1.

Product explanation
A product as anything that can be offered to a market for attention, acquisition,
use, or consumption that might satisfy a want or need. Products include more than
just tangible objects, such as cars, computers, or cell phones. Broadly defined,
“products” also include services, events, persons, places, organizations, ideas, or a
mixture of these.
Services are a form of product that consists of activities, benefits, or
satisfactions offered for sale that are essentially intangible and do not result in the
ownership of anything. Examples include banking, hotel services, airline travel,
retail, wireless communication, and homerepair services. We will look at services
more closely later in this chapter.
a. Products, Services, and Experiences
A company’s market offering often includes both tangible goods and
services. At one extreme, the market offer may consist of a pure tangible good,
such as soap, toothpaste, or salt; no services accompany the product. At the
other extreme are pure services, for which the market offer consists primarily
of a service. Examples include a doctor’s exam or financial services. Between
these two extremes, however, many goods-and-services combinations are
possible.
Today, as products and services become more commoditized, many
companies are moving to a new level in creating value for their customers. To
differentiate their offers, beyond simply making products and delivering
services, they are creating and managing customer experiences with their
brands or company.
b. Levels of Product and Services
Product planners need to think about products and services on three levels
Each level adds more customer value.
1. The most basic level is the core customer value, which addresses the
question What is the buyer really buying? When designing products,
marketers must first define the core, problem-solving benefits or
services that consumers seek.
 2. At the second level, product planners must turn the core benefit into an
actual product. They need to develop product and service features,
design, a quality level, a brand name, and packaging.
3. Finally, product planners must build an augmented product around the
core benefit and actual product by offering additional consumer services
and benefits.
c. Product Classifications
1. Consumer Product
a. Consumer Products
Products and services bought by final consumers for personal
consumption. Marketers usually classify these products and services
further based on how consumers go about buying them. Consumer
products include convenience products, shopping products, specialty
products, and unsought products.
b. Convenience products are consumer products and services that
customers usuall buy frequently, immediately, and with minimal
comparison and buying effort.
c. Shopping products are less frequently purchased consumer products
and services that customers compare carefully on suitability, quality,
price, and style. When buying shopping products and services,
consumers spend much time and effort in gathering information and
making comparisons.
d. Specialty products are consumer products and services with unique
characteristics or brand identification for which a significant group of
buyers is willing to make a special pur chase effort. Examples include
specific brands of cars, high-priced photographic equipment, designer
clothes, and the services of medical or legal specialists.
e. Unsought products are consumer products that the consumer either
does not know about or knows about but does not normally consider
buying. Most major new innovations are unsought until the consumer
becomes aware of them through advertising.
2. 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
purchased.
a. Industrial Products
1. 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).
2. 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).
3. 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.
b. Organization, Persons, Places, and Ideas
1. 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.
2. 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 organization use
well-known personalities to help sell their products or causes.
3. 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 offices and factories.
4. Ideas can also be marketed. In one sense, all marketing is the
marketing of an idea, This area has been called social marketing,
defined by the Social Marketing Institute (SMI) as the use of
commercial marketing concepts and tools in programs designed to
bring about social change. Social marketing programs include public
health campaigns to reduce smoking, drug abuse, and obesity. Other
social marketing efforts include environmental campaigns to
promote wilderness protection, clean air, and conservation.

