Chapter 12: Product and
Promotion
1: Product: It’s probably more than you thought
1.1: Services
Intangibility: Services cannot be touched, smelled or seen. This creates uncertainty: is the
purchase worthwhile?
Inseparability: You cannot separate the buyer of a service from the person who renders
it. Delivery requires interaction between the buyer and the provider: the customer
contributes to the quality of the service. E.g. doctor: stating symptoms clearly
Variability: e.g. a talented massage therapist will help you relax, a mediocre one might
create tension. A talented one might be better later in the day than at the beginning, or
decrease in value after an emotional event.
Perishability: Marketers cannot store services for delivery at peak periods. E.g. at a
restaurant: they only have a certain amount of seats. You can’t tell your 8 pm customers
to come back tomorrow at 5 pm.
1.2: Goods versus Services
How to determine whether a product is a good or service? A goods or services spectrum
is a good tool for analysing the relationship between the two.
One extreme: pure goods. E.g. ketchup or socks
At the other extreme: pure services: e.g. piano lesson
Other products like a dinner at a restaurant falls in between: Your dish is served (service),
but the food you eat is a good. E.g. Pizza hut
1.3: Purchasing a product
When purchasing a product: you actually purchase a complete product package. This
includes a core benefit, actual product and product augmentations.
Core benefit: this is the benefit that satisfies their needs. E.g. purchasing a cell phone:
communication. A secondary benefit might include entertainment, since it plays music
too.
Actual product: The product itself that provides the core benefit. This might be tough to
identify if the product is a service. E.g. going to the doctor. Core benefit: health. Actual
product: a doctor in a white coat poking you.
Augmented product: Most marketers wrap their actual products in additional goods and
services. This increases competition. For instance, cell phones come with warranties or
insurance.
, 1.4: Product classification
There exist two types of products: consumer and business products. They are identified in the
different classifications by its reason of purchase.
Consumer products: are purchased for personal consumption
Business products: purchased to use directly or indirectly in the production of another product.
1.4.1: Consumer product categories
1. Convenience products: these are inexpensive goods and services that consumers buy
frequently with limited consideration. Widespread distribution, and producer promotion. E.g.
toothpaste and shampoo
2. Shopping products: more expensive, less frequently bought. Consumers look for best value,
and learn more about features and benefits through shopping processes. Distribution is
widespread but more selective. Producers and retailers promote. E.g. Cars, computers and
cell phone services.
3. Specialty products Much more expensive: barely purchased. Distribution is highly selective;
people tend to go out of their ways to find the right brand. Producers and retailers promote
these with a highly targeted audience. E.g. sport cars
4. Unsought products Goods and services that hold little interest. Price and distribution vary
widely. Promotion tends to be aggressive to attract consumers. E.g. Blood donation
1.4.2: Business product categories
1. Installations designed for a long productive life. Marketing emphasises personal selling and
customisation. E.g. airplanes
2. Accessory equipment smaller movable capital purchases; for a shorter productive life than
installations. Marketing focuses on personal selling. E.g. furniture
3. Maintenance, repair and operating products are small-ticket items that businesses consume
on an ongoing basis. Marketing emphasises efficiency. E.g. copy paper
4. Raw materials farm and natural products used in producing other products. Marketing
emphasises price and service. E.g. cotton and wheat
5. Component parts and processed materials include finished products used in producing
others. Marketing emphasises quality and price and service. E.g. Batteries
6. Business services are services businesses purchase to facilitate operations. Marketing focuses
on quality and relationships. E.g. Legal services
Promotion
1: Product: It’s probably more than you thought
1.1: Services
Intangibility: Services cannot be touched, smelled or seen. This creates uncertainty: is the
purchase worthwhile?
Inseparability: You cannot separate the buyer of a service from the person who renders
it. Delivery requires interaction between the buyer and the provider: the customer
contributes to the quality of the service. E.g. doctor: stating symptoms clearly
Variability: e.g. a talented massage therapist will help you relax, a mediocre one might
create tension. A talented one might be better later in the day than at the beginning, or
decrease in value after an emotional event.
Perishability: Marketers cannot store services for delivery at peak periods. E.g. at a
restaurant: they only have a certain amount of seats. You can’t tell your 8 pm customers
to come back tomorrow at 5 pm.
1.2: Goods versus Services
How to determine whether a product is a good or service? A goods or services spectrum
is a good tool for analysing the relationship between the two.
One extreme: pure goods. E.g. ketchup or socks
At the other extreme: pure services: e.g. piano lesson
Other products like a dinner at a restaurant falls in between: Your dish is served (service),
but the food you eat is a good. E.g. Pizza hut
1.3: Purchasing a product
When purchasing a product: you actually purchase a complete product package. This
includes a core benefit, actual product and product augmentations.
Core benefit: this is the benefit that satisfies their needs. E.g. purchasing a cell phone:
communication. A secondary benefit might include entertainment, since it plays music
too.
Actual product: The product itself that provides the core benefit. This might be tough to
identify if the product is a service. E.g. going to the doctor. Core benefit: health. Actual
product: a doctor in a white coat poking you.
Augmented product: Most marketers wrap their actual products in additional goods and
services. This increases competition. For instance, cell phones come with warranties or
insurance.
, 1.4: Product classification
There exist two types of products: consumer and business products. They are identified in the
different classifications by its reason of purchase.
Consumer products: are purchased for personal consumption
Business products: purchased to use directly or indirectly in the production of another product.
1.4.1: Consumer product categories
1. Convenience products: these are inexpensive goods and services that consumers buy
frequently with limited consideration. Widespread distribution, and producer promotion. E.g.
toothpaste and shampoo
2. Shopping products: more expensive, less frequently bought. Consumers look for best value,
and learn more about features and benefits through shopping processes. Distribution is
widespread but more selective. Producers and retailers promote. E.g. Cars, computers and
cell phone services.
3. Specialty products Much more expensive: barely purchased. Distribution is highly selective;
people tend to go out of their ways to find the right brand. Producers and retailers promote
these with a highly targeted audience. E.g. sport cars
4. Unsought products Goods and services that hold little interest. Price and distribution vary
widely. Promotion tends to be aggressive to attract consumers. E.g. Blood donation
1.4.2: Business product categories
1. Installations designed for a long productive life. Marketing emphasises personal selling and
customisation. E.g. airplanes
2. Accessory equipment smaller movable capital purchases; for a shorter productive life than
installations. Marketing focuses on personal selling. E.g. furniture
3. Maintenance, repair and operating products are small-ticket items that businesses consume
on an ongoing basis. Marketing emphasises efficiency. E.g. copy paper
4. Raw materials farm and natural products used in producing other products. Marketing
emphasises price and service. E.g. cotton and wheat
5. Component parts and processed materials include finished products used in producing
others. Marketing emphasises quality and price and service. E.g. Batteries
6. Business services are services businesses purchase to facilitate operations. Marketing focuses
on quality and relationships. E.g. Legal services
