culture, and
digital engagement.
, 1b. Levels of Product and Services
Product planners must think about products on three distinct levels (Figure 7.1). Each level adds
more customer value.
Level Name Description Harley-Davidson Example
1 (Core) Core Customer The underlying benefit or need Freedom, independence,
Value being satisfied. Ask: What is the power, authenticity, self-
buyer really buying? expression, lifestyle
2 (Middle) Actual Product The physical product with The motorcycle itself — its
features, design, quality level, styling, sound, parts, and
brand name, and packaging. name
3 (Outer) Augmented Additional services and benefits: Warranty, quick repair,
Product warranties, delivery, after-sale showroom accessories,
service, community programs. H.O.G. membership, roadside
assistance, HOG Magazine
Key insight: Consumers perceive products as complex bundles of benefits. A woman buying
lipstick buys more than lip colour — she buys hope and beauty (Charles Revson, Revlon). Smart
marketers design all three levels intentionally.
1c. Product and Service Classifications
All products fall into two broad classes based on who buys them and why.
A. Consumer Products
Consumer products are bought by final consumers for personal consumption. They are classified
by how consumers shop for them:
Type Buying Behaviour Price Distribution Promotion Examples
Convenienc Frequent, little Low Widespread, Mass promotion Detergent, candy,
e planning or convenient by producer magazines, fast
comparison effort locations food
Shopping Less frequent; Higher Selective, Advertising + Furniture, clothing,
much comparison fewer outlets personal selling appliances, hotel
on quality, price, by producer services
style and resellers
Specialty Strong brand Highest Exclusive — More targeted Lamborghini,
preference; special one or few promotion Rolex, designer
purchase effort; outlets per clothes, specialist
little comparison market area doctors
Unsought Little awareness or Varies Varies Aggressive Life insurance,
interest; may resist advertising + preplanned
Chapter 7
Products, Services, and Brands:
Building Customer Value
Comprehensive Study Notes
,1. What Is a Product?
A product is defined as anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need.
This definition is deliberately broad. Products include:
• Physical goods (cars, clothing, phones)
• Services (banking, airline travel, home repair)
• Events, persons, places, organizations, and ideas
• Any combination of the above
Services, as a special subcategory, are defined as activities, benefits, or satisfactions offered for
sale that are essentially intangible and do not result in the ownership of anything. Examples:
banking, hotels, wireless communication, home repair.
📌 The key insight: 'product' in marketing is not a physical object — it is anything that
delivers value to a buyer. This broad conception is foundational to everything in this chapter.
1a. Products, Services, and Experiences
Marketing mix planning always begins with the market offering. The spectrum of offerings ranges
from pure tangible goods (soap, salt — no service component) to pure services (doctor's exam,
financial advising — no tangible good). Between these extremes, many goods-and-services
combinations are possible.
The Move Toward Experiences
As products and services become increasingly commoditized, companies are moving to a new
level: creating and managing customer experiences.
• Disney: Theme parks deliver 'a thousand small wows' — manufactured dreams and
memories.
• Nike: 'It's not so much the shoes but where they take you.'
• Apple Retail Stores: Don't just sell products — create an immersive 'life-feels-good' brand
experience. Genius Bar, workshops, and hands-on access deepen brand engagement. As
one Apple executive said: 'Don't sell! Build an amazing brand experience, and then sales
will just naturally happen.'
📌 In competitive markets, the experience surrounding a product is often what differentiates
a brand. This is why companies invest heavily in store design, customer service culture, and
digital engagement.
, 1b. Levels of Product and Services
Product planners must think about products on three distinct levels (Figure 7.1). Each level adds
more customer value.
Level Name Description Harley-Davidson Example
1 (Core) Core Customer The underlying benefit or need Freedom, independence,
Value being satisfied. Ask: What is the power, authenticity, self-
buyer really buying? expression, lifestyle
2 (Middle) Actual Product The physical product with The motorcycle itself — its
features, design, quality level, styling, sound, parts, and
brand name, and packaging. name
3 (Outer) Augmented Additional services and benefits: Warranty, quick repair,
Product warranties, delivery, after-sale showroom accessories,
service, community programs. H.O.G. membership, roadside
assistance, HOG Magazine
Key insight: Consumers perceive products as complex bundles of benefits. A woman buying
lipstick buys more than lip colour — she buys hope and beauty (Charles Revson, Revlon). Smart
marketers design all three levels intentionally.
1c. Product and Service Classifications
All products fall into two broad classes based on who buys them and why.
A. Consumer Products
Consumer products are bought by final consumers for personal consumption. They are classified
by how consumers shop for them:
Type Buying Behaviour Price Distribution Promotion Examples
Convenienc Frequent, little Low Widespread, Mass promotion Detergent, candy,
e planning or convenient by producer magazines, fast
comparison effort locations food
Shopping Less frequent; Higher Selective, Advertising + Furniture, clothing,
much comparison fewer outlets personal selling appliances, hotel
on quality, price, by producer services
style and resellers
Specialty Strong brand Highest Exclusive — More targeted Lamborghini,
preference; special one or few promotion Rolex, designer
purchase effort; outlets per clothes, specialist
little comparison market area doctors
Unsought Little awareness or Varies Varies Aggressive Life insurance,
interest; may resist advertising + preplanned