2. Product and Service Decisions

a. Individual Product and Service Decisions
1. Product and Service Attributes
Developing a product or service involves defining the benefits that it
will offer. These benefits Are communicated and delivered by product
attributes such as quality, features, and style and design.
a. Product Quality is one of the marketer’s major positioning tools.
Quality has a direct impact on product or service performance; thus,
 it is closely linked to customer value and satisfaction. Total quality
management (TQM) is an approach in which all of the company’s
people are involved in constantly improving the quality of products,
services, and business processes. For most top companies, customer-
driven quality has become a way of doing business. Today,
companies are taking a “return on quality” approach, viewing quality
as an investment and holding quality efforts accountable for bottom-
line results.
Product quality has two dimensions: level and consistency.
1. In developing a product, the marketer must first choose a quality
level that will support the product’s positioning. Here, product
quality means performance quality—the ability of a product to
perform its functions.
2. High quality also can mean high levels of quality consistency.
Here, product quality means conformance quality—freedom from
defects and consistency in delivering a targeted level of
performance. All companies should strive for high levels of
conformance quality.
b. Product Features. A product can be offered with varying features. A
stripped-down model, one without any extras, is the starting point.
The company can create higher-level models by adding more
features. Features are a competitive tool for differentiating the
company’s product from competitors’ products. Being the first
producer to introduce a valued new feature is one of the most
effective ways to compete.
c. Product Style and Design. Another way to add customer value is
through distinctive product style and design. Design is a larger
concept than style. Style simply describes the appearance of a
product. Styles can be eye catching or yawn producing A sensational
style may grab attention and produce pleasing aesthetics, but it does
not necessarily make the product perform better. Unlike style, design
 is more than skin deep—it goes to the very heart of a product. Good
design contributes to a product’s usefulness as well as to its looks.
2. Branding
Perhaps the most distinctive skill of professional marketers is their ability
to build and manage brands. A Brand is a name, term, sign, symbol, or
design, or a combination of these, that identifies the maker or seller of a
product or service. Consumers view a brand as an important part of a
product, and branding can add value to a product. Customers attach
meanings to brands and develop brand relationships. Brands have
meaning well beyond a product’s physical attributes.
Branding helps buyers in many ways:
1. Brand names help consumers identify products that might benefit
them.
2. Brands also say something about product quality and consistency.
3. The brand name becomes the basis on which a whole story can be
built about A product’s special qualities.
4. The seller’s brand name and trademark provide legal protection for
unique product features that otherwise might be copied by
competitors.
5. Branding helps the seller to segment markets.

3. Packaging
Traditionally, the primary function of the package was to hold and
protect the product. In recent times, however, packaging has become an
important marketing tool as well. Increased competition and clutter on
retail store shelves means that packages must now perform many sales
tasks—from attracting buyers, to communicating brand positioning, to
closing the sale. Not every customer will see a brand’s advertising, social
media pages, or other promotions. However, all consumers who buy and
use a product will interact regularly with its packaging. Thus, the humble
package represents prime marketing space.
 There are some issues that company should be thinking when they decide
their product’s packaging. First, poorly designed packages can cause
headaches for consumers and lost sales for the company. Second,
overpackaging creates an incredible amount of waste, frustrating those
who care about the environment. It comes down to the third issue about
environment. Many companies have gone “green” by reducing their
packaging and using environmentally responsible packaging materials.
Innovative packaging can give a company an advantage over competitors
and boost sales.
For example, PUMA came up with what they call the Clever Little Bag
with a big impact. The new container—which consists of a light
cardboard insert that slides seamlessly into a colorful, reusable red bag—
uses 65 percent less paper to make and reduces water, energy, and fuel
consumption during manufacturing by more than 60 percent a year.
Because it takes up less space and weight, the new container also reduces
carbon emissions during shipping by 10,000 tons a year. In all, PUMA’s
Clever Little Bag is more than just friendly to the environment, it’s also
very friendly to consumers’ likes and the company’s bottom line.
Another example is Amazon’s initiative to alleviate both wrap rage and
overpackaging with their Frustration-Free Packaging. It is smaller, easy-
to-open, recyclable packages that use less packaging material and no
frustrating plastic clamshells or wire ties. In the process, the initiative has
eliminated nearly 60 million square feet of cardboard and 25 million
pounds of packaging waste.
4. Labelling
Labels consist of required information about product/service. It can
identifies the product or brand. The label might also describe several
things about the product—who made it, where it was made, when it was
made, its contents, how it is to be used, and how to use it safely. The
label might also help to promote the brand, support its positioning, and
lastly connect with customers. For many companies, labels have become
an important element in broader marketing campaigns. Labels and brand
 logos can support the brand’s positioning and add personality to the
brand. In fact, brand labels and logos can become a crucial element in the
brand–customer connection. Customers often become strongly attached
to logos as symbols of the brands they represent.
For example Gojek, has changed their logo from “ojek” which represents
by its motorcycle and driver to this new logo called “Solv” which they
took from word “Solve”. This new logo represents the ecosystem of all
services that Gojek offers to their customers. As the time goes by, Gojek
has widen their service area, not just motor bike/ transportation services,
but also food delivery, logistic, digital payment, and merchant. This new
logo also represents the button that solves all problems,as it goes with
Gojek’s slogan #PastiAdaJalan.
5. Product Support Service
Customer service is another element of product strategy. A company’s
offer usually includes some support services, which can be a minor part
or a major part of the total offering. Good marketing doesn’t stop with
making the sale. Keeping customers happy after the sale is the key to
building lasting relationships. First step is to Survey customers
periodically to know and control the customers satisfaction. After that we
could assess the value of current service adm fix problems within our
recent products/ service and add something new.

