MARKETING MANAGEMENT

Product is a bundle of satisfactions that a customer buys .It represents a solution to a customers’ problems. It is in this context that marketing definition of a product is more than just what the manufacturer understands it. As Peter Drucker puts, it so long as a product is not bought and consumed, it remains a raw material or at best an intermediate .Product is almost always a combination of tangible and intangible benefits .For example a refrigerator is not just merely steel, plastics, Freon gas, brand name, number of doors ,etc but also involves factors like after sales service ,delivery and installation ,assisting in purchase of the product , dealer network and service etc .It also connotes status in developing Countries .It is the same cases with other products like T.V ,music systems, automobiles, personal products, and services like banks, airlines ,telephone ,courier, etc
What then constitutes a product? To understand and appreciate it, need to perceive it as a four layer item .At the heart of it is the “ core” or “generic” part .As Levitt puts it, this is the table stakes of business, i.e what is needed to play the game of market participation .For a refrigerator manufacturer it is the compressor steel. Freon gas, condenser and various other electrical or electronic components that need to be assembled To a Five Star hotel management it’s the number of rooms, restaurants and swimming pools .To an airline operator ,it’s the aircraft But in today’s competitive world ,there is hardly any difference between a firms on the generic component of the product. Also , because of standardization of technology ,customers are never able to perceive any significant difference among ”core” or “generic” products of competing firms in the industry.
To differentiate its product from all others , the firms names it (branding) ,packs it, puts additional features like laminated top, a stand or a water tap at the door of the refrigerator ,use colors to give a distinctive appeal aesthetics and the like. By doing all this the firm seeks to differentiate its product its product from all other. This makes a “core” product a “formal product” or the expectant product. But, as inter-firm rivalry intensifies , differentiation on the basis of the formal product ceases to exist .Consider the example of ceiling fans, Today, there is no difference in the fans marketed by Crompton , Jay Engineering , Khaitan, etc. All look alike in terms of attributes ,style, color etc. Besides all have identical warranties making the task of a fan marketer difficult.
It is here that the marketer searches for possible differentiation .When the technology ceases to give one and it becomes a price and promotions war, the marketer looks for the intangibles .Intangibles are services like after sales service , delivery and installation schedules ,helping buyers purchase the product through a low cost customer needs and marketer’s creative strategy to feel it. This intangible component of the product along with the formal and core components is called augmented product. Levitt believes that future competition will be in the augmented product .The marketer keeps expanding the service component thus enhancing the product value .Not all customers for all products and under all circumstances can be attracted by this on-going process of value enhancement .They may prefer to buy a low priced product to an augmented product Some customers may not be able to use extra services offered by the marketer. Nonetheless, it is an irony in marketing that as customers get more enlightened about the product (through marketers teaching about the use of the product) the more vulnerable the marketer becomes to losing them .And this is precisely when the customer shops for a price. ”At this point, it makes sense to embark on a systematic programs of customer-benefiting and therefore ,customer –keeping ,product augmentation .The firm should also underrtake cost-reduction programs so that it can compete on the price front too. According to Levitt, augmented product is a condition of market maturity or of relatively experience or sophisticated customers.
The potential product consists of every6thing that might be done to attract and hold customers These offerings differ from one market to another because of varying economic and competitive conditions. The driving force in developing these offerings is the prime goal of any firm—retain competitive advantage Thus, product is the total concept that a customer buys, As competition intensifies ,markets open up, and as we improve our telecommunication and information network and there are more televisions in India families ,firms will have to re-examine their product concepts .For an important fact to be kept in mind is that these concepts keep changing as customers become more aware and sophisticated.