PRINCIPLE OF MARKETING Q4 – OVERALL LESSON

[LESSON 11 “Products”]
PRODUCTS AND SERVICES DEFINE
 Product - is defined as anything that can be offered to a market for attention, acquisition,
use, or consumption to satisfy want or need. Products can be tangible( those we can see)
or intangible (those we cannot see but we can experience).
MAJOR PRODUCTS CLASSIFICATIONS include goods, services, and ideas.
 Goods - are physical products that we can touch, smell, see, and hear, while services are
intangible products that we obtain through ideas or experiences.
Products can also include events, places, or organizations (Kotler and Armstrong 2013).
Sometimes, products are sold as a bundle, meaning we get the product as well as the
complementary services. For example, for products that require a certain degree of technical
knowledge to operate, such as medical equipment like CT-scan or MRI machines, purchaser are
provided with training (ideas and experiences) on their proper usage.
 Services refer not only to intangible goods complementary actions attached to a tangible
product, but also activities, benefits, or satisfactions offered which are intangible in nature,
such as banking airline services, hotel services, retail services, and wireless
communication.

TYPES OF PRODUCTS
 Intangible Products - Hold their own benefits as items that are not physical in nature.
Examples include education, data, and software.
 Tangible Products - Physical assets that can be handed to a customer after purchase.
Examples include real estate and clothing.

LEVELS OF PRODUCTS
 Core or Generic Product - The core or generic level refers to the functional essence of the
product. 4. It is the reason why a customer purchases a product in the first place. For
example, a customer will primarily buy toothpaste for its capability to clean teeth.
 Actual Product – This level corresponds to the basic features of a product that make it
usable in the first place. This level most evident in the product’s packaging and labels. For
example, the actual product level of toothpaste consists of its teeth-cleaning chemicals and
the amount of toothpaste in a tube or pack.
 Extended Product - This level refers to additional features added to the product to attract
more customers. The toothpaste company may offer a toothpaste with mint which will give
the customer fresh breath when using it. Other features they might add to their toothpaste
include baking soda or charcoal for whiter teeth.
 Modified Products - This product level pertains to additional product features that will meet
new demands and needs of customers. Companies may consider modifying an existing
product so that it will continue to sell. For example, toothpaste may have additional features
such as eliminating tooth sensitivity and having different flavors. A printer has been
introduced with 3 in 1 function.
 Potential Product - This Level refers to the product features that a firm plans to add or
change in the future. The firm adds these features in order to further differentiate their
products from that of their competitors. For example, a new toothpaste with milder flavor
may be introduced. Chemicals may also be added to guarantee longer bacterial protection.
E jeep will replace the traditional gas powered jeepneys in the Philippines.
[LESSON 12 “Product Life Cycle”]
Upon launching on the market, the product starts to go through the product life cycle (PLC). This
period encompasses its first promotion up to the time that it is no longer sold to customers. The
product life cycle is composed of four stages- Introduction, growth, maturity, and decline
4 STAGES OF PRODUCT LIFE STYLE
1. Introduction - This is the first stage of PLC, starting with product ideation and continuing
until the product is introduced in the market. In this stage, brands conduct marketing and
promotional activities, adapt product life strategies, etc., to ensure the product reaches its
target audience.
At this level companies aim is to insure that the products reaches its target audience.
2. Growth - During the growth stage, consumers have accepted the product in the market and
customers are beginning to truly buy in. That means demand and profits are growing,
hopefully at a steadily rapid pace. The growth stage is when the market for the product is
expanding and competition begins developing.
This stage is when the market for the product is expanding and competition begins
developing.
3. Maturity - The maturity stage of the product life cycle is when business growth levels out
because the product has saturated its market. Ironically, this is where the money is made,
but it’s also where the product and business – is at the most risk of disruption from below.
At this level product promotional activities was hold because product has saturated the
market.
4. Decline - The decline stage in the product life cycle is when a product dissolves as a result
of decreased or negative growth. It is a result of lower demand, which ultimately results
from new inventions and technology advancements.

MARKETING STRATEGIES AND THE PRODUCT LIFE CYCLE

Introductory stage can be marketed through Informative advertising as well as sales promotions
and support. 12. Informative advertising focuses on describing the features and benefits of the
products. Sales promotion and support.
 Growth Stage - Persuasive advertising highlights the features of the product that give it an
edge over competitors. Additional promotion and support can help reinforce the
performance of the product in stores and other distribution channels.
 Maturity Stage - Reminder Advertising which reinforce the presence of the product in the
market. Sales promotions during this stage may also be minimized. Some forms of
reminder advertising include emails, newsletters, display ads, and social media campaigns.
Some of the best ways to use reminder advertising to its full potential are by reinforcing the
key messages and reaching the right target audience.
 Decline - Firms can try to improve the sales performance of the products by lowring the
price to regain customer’s interest. If this does not wotk, companies may need to prepare
for its ultimate demise.

CLASSIFICATION OF PRODUCTS
Products are classified as either consumer or industrial products.
Consumer products - are those that are personally used by customers, such as convenience
products, shopping products, specialty products, and unsought products.
Industrial products - are those used by companies or firms for product creation and other
business operations. These include raw materials, finished products, equipment, and supplies.
TYPES OF CONSUMER PRODUCTS
 Convenience Products - Convenience products are goods that people normally buy and
consume frequently. Examples include shampoo products, household supplies, and food
(goods); jeepney or taxi rides (services); and Movies (ideas)
 Shopping Products - These are goods that people buy or consume less frequently and
are more expensive than convenience products. Before purchasing a shopping product,
people tend to compare compo it with alternative products or services. For example,
clothing brands (goods) are compared with one another terms of design and price. When a
person decides to enroll in a driving school for driving lessons (services or ideas), he or she
has already compared its services and prices those of the driving schools. In other words
we tend to perform selection process in terms of shopping activities.
 Specialty Products - Specialty products are those that arte distributed exclusively by an
authorized distributor. These are even more expensive than shopping products. Specialty
products include gadgets, electronic appliances, and luxury vehicles.
 Unsought Products - These are goods and services that consumers may not consider
highly necessary in their lives. Consumers may avoid purchasing them but companies can
successfully sell them through extensive marketing or personal selling. Encyclopedias are
example of unsought products. Some services are also considered unsought, such as
insurance services.

TYPES OF INDUSTRIAL PRODUCTS

1. Raw Materials – These are goods that the firm processes or assembles to create a new
products. For example, wood may be processed to create furniture. A fan motor and
motherboard are two of the pieces assembled to produce a desktop computer.
2. Finished Products – Finished products are the final products the firm produces. These are
developed using the raw materials, technology, equipment, and manpower provided by the
company.
3. Equipment – These are the machines and tools used in creating products or providing
services. Examples include forklift trucks used by construction companies and ovens used
in bakeries.
4. Supplies - Supplies are products which may not necessarily be used in creating products,
but are important in the daily operations of a firm. These include office supplies such as ball
pens and paper clips.

[LESSON 13 “Customer’s Buying Decision Process”]

Consumer’s buy goods and services because these serve a purpose. Before making a purchase,
a customer goes through a series of steps which determines buying decision. Kotler and
Armstrong (2012) outline the following steps in buying decision process:

THE CONSUMER BUYING PROCESS – Recognition of Need, Information Search, Evaluation of

Alternatives, Purchase Decision, Post-Purchase Evaluation.
1. Need or Problem recognition – The consumer recognizes that he or she has a need to be
satisfied or a problem that must addressed. This is often brought about by the realization of a
difference between a customer’s actual condition and his or her desired being. Sometimes, the
consumer may not even be aware that he or she has needs until some stimuli, such as a TV
advertisement, poster, product jingle, or billboard, capture his/her attention.
2. Information Search - As soon as the consumer recognizes his or her need, he or she starts
searching for products or brands that will best satisfy the need. The consumer begins by
recalling familiar products or brands. This is the internal search.
 When this is not enough, he or she seeks other sources such as friends, experts, and printed
materials and literature like magazine, flyers, etc. and by checking out actual products and
reading their labels and packages. This is called external search.
The products or brands which the consumer considers out of the many available choices
belong to His or her.
3. Evaluation of Alternatives - In this world of globalization and innovations, there is a multitude
of possible solutions to every consumer problem. At this stage, the consumer sets his or her
evaluation criteria, which can be both objective and subjective. This step will result in a
decision to purchase a specific product or brand.
PRODUCTS VS PRODUCTS
OPTIONS — Price, Quality, Features, Brand Awareness, Availability
BRAND A / BRAND B

4. Purchase - At this point, the consumer considers other issues related to actual purchase such
as seller choice (where to buy, availability of product) and terms of sale (whether payment
allows use of credit, installment, etc.). These may also influence the final product selection and
the actual purchase.
Example: Payment method, stores/online, delivery, cash, and credit card.
The consumer may terminate the purchase at any point if he or she is not satisf ed with the
product and other aspects of the transaction. However, if the customer has set clear expectations
regarding the products., and has determined that it is able to satisfy his or her needs, then a
purchase is made.
5. Post- Purchase Evaluation – If a purchase was made, the buyer begins consuming or using
the product. The consumer then examines his or her consumption experience or the actual
product performance against his or her expected satisfaction levels. This can lead to either a
positive level of satisfaction or dissatisfaction.
Some consumers may experience what is known as cognitive dissonance, which is described
as doubts that arise shortly after a purchase questioning whether the right decision was made.