Developing the Marketing Mix: Products are either Goods, Services or Experiences

1. Developing the Marketing Mix: Products are either Goods, Services or Experiences Chapter 8 Self-check questions 1 & 7

2. Self-Check Question One Qantas is researching service quality concerning seat allocation tickets with two (0 – 10) Likert-type scale questions for each stage of the customer’s trip – purchasing, check in, in-flight services, baggage claim – and an overall satisfaction question. For example, the check-in question asked about speed of check-in and the courteousness of staff. Completed tickets/questionnaires could be placed in any of the specially marked receptacles on planes and in terminals for a chance to win 5000 Frequent Flyer points. Comment on the possible research findings and their implications for product design.

3. What is a product? • Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. • It includes physical objects, services, persons, places organisations and ideas.

4. Products • Many products are in physical form such as cars, toasters, shoes and eggs; they are goods, in the jargon of the economists. • We define products broadly to include tangibles such as services and experiences as well.

5. Core Products • The basic level of a product

6. Product Design “Buyers do not buy quarter-inch drills; they buy quarter-inch holes” - - Theodore Levitt

7. Product Design The next step: • build an actual product (a product’s parts, styling, features, brand name, packaging and other attributes that combine to deliver core product benefits) around the core product.

8. Product Design Final step: • build an augmented product (additional customer services and benefits built around the core and actual products) around the core and actual products by offering additional consumer services and benefits.

9. Likert-Type Scale Apsychometric scale commonly involved in research that employs questionnaires. It is the most widely used approach to scaling responses in survey research. For Example…

10. Possible Research Findings • Some consumers expect higher service levels than others – they may desire more interaction from their frequent flyer program and like to be seated in an aisle seat, and require vegetarian meals in-flight. • Some may expect extra services before their flight in one of the 250 Qantas Club lounges across the world, and so they join the Qantas Club.

11. Possible Research Findings • Some expect augmentation by way of packaged tours to holiday destinations. • Some like the idea of receiving a bonus in points from flying with Qantas, so they join the airline’s frequent flyer scheme.

12. Possible Research Findings • For some consumers however, these augmentation elements may not be necessary in meeting their product demands. • Companies may strip away augmentation elements, thus enabling the firm to meet the requirements of market segments seeking value but at lower prices

13. Self-Check Question 7 Provide an example of a company that has stretched its product line both upwards and downwards.

14. Stretching the product line • Stretching the product line both up and down is considered as two way stretching. • Two-way stretching means that the company is extending their product lines upwards and downwards to address different segments of the market. • The two way stretch strategy may be adopted by a company that sits in the middle range of a particular product. • Examples of companies that have stretched their product lines are Sony, General Motors-Holden, and Apple.

15. Sony • Sony introduced its first Walkman in the middle of the market. • As lower-market products moved in, so did Sony by stretching their product line down-ward with cheaper models of the original Walkman. • At the same time, Sony generated a more upmarket version of the Walkman by adding more features such as play-back only, recording options and high-quality playback,thus filling all potential gaps in themarket The original Sony Walkman

16. General Motors-Holden General Motors-Holden has stretched its product line by introducing a line of cars that suit every income and every budget. Holden currently offers customers: The Barina- Low priced car The Commodore- Family car The Statesman- Luxury car

17. Apple Another company that has stretched their product line is apple. Apple currently offer customers: