TECHNOPRENEURSHIP

The Difference Between PRODUCT and SERVICES :

PRODUCT

• tangible object used either once or repeatedly.
• ownership of the product is transferable from sellers to buyers.
• it is homogeneous, once produced the quality is uniform across all line of products.
• will have a long storage life and are mostly non perishable.
• you can count products in the same way as you can count your money.
• produced by a manufacturing process.
• things - commodities.

SERVICES

• service is intangible
• there is no ownership involved
• is not countable, but is "leveled;" better than the best service is not possible.
  
• There is a limit in what a service can offer.
  
• is offered by the utility element of companies; you subscribe to a service in the same way as you subscribe to your gas and electricity supplier.

Kind of Products and Services:
KINDS OF PRODUCTS:

a.       Convenience Products - are products that appeal to a very large market segment. They are generally consumed regularly and purchased frequently with a minimum of comparison and buying effort. Examples include most household items such as food, cleaning products, and personal care products.

Classified further into 3 types:

1.       Staple Convenience – basic goods (e.g. milk))

2.       Impulse Convenience – bought without prior thought (e.g. sweets, crisps)

b.      Shopping Products  - consumer goods that the customer, in the process of selection and purchase, characteristically compare different products or brands in terms of suitability, quality, price and style.

-    products consumers purchase and consume on a less frequent schedule compared to convenience products. Examples include many clothing products, personal services, electronic products, and household furnishings.

c.       Specialty Products  - consumer goods with unique characteristics or brand identification for which a significant group of buyers is willing to make a special effort to purchase. . Examples include high-end luxury automobiles, expensive champagne, and celebrity hair care experts.

In addition to the three main categories above, products are classified in at least two additional ways:

d.      Emergency Products         - are products a customer seeks due to sudden events and for which pre-purchase planning is not considered. Often the decision is one of convenience (e.g., whatever works to fix a problem) or personal fulfillment (e.g., perceived to improve purchaser’s image).

e.       Unsought Products – These are products whose purchase is unplanned by the consumer but occur as a result of marketer’s actions. Such purchase decisions are made when the customer is exposed to promotional activity, such as a salesperson’s persuasion or purchase incentives like special discounts offered to certain online shoppers. These promotional activities often lead customers to engage in Impulse Purchasing.

 KINDS OF SERVICES:
Services can be classified based on the:

a.       Nature of the service providing process

Service providing services can be divided based on the complexity and rate of tailoring. Complexity means the number of successive steps that need to be taken and the rate of tailoring means the rate at which specific client needs are fulfilled.

1.      Simple Standard (e.g. gas station)

2.      Complex Standard (e.g. company security)

3.      Simple Tailored (e.g. babysit service)

4.      Complex Tailored (e.g. software development)

b.      Subject of the service

Services can generally be used to elicit changes in the condition of people, possession or information.

1.      People Processing - the client has to be physically present (e.g. public transportation)

2.      Possession Processing - one of the client’s possession is the subject of the service (e.g. cleaning service)

3.      Information Processing - the fastest growing service type and the most immaterial one (e.g. consultancy)

c.       Nature and function of the service

1.      Knowledge and Skill Services –most often offered by specialists (e.g. consultancy or surgery )

2.      Outsourced Services – takes over certain services that the client could have done himself, but for economical, technical or emotional reasons these tasks are not performed by the client (e.g. maintenance)

3.      Facilitating Services – mainly make a facility available, mostly at large scale (e.g. recording studios)

d.      Company Class

1.      Tourist and Recreational Services – aimed at the spare time of potential clients, are people oriented and relatively immaterial (e.g. hotels, restaurants and bars)

2.      Personal Services – specifically aimed at the caring for people (e.g. hairdressers and beauty institutes)

3.       Maintenance Services – relatively strongly focused on objects and companies and fairly material (e.g. cleaning services)

4.      Delivering services – mainly focused on  the companies (e.g. insurance companies)

5.      Distributive Services – complete the function of transporting and distributing goods, people and information (e.g. all transport services and communication companies)

What is a Product Mix ?

is a combination of products manufactured or traded by the same business house to reinforce their presence in the market, increase market share and increase the turnover for more profitability. Normally the product mix is within the synergy of other products for a medium size organization. However large groups of Industries may have diversified products within core competency. 

generally defined as the total composite of products offered by a particular organization, consists of both product lines and individual products. A product line is a group of products within the product mix that are closely related, either 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 product is a distinct unit within the product line that is distinguishable by size, price, appearance, or some other attribute. For example, all the courses a university offers constitute its product mix; courses in the marketing department constitute a product line; and the basic marketing course is a product item. Product decisions at these three levels are generally of two types: those that involve width (variety) and depth (assortment) of the product line and those that involve changes in the product mix occur over time.

