Info

Marketing Considerations

Convenience

Shopping

Specialty

Unsought

Customer buying behavior

Frequent purchase, little planning, little comparison or shopping effort, low customer involvement

Less frequent purchase, much planning and shopping effort, comparison of brands on price, quality, style

Strong brand preference and loyalty, special purchase effort, little comparison of brands, low price sensitivity

Little product awareness, knowledge (or, if aware, little or even negative interest)

Price

Low price

Higher price

High price

Varies

Distribution

Widespread distribution, convenient locations

Selective distribution in fewer outlets

Exclusive distribution in only one or a few outlets per market area

Varies

Promotion

Mass promotion by the producer

Advertising and personal selling by both producer and resellers

More carefully targeted promotion by both producer and resellers

Aggressive advertising and personal selling by producer and resellers

Examples

Toothpaste, magazines, laundry detergent

Major appliances, televisions, furniture, clothing

Luxury goods, such as Rolex watches or fine crystal

Life insurance, Red Cross blood donations

Industrial product

A product bought by individuals and organizations for further processing or for use in conducting a business.

Industrial Products

Industrial products are those purchased for further processing or for use in conducting a business. Thus, the distinction between a consumer product and an industrial product is based on the purpose for which the product is bought. If a consumer buys a lawn mower for use around home, the lawn mower is a consumer product. If the same consumer buys the same lawn mower for use in a landscaping business, the lawn mower is an industrial product.

The three groups of industrial products and services include materials and parts, capital items, and supplies and services. Materials and parts include raw materials and manufactured materials and parts. Raw materials consist of farm products (wheat, cotton, livestock, fruits, vegetables) and natural products (fish, lumber, crude petroleum, iron ore). Manufactured materials and parts consist of component materials (iron, yarn, cement, wires) and component parts (small motors, tires, castings). Most manufactured materials and parts are sold directly to industrial users. Price and service are the major marketing factors; branding and advertising tend to be less important.

Capital items are industrial products that aid in the buyer's production or operations, including installations and accessory equipment. Installations consist of major purchases such as buildings (factories, offices) and fixed equipment (generators, drill presses, large computer systems, elevators). Accessory equipment includes portable factory equipment and tools (hand tools, lift trucks) and office equipment (computers, fax machines, desks). They have a shorter life than installations and simply aid in the production process.

The final group of industrial products is supplies and services. Supplies include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms). Supplies are the convenience products of the industrial field because they are usually purchased with a minimum of effort or comparison. Business services include maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, management consulting, advertising). Such services are usually supplied under contract.

Organizations, Persons, Places, and Ideas

In addition to tangible products and services, marketers have broadened the concept of a product to include other market offerings—organizations, persons, places, and ideas.

Organizations often carry out activities to "sell" the organization itself. Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization. Both profit and not-for-profit organizations practice organization marketing. Business firms sponsor public relations or corporate image advertising campaigns to market themselves and polish their images. For example, chemical giant BASF markets itself to the general public as a company whose "invisible contributions" result in "visible success." Its ads show how BASF works behind the scenes with its industrial customers to bring the world visible success in everything from water treatment and agricultural productivity to outdoor clothing, sun protection, and sports and leisure equipment. Similarly, not-for-profit organizations, such as churches, colleges, charities, museums, and performing arts groups, market their organizations in order to raise funds and attract members or patrons.

People can also be thought of as products. Person marketing consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people. People ranging from presidents, entertainers, and sports figures to professionals such as doctors, lawyers, and architects use person marketing to build their reputations. And businesses, charities, and other organizations use well-known personalities to help sell their products or causes. For example, more than a dozen big-name companies—including Nike, Buick, Accenture, EA Sports, American Express, Gillette, Gatorade, and Apple—combine to pay more than $100 million a year to link themselves with golf superstar Tiger Woods.3

The skillful use of marketing can turn a person's name into a powerhouse brand. Carefully managed and well-known names such as TV star Oprah Winfrey, designer Yves Saint Laurent, and U.S.-based businessman Donald Trump now adorn everything from sports apparel, housewares, and magazines to book clubs and casinos. Trump, who describes himself as "the hottest brand on the planet," has skillfully made his life a nonstop media event. Says a friend, "He's a skillful marketer, and what he markets is his name."4

Such well-known, well-marketed names hold substantial branding power. A Consider the U.S. TV cook and celebrity Rachael Ray:

Not unlike Oprah or Martha Stewart, Rachael Ray has become a one-woman marketing phenomenon: In less than a decade, she's zipped from nobody to pop-culture icon. Beginning with her 30-Minute Meals cookbooks, followed later by a Food Network TV show, Ray won her way into the hearts of America by demystifying cooking and dishing out a ton of energy. Thanks to her perky personality, which has a dollop of upstate New York twang and a sprinkling of catch phrases such as "yum-o" and "sammies," Rachael

Ray has moved far beyond quick meals. Bearing her name are more than a dozen best-selling cookbooks (the latest is Yum-o! The Family Cookbook), a monthly lifestyle magazine, three Food Network shows, a syndicated daytime talk show, and assorted licensing deals that have stamped her name on kitchen essentials from knives to her own "E.V.O.O." (extra virgin olive oil for those not familiar with Rayisms). There are even Ray-branded music CDs and ring tones. Ultimately, Ray's brand power derives from all that she has come to represent. Her brands "begin with food and move briskly on to the emotional, social, and cultural benefits that food gives us." Ray's persona—and hence her brand—is a "celebration of why food matters."5

Person marketing: Rachael Ray has become a one-woman marketing phenomenon.

Place marketing involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places. Cities, states, regions, and even entire nations compete to attract tourists, new residents, conventions, and company

Social marketing

The use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of society.

offices and factories. California urges you to "Find yourself here." The Chinese National Tourist Office (CNTO) invites travelers from around the world to "Discover China now!" The CNTO has 15 overseas tourist offices. Tourism in China has been booming as more and more travelers discover the treasures of China's ancient civilization alongside the towering skylines of modern cities such as Shanghai and Beijing (site of the 2008 Summer Olympics). At its Web site, the CNTO offers information about the country and its attractions, travel tips, lists of tour operators, and much more information that makes it easier to say "yes" to China travel.6

Ideas can also be marketed. In one sense, all marketing is the marketing of an idea, whether it is the general idea of brushing your teeth or the specific idea that Crest toothpastes create "healthy, beautiful smiles for life." Here, however, we narrow our focus to the marketing of social ideas. This area has been called social marketing, defined by the Social Marketing Institute as the use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of society.7

Social marketing programs include public health campaigns to reduce smoking, alcoholism, drug abuse, and obesity. Other social marketing efforts include environmental campaigns to promote wilderness protection, clean air, and conservation. Still others address issues such as family planning, human rights, and racial equality. The Ad Council of America (www.adcouncil.org) has developed dozens of social advertising campaigns, involving issues ranging from preventive health, education, and personal safety to environmental preservation.

But social marketing involves much more than just advertising—the Social Marketing Institute (SMI) encourages the use of a broad range of marketing tools. "Social marketing goes well beyond the promotional 'P' of the marketing mix to include every other element to achieve its social change objectives," says the SMI's executive director.8

Author I Now that we've Comment | anSwered the "What is a product?" question, let's dig into the specific decisions that companies must make when designing and marketing products and services.

Product and Service Decisions

Product quality

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

Don't forget Figure 8.1! The focus of all of these decisions is to create core customer value.

Marketers make product and service decisions at three levels: individual product decisions, product line decisions, and product mix decisions. We discuss each in turn.

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