9.1 Products, Services, and Experiences
3 min read•june 25, 2024
Products, services, and experiences form the core of what companies offer to consumers. From tangible goods to intangible offerings and memorable events, these elements satisfy customer needs and wants in various ways.
Understanding the categories of consumer and business products helps marketers tailor their strategies. By considering the four levels of , companies can create offerings that not only meet basic needs but also differentiate themselves in the market, delivering unique value to customers.
Products, Services, and Experiences
Products, services, and experiences
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- Products represent tangible goods that can be physically touched, held, and owned by consumers (cars, clothing, electronics, food items)
- Services are intangible offerings that provide benefits or satisfaction to customers but cannot be physically possessed (haircuts, legal advice, car repairs, education)
- Experiences are memorable events or interactions that engage customers emotionally and often involve a combination of products and services (theme park visits, luxury resort stays, music concerts, guided tours)
Categories of consumer products
- Consumer products
- Convenience products are frequently purchased items that require minimal effort and comparison from consumers (snacks, toiletries, newspapers)
- Shopping products are items purchased less frequently, involving more time and effort from consumers to compare and select (clothing, furniture, appliances)
- Specialty products have unique characteristics or strong brand identification, requiring special effort from consumers to purchase (luxury cars, designer clothing, high-end electronics)
- Unsought products are items not actively sought by consumers until a specific need arises (life insurance, funeral services, fire extinguishers)
- Business products
- Raw materials are basic ingredients or components used in the production process (lumber, crude oil, minerals, agricultural products)
- includes high-cost, long-lasting items used in production or operations (machinery, heavy-duty vehicles, buildings)
- consists of less expensive, shorter-lived items that support business operations (hand tools, office supplies, computers)
- Processed materials are components or ingredients that have undergone some processing before being used in production (plastic resins, steel, flour, fabric)
- Supplies are frequently consumed items that support business operations (paper, pens, cleaning products, light bulbs)
- Business services are intangible offerings that support business operations (consulting, legal services, software, advertising)
Four levels of product strategy
- : The fundamental need or want that the satisfies and the essential reason why a customer purchases the product (a car's core benefit is transportation)
- : The tangible or intangible item that delivers the core benefit, including the product's essential features and characteristics (a car's basic product includes the engine, wheels, and chassis)
- : The set of attributes or conditions buyers normally expect when purchasing the product, including features considered standard for the product category (a car's expected product includes safety features, comfortable seats, and a warranty)
- : Additional features, benefits, or services that distinguish the product from competitors, adding value beyond the expected product and creating a competitive advantage (a car's augmented product may include a premium sound system, navigation, or roadside assistance)
- strategies can be employed at this level to create unique value propositions and stand out in the market Understanding the four levels helps marketers design and position products effectively by focusing on the core benefit, meeting customer expectations with the basic and expected product levels, and differentiating the product through augmentation to create a competitive edge and deliver
Product Strategy and Brand Management
- : The stages a product goes through from introduction to decline, influencing marketing strategies and decisions
- : The value and power a brand holds in the marketplace, based on consumer perception and experiences
- : The complete set of all products offered by a company, including product lines and individual items
Key Terms to Review (24)
Accessory Equipment: Accessory equipment refers to additional products or tools that complement and enhance the primary product or service being offered. These supplementary items are designed to improve the functionality, convenience, or overall experience for the consumer within the context of products, services, and experiences.
Augmented Product: The augmented product refers to the additional benefits, services, and support that are provided to customers beyond the core product or service offering. It encompasses the entire customer experience and perceived value that extends beyond the basic, tangible product.
Basic Product: A basic product is the core or fundamental offering that meets the customer's primary need or desire. It is the most essential and stripped-down version of a product, without any additional features or enhancements. The basic product forms the foundation upon which additional product levels can be built to provide more value and benefits to the customer.
Brand Equity: Brand equity refers to the value a brand has accumulated over time, which manifests in the way consumers think, feel, and behave towards the brand. It encompasses the positive associations, loyalty, and perceived quality that customers attribute to a brand, ultimately influencing their purchasing decisions and the brand's overall market performance.