What is Market Positioning? 

has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand or organization.

Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market.

De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market.

 A perceptual location. It's where your product or service fits into the marketplace. Effective positioning puts you first in line in the minds of potential customers.

As individuals, we continually position ourselves. The responsible older sibling, the class clown, a number cruncher, a super genius are all examples of positioning. These identifiers help us define ourselves and distinguish our abilities as unique and different from other people.
Positioning is a powerful tool that allows you to create an image. And image is the outward representation of being who you want to be, doing what you want to do, and having what you want to have. Positioning yourself can lead to personal fulfillment. Being positioned by someone else restricts your choices and limits your opportunities.
That's why it's so important for entrepreneurs to transform their passion into a market position. If you don't define your product or service, a competitor will do it for you. Your position in the market place evolves from the defining characteristics of your product. The primary elements of positioning are:

• Pricing. Is your product a luxury item, somewhere in the middle, or cheap, cheap, cheap.
• Quality. Total quality is a much used and abused phrase. But is your product well produced? What controls are in place to assure consistency? Do you back your quality claim with customer-friendly guarantees, warranties, and return policies?
• Service. Do you offer the added value of customer service and support? Is your product customized and personalized?
• Distribution. How do customers obtain your product? The channel or distribution is part of positioning.
• Packaging. Packaging makes a strong statement. Make sure it's delivering the message you intend.

Positioning is your competitive strategy. What's the one thing you do best? What's unique about your product or service? Identify your strongest strength and use it to position your product.

What are the different Product Components ?

On the surface it seems a product is simply a marketing offering, whether tangible or intangible, that someone wants to purchase and consume. In which case one might believe product decisions are focused exclusively on designing and building the consumable elements of goods, services or ideas. For instance, one might think the key product decision for a manufacturer of floor cleaners is to focus on creating a formula that cleans more effectively. In actuality, while decisions related to the consumable parts of the product are extremely important, the Total Product consists of more than what is consumed. The total product offering and the decisions facing the marketer can be broken down into three key parts:

1. Core Benefits
2. Actual Product
3. Augmented Product

CORE BENEFITS

Consider what we have talked about many times in this tutorial; people make buying decisions that satisfy their needs. While many needs are addressed by the consumption of a product or service, some needs are not. For instance, customers may need to be perceived highly by other members of their group or need a product that is easy to use or need a risk-free purchase. In each of these cases, and many more, the core product itself is the benefit the customer receives from using the product.

In some cases these core benefits are offered by the product itself (e.g., floor cleaner) while in other cases the benefit is offered by other aspects of the product (e.g., the can containing the floor cleaner that makes it easier to spread the product). Consequently, at the very heart of all product decisions is determining the key or core benefits a product will provide. From this decision, the rest of the product offering can be developed. 

ACTUAL PRODUCT

 The core benefits are offered through the components that make up the actual product the customer purchases. For instance, when a consumer returns home from shopping at the grocery store and takes a purchased item out of her shopping bag, the actual product is the item she holds in her hand.

Within the actual product is the consumable product, which can be viewed as the main good, service or idea the customer is buying. For example, while toothpaste may come in a package that makes dispensing it easy, the Consumable Product is the paste that is placed on a toothbrush. But marketers must understand that while the consumable product is, in most cases, the most critical of all product decisions, the actual product includes many separate product decisions including product features, branding, packaging, labeling, and more. Full coverage of several of these important areas is provided later in this tutorial.

AUGMENTED PRODUCT

Marketers often surround their actual products with goods and services that provide additional value to the customer’s purchase. While these factors may not be key reasons leading customers to purchase (i.e., not core benefits), for some the inclusion of these items strengthens the purchase decision while for others failure to include these may cause the customer not to buy. Items considered part of the augmented product include:

• Guarantee – This provides a level of assurance that the product will perform up to expectations and if not the company marketing the product will support the customer’s decision to replace, have it repaired or return for a refund.
• Warranty – This offers customers a level of protection that often extends past the guarantee period to cover repair or replacement of certain product components.
• Customer Service – This consists of additional services that support the customer’s needs including offering training and assistance via telephone or online.
• Complementary Products – The value of some product purchases can be enhanced with add-on products, such as items that make the main product easier to use (e.g., laptop carrybag), enhance styling (e.g., cellphone face plates) or extend functionality (e.g., portable keyboard for PDAs).
• Accessibility – How customers obtain the product can affect its perceived value depending on such considerations as how easy it is to obtain (e.g., stocked at nearby store, delivered directly to office), the speed at which it can be obtained, and the likelihood it will be available when needed.