b. Product Line Decision

A product line is a group of products that are closely related because they
function in a similar manner, are sold to the same customer groups, are
marketed through the same types of outlets, or fall within given price ranges. A
company can expand its product line in two ways: by line filling or line
stretching. Product line filling involves adding more items within the present
range of the line range. The company can stretch its line downward, upward, or
both ways. Companies located at the upper end of the market can stretch their
lines downward. A company may stretch downward to plug a market hole that
otherwise would attract a new competitor or to respond to a competitor’s attack
on the upper end. Or it may add low-end products because it finds faster
growth taking place in the low-end segments. Companies can also stretch their
product lines upward. Sometimes, companies stretch upward to add prestige to
their current products. Or they may be attracted by a faster growth rate or
higher margins at the higher end.
For example is what Samsung did with their Galaxy series. They had many
type of Galaxy series based on their type. So they dis the Product Line filling
with Samsung Galaxy Series s10, s10 plus, s9, etc to offer different kins of
specification. Whether it focuses on the camera quality, or the memory, etc.
and they did the stretch with other lines within galaxy series such as galaxy
series type A, that offer cheaper price for the almost same specification as s
type.

c. Product Mix Decision

A product mix (or product portfolio) consists of all the product lines and
items that a particular seller offers for sale. A company’s product mix has four
important dimensions: width, length, depth, and consistency. Product mix
width refers to the number of different product lines the company carries.
Product mix length refers to the total number of items a company carries within
its product lines. Product mix depth refers to the number of versions offered for
each product in the line. Finally, the consistency of the product mix refers to
how closely related the various product lines are in end use, production
requirements, distribution channels, or some other aspect.
These product mix dimensions provide the handles for defining the
company’s product strategy. A company can increase its business in four ways.
It can add new product lines, widening its product mix. In this way, its new
lines build on the company’s reputation in its other lines. A company can
lengthen its existing product lines to become a more full-line company. It can
add more versions of each product and thus deepen its product mix. Finally, a
company can pursue more product line consistency—or less—depending on
whether it wants to have a strong reputation in a single field or in several fields.
3. Services Marketing
a. The Nature and Characteristic of Service
1. Intangibilty.
Service intangibility means that services cannot be seen, tasted, felt,
heard, or smelled before they are bought. For example, people
undergoing cosmetic surgery cannot see the result before the purchase.
Airline passengers have nothing but a ticket and a promise that they and
their luggage will arrive safely at the intended destination, hopefully at
the same time. To reduce uncertainty, buyers look for signals of service
quality. They draw conclusions about quality from the place, people,
price, equipment, and communications that they can see.
2. Inseparability.
Service inseparability means that services cannot be separated from their
providers, whether the providers are people or machines. If a service
employee provides the service, then the employee becomes a part of the
service. And customers don’t just buy and use a service, they play an
active role in its delivery. Customer coproduction makes provider–
customer interaction a special feature of services marketing. Both the
provider and the customer affect the service outcome.
3. Variability.
Service variability means that the quality of services depends on who
provides them as well as when, where, and how they are provided. For
example, Indomaret has their standard operation procedure to greet
customers but the approachment for one branch and another is different.
4. Perishability. Service perishability means that services cannot be stored
for later sale or use. Some doctors charge patients for missed
appointments because the service value existed only at that point and
disappeared when the patient did not show up. The perishability of
services is not a problem when demand is steady. However, when
demand fluctuates, service firms often have difficult problems. For
example, because of rush-hour demand, public transportation companies
have to own much more equipment than they would if demand were even
 throughout the day. Thus, service firms often design strategies for
producing a better match between demand and supply.

