Gateways Institute of Science and Technology

HOW TO USE THIS LEARNER’S MANUAL

1. Answer the diagnostic test before you proceed to the different activities. The diagnostic test
determines how much you know about the lessons and identifies the areas you ought to learn.
Your teacher will check and analyze your score to determine your learning needs;
2. This module contains relevant information and activities. Go over each activity carefully. If you
encounter difficulties, do not hesitate to consult your teacher for assistance through your group
messaging;
3. Do not skip any lesson. REMEMBER that each activity is a preparation for the succeeding
activities;
4. Perform the given activities, quizzes and assignments to enrich your knowledge and skills;
5. Write all your answers on a separate sheet of paper;
6. After successfully finishing the tasks, PLEASE RETURN this
module with your answers to the quizzes and tasks given for
checking;

7. Your score will be analyzed and will be used by your teacher

for the computation of your grades;
8. Lastly, DO NOT mark this MODULE in any way.

PRINCIPLES OF MARKETING – GRADE 11 ABM

3rd Quarter

Week 9
I. OBJECTIVES (Specific Objectives)

At the end of the lesson, the learner should be able to:

1. Define a product;
2. Differentiate products as goods, services, or experiences; and
3. Identify the types of consumer products.

II. CONTENTS

A. Motivation

B. Lesson Proper

In marketing, a product is an object or system made available for consumer use; it is

anything that can be offered to a market to satisfy the desire or need of a customer.[1] In
retailing, products are often referred to as merchandise, and in manufacturing, products are
bought as raw materials and then sold as finished goods. A service is also regarded to as a
type of product.

Commodities are usually raw materials such as metals and agricultural products, but a
commodity can also be anything widely available in the open market. In project
management, products are the formal definition of the project deliverables that make up or
contribute to delivering the objectives of the project.

C. Discussion

A product is “anything that can be offered to market for attention, acquisition, use, or
consumption that might satisfy a want or need”

Developed by: Gateways Institute of Science and Technology

Subject: Principles of Marketing – Grade 11 ABM
Quarter & Week #: 3rd Quarter – Week 9
 Goods, Services, or Ideas

Goods are physical products capable of being delivered to a purchaser and involve the
transfer of ownership from seller to customer.

A service is a non-material action resulting in a measurable change of state for the

purchaser caused by the provider.

Characteristics of Services

1. Perishability - Service is highly perishable and time element has great significance in
service marketing. Service if not used in time is lost forever. Service cannot store.

2. Intangibility - Unlike product, service cannot be touched or sensed, tested or felt before
they are availed. A service is an abstract phenomenon.

3. Inseparability - Personal service cannot be separated from the individual and some
personalized services are created and consumed simultaneously.

4. Heterogeneity - The features of service by a provider cannot be uniform or

standardized. A Doctor can charge much higher fee to a rich client and take much low
from a poor patient.

Ideas (intellectual property) are any creation of the intellect that has commercial value, but
is sold or traded only as an idea, and not as a resulting service or good. This includes
copyrighted property such as literary or artistic works, and ideational property, such as
patents, appellations of origin, business methods, and industrial processes.

Five Product Levels

1. Core Product
This is the basic product and the focus is on the purpose for which the product is intended.

Developed by: Gateways Institute of Science and Technology

Subject: Principles of Marketing – Grade 11 ABM
Quarter & Week #: 3rd Quarter – Week 9
 For example, a warm coat will protect you from the cold and the rain. The more important
benefits the product provides, the more that customers need the product. A key element is
the uniqueness of the core product. This will benefit the product positioning within a market
and effect the possible competition.

2. Generic Product
This represents all the qualities of the product. For a warm coat this is about fit, material,
rain repellent ability, high-quality fasteners, etc.

3. Expected Product
This is about all aspects the consumer expects to get when they purchase a product. That
coat should be really warm and protect from the weather and the wind and be comfortable
when riding a bicycle.

4. Augmented Product
The Augmented Product refers to all additional factors which sets the product apart from
that of the competition. And this particularly involves brand identity and image. Is that
warm coat in style, its colour trendy and made by a well-known fashion brand? But also
factors like service, warranty and good value for money play a major role in this. The goal is
to deliver something that is beyond an expected product. It’s the translation of the desire
that is converted into reality.

5. Potential Product
This is about augmentations and transformations that the product may undergo in the
future. For example, a warm coat that is made of a fabric that is as thin as paper and
therefore light as a feather that allows rain to automatically slide down.

4 Types of Consumer Products

Firstly, what specifically is a consumer product? A consumer product is a product bought by
final consumers for personal consumption. But not every consumer product is the same.
There are four different types of consumer products. Marketers usually classify consumer
products into these 4 types of consumer products:

Convenience products Specialty products

Shopping products Unsought products

These 4 types of consumer products all have different characteristics and involve a different
consumer purchasing behaviour. Thus, the types of consumer products differ in the way
consumers buy them and, for that reason, in the way they should be marketed.

