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Product and Services
Strategy
Prof. P.V. (Sundar) Balakrishnan
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What is a Product?
A
Product
Product is anything that can be offered to a market for
attention, acquisition, use, or consumption and that might
satisfy a want or need. Includes:
Physical Objects, Services, Events, Persons
Places, Organizations, Ideas
Combinations of the above
A
Service
Service consist of activities, benefits, or satisfactions
offered for sale that are essentially intangible and do not
result in the ownership of anything.
Banking, Hotels, Tax Preparation, Home Repair Services
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Brand
Name
Quality
Level
Packaging
Design
Features
Delivery
& Credit
Installation
Warranty
After-
Sale
Service
Core
Benefit or
Service
Core
Benefit or
Service
Actual Product
Actual Product
Core Product
Core Product
Augmented Product
Augmented Product
Levels of Product
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Customer Value Hierarchy
Core benefit
Drill- “holes”;
Hotels – “rest & sleep”
Basic product
Bed, closet, …
Expected product
Clean bed; fresh towels,…
Augmented product
“..Sizzle, not the steak”
Potential product
All possible augmentations
MyCereal.com
Five Product Levels
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Unsought Products
Unsought Products
¾ New innovations
¾ Products consumers don’t
want to think about these
products
¾ Require much advertising &
personal selling
i.e Life insurance, blood donation
Product Classifications: Consumer Products
Specialty Products
Specialty Products
¾ Special purchase efforts
¾ High price
¾ Unique characteristics
¾ Brand identification
¾ Few purchase locations
i.e Lamborghini, Rolex
Shopping Products
Shopping Products
¾ Buy less frequently
¾ Higher price
¾ Fewer purchase locations
¾ Comparison shop
i.e Clothing, cars, appliances
Convenience Products
Convenience Products
¾ Buy frequently & immediately
¾ Low priced
¾ Mass advertising
¾ Many purchase locations
i.e Candy, newspapers
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Width - number of
different
product
lines
Width
Width - number of
different
product
lines
Length - total
number of items
in product lines
Length
Length - total
number of items
in product lines
Depth - number of
versions of each
product
Depth
Depth - number of
versions of each
product
Product Mix -
all the product
lines & items
offered
Product Mix
Product Mix
-
-
all the product
lines & items
offered
Consistency
Product Mix Decisions