4. Marketing Strategies for Service Firms

Just like manufacturing businesses, good service firms use marketing to
position themselves strongly in chosen target markets. Some firms establish their
attention through traditional marketing mix activities.
a. The Service Profit Chain
In a service business, the customer and the front-line service employee
interact to co-create the service. Effective interaction, in turn, depends on the
skills of the front-line service employees and on the support processes backing
these employees. Thus, successful service companies focus their attention on
both their customers and their employees. They understand the service profit
chain which links service firm profits with employee and customer satisfaction.
This chain consists of five links :
1. Internal service quality, superior employee selection and training, a
quality work environment and strong support for those dealing with
customer which results in…
2. Satisfied and productive service employees, more satisfied, loyal and
more hardworking employees which results in…
3. Greater service value, more effective and efficient customer value
creation and service delivery which results in…
4. Satisfied and loyal customers, satisfied customers who remain loyal,
make repeat purchases, and refer other customers which results in…
5. Healthy service profits and growth, superior service firm performance
Service marketing requires more than just traditional external marketing,
service marketing also requires internal marketing and interactive marketing.
Internal marketing means that the service firm orient and motive its customer-
contact employees and supporting service people to work as a team to provide
customer satisfaction. Interactive marketing means that service quality
depends heavily on the quality of the buyer-seller interaction during the
service encounter. In product marketing, product quality often depends little
 on how the product is obtained. But in service marketing, service quality
depends on both the service deliverer and the quality of delivery. Service
marketers therefore, have to master interactive marketing skills.

b. Managing Service Differentiation

In these days of intense price competition, service marketers often complain
about the difficulty of differentiating their services from those of competitors.
To extent that customers view the service of different providers as similar, they
care less about the provider than the price. The solution to price competition is
to develop a differentiated offer, deliver and image.
The offer can include innovative features that set one company's offer apart
from competitor's offers. Service companies can differentiate their service
delivery by having more able and reliable customer-contact people, developing
a superior physical environment in which the service product is delivered or
designing a superior delivery process. Finally, service companies can also work
on differentiating their images through symbols and branding.

c. Managing Service Quality

A service firm can differentiate itself by delivering consistently higher
quality that its competitors provide. Like manufacturers before them, most
service industries have now joined the customer-driven quality movement and
like product marketers, service providers need to identify what target
customers expect in regard to service quality.
Unfortunately, service quality is harder to define and judge than product
quality/ Top service companies set high service-quality standards. They watch
service performance closely, both their own and that of competitors. Unlike
product manufacturers who can adjust their machinery and inputs until
everything is perfect, service quality will always vary, depending on the
interactions between employees and customers. Good service recovery can turn
angry customers into loyal ones. In fact, good recovery can win more
customers purchasing and loyalty than if things had gone well in the first place.
d. Managing Service Productivity
With their costs rising rapidly, service firms are under great pressure to
increase service productivity. They can do so in several ways. They can train
current employees better or hire new ones who will work harder or more
skillfully or they can increase the quantity of their service by giving some
quality. Finally a service provider can harness the power of technology.
Although we often think of technology's power to save time and costs, it also
has great potential to make service workers more productive.
However companies must avoid pushing productivity so hard that doing so
reduces quality. Attempts to streamline a service or cut costs can make a
service company more efficient in the short run. But that can also reduce its
longer-run ability to innovate, maintain service quality or respond to consumer
needs and desires.
Thus, in attempting to improve service productivity, companies must be
mindful of how they create and deliver customer value. They should be careful
not to take service out of the service. In fact, a company may purposely lower
service productivity in order to improve service quality, in turn allowing it to
maintain higher prices and profit margins.
 REFERENCES

Armstrong, Gary and Philip Kotler. 2016. Principle of Marketing Sixteenth

Edition. Edinburgh:Pearson Education