Business Product: A business product refers to any tangible good or intangible service that a company offers to its customers or clients. It is the core offering that a business provides in order to generate revenue and meet the needs of its target market. Business products can range from physical items like manufactured goods to professional services like consulting or software solutions.
Business Service: A business service is a service provided by a company or organization to its customers or clients. It is a type of service that is essential for the operation and success of a business, rather than a service directly consumed by the end-user. Business services support the core functions of an organization and enable it to deliver value to its customers.
Convenience Product: A convenience product is a type of consumer product that is readily available, easy to purchase, and requires minimal effort from the consumer to obtain and use. These products are designed to provide immediate satisfaction and simplify the shopping experience for consumers.
Core Benefit: The core benefit is the fundamental need or desire that a product or service is designed to satisfy for the customer. It represents the essential value or primary reason a customer chooses to purchase and use a particular offering.
Customer Value: Customer value is the perceived worth that a product or service holds for a customer, based on their assessment of the benefits received relative to the costs incurred. It is a critical concept in marketing that drives customer satisfaction, loyalty, and ultimately, a company's success.
Expected Product: The expected product refers to the level of quality, features, and performance that a customer anticipates or expects from a product or service. It represents the minimum standard that a consumer expects a product to meet or exceed in order to satisfy their needs and desires.
Experience: Experience refers to the subjective, personal interactions and sensations that an individual has with products, services, or events. It encompasses the cognitive, emotional, and behavioral responses that shape one's perceptions and evaluations of these encounters.
Major Equipment: Major equipment refers to the large, complex, and high-value assets that are essential for the production or delivery of products, services, and experiences. These are the critical pieces of machinery, vehicles, or infrastructure that enable an organization to function and meet its operational objectives.
Processed Material: Processed material refers to raw materials that have undergone various physical, chemical, or mechanical transformations to alter their properties and make them suitable for use in the production of goods or services. These materials are often modified to improve their durability, functionality, or aesthetic appeal, enabling their integration into a wide range of products and experiences.
Product: A product is anything that can be offered to a market to satisfy a want or need. It encompasses physical goods, services, experiences, and even ideas. The concept of a product is central to marketing, as it represents the core offering that a business provides to its customers.
Product Differentiation: Product differentiation is the process of distinguishing a product or service from others in the market to make it more attractive to a particular target audience. It involves identifying and highlighting unique features, qualities, or benefits that set a product apart from its competitors, allowing it to command a premium price or gain a competitive advantage.
Product Lifecycle: The product lifecycle refers to the stages a product goes through from its introduction to the market to its eventual decline. This concept is crucial in understanding the marketing and strategic decisions surrounding a product throughout its existence.
Product Mix: The product mix, also known as the product assortment, refers to the total collection of products and items a company offers to its customers. It encompasses the variety, depth, and breadth of products a business provides to meet the diverse needs and preferences of its target market.
Product Strategy: Product strategy is the overarching plan that guides the development, positioning, and management of a company's products or services. It involves making strategic decisions to create, market, and maintain offerings that meet customer needs and align with the organization's broader business objectives.
Raw Material: Raw material refers to the basic unprocessed materials or components that are used to produce goods or provide services. These are the fundamental inputs that undergo transformation or assembly to create a final product or deliver an experience for the consumer.
Service: Service refers to the intangible products or activities that businesses provide to customers in exchange for value, such as professional expertise, entertainment, or problem-solving. Services are the core offerings of many industries and are distinct from physical goods in their focus on customer experience and the inseparability of production and consumption.
Shopping Product: A shopping product is a type of consumer product that requires comparison shopping before purchase. Consumers typically spend more time and effort researching and evaluating these products, comparing features, quality, and prices across multiple options before making a final decision.
Specialty Product: A specialty product is a unique, high-quality item that caters to the specific needs or preferences of a particular group of consumers. These products often command a premium price due to their exclusivity, specialized features, or perceived value.
Supply: Supply refers to the quantity of a product or service that producers are willing and able to offer for sale at various prices during a given time period. It represents the relationship between the price of a good or service and the amount producers are willing to provide to the market.
Unsought Product: An unsought product is a product that a customer does not actively seek out or think about purchasing. These are products that consumers are not aware they need or want until they are presented with them through advertising or other marketing efforts.