Convenience products
Among the four types of consumer products, the convenience product is bought most
frequently. A convenience product is a consumer product or service that customers
normally buy frequently, immediately and without great comparison or buying effort.

Developed by: Gateways Institute of Science and Technology

Subject: Principles of Marketing – Grade 11 ABM
Quarter & Week #: 3rd Quarter – Week 9
 Examples include articles such as laundry detergents, fast food, sugar and magazines. As you
can see, convenience products are those types of consumer products that are usually low-
priced and placed in many locations to make them readily available when consumers need
or want them.

Shopping products
The second one of the 4 types of consumer products is the shopping product. Shopping
products are consumer products that the customer usually compares on attributes such as
quality, price and style in the process of selecting and purchasing. Thus, a difference
between the two types of consumer products presented so far is that the shopping product
is usually less frequently purchased and more carefully compared. Therefore, consumers
spend much more time and effort in gathering information and comparing alternatives.

Types of consumer products that fall within the category of shopping products are:
furniture, clothing, used cars, airline services etc. As a matter of fact marketers usually
distribute these types of consumer products through fewer outlets, but provide deeper
sales support in order to help customers in the comparison effort.

Specialty products
Number three of the types of consumer products is the specialty product. Specialty products
are consumer products and services with unique characteristics or brand identification for
which a significant group of consumers is willing to make a special purchase effort. As you
can see, the types of consumer products involve different levels of effort in the purchasing
process: the specialty product requires a special purchase effort, but applies only to certain
consumers.

Production decisions
In decisions on producing or providing products and services in the international market it is
essential that the production of the product or service is well planned and coordinated, both
within and with other functional area of the firm, particularly marketing. For example, in
horticulture, it is essential that any supplier or any of his "out grower" (sub-contractor) can
supply what he says he can. This is especially vital when contracts for supply are finalized, as
failure to supply could incur large penalties. The main elements to consider are the
production process itself, specifications, culture, the physical product, packaging, labeling,
branding, warranty and service.

Production process
The key question is, can we ensure continuity of supply? In manufactured products this may
include decisions on the type of manufacturing process - artisanal, job, batch, flow line or
group technology. However in many agricultural commodities factors like seasonality,
perishability and supply and demand have to be taken into consideration. Table 8.1 gives a
checklist of questions on product requirements for horticultural products as an example6

Developed by: Gateways Institute of Science and Technology

Subject: Principles of Marketing – Grade 11 ABM
Quarter & Week #: 3rd Quarter – Week 9
 Specification
Specification is very important in agricultural products. Some markets will not take produce
unless it is within their specification. Specifications are often set by the customer, but
agents, standard authorities (like the EU or ITC Geneva) and trade associations can be useful
sources. Quality requirements often vary considerably. In the Middle East, red apples are
preferred over green apples. In one example French red apples, well boxed, are sold at 55
dinars per box, whilst not so attractive Iranian greens are sold for 28 dinars per box. In
export the quality standards are set by the importer. In Africa, Maritim (1991)2, found,
generally, that there are no consistent standards for product quality and grading, making it
difficult to do international trade regionally.

Culture
Product packaging, labeling, physical characteristics and marketing have to adapt to the
cultural requirements when necessary. Religion, values, aesthetics, language and material
culture all affect production decisions. Effects of culture on production decisions have been
dealt with already in chapter three.

Physical product
The physical product is made up of a variety of elements. These elements include the
physical product and the subjective image of the product. Consumers are looking for
benefits and these must be conveyed in the total product package. Physical characteristics
include range, shape, size, color, quality, quantity and compatibility. Subjective attributes
are determined by advertising, self-image, labelling and packaging. In manufacturing or
selling produce, cognizance has to be taken of cost and country legal requirements.
Again a number of these characteristics is governed by the customer or agent. For example,
in beef products sold to the EU there are very strict quality requirements to be observed. In
fish products, the Japanese demand more "exotic" types than, say, would be sold in the UK.
None of the dried fish products produced by the Zambians on Lake Kariba, and sold into the
Lusaka market, would ever pass the hygiene laws if sold internationally. In sophisticated
markets like seeds, the variety and range is so large that constant watch has to be kept on
the new strains and varieties in order to be competitive.

Packaging

Packaging serves many purposes. It protects the product from damage which could be
incurred in handling and transportation and also has a promotional aspect. It can be very
expensive. Size, unit type, weight and volume are very important in packaging. For aircraft
cargo the package needs to be light but strong, for sea cargo containers are often the best
form. The customer may also decide the best form of packaging. In horticultural produce,
the developed countries often demand blister packs for mange touts, beans, strawberries
and so on, whilst for products like pineapples a sea container may suffice. Costs of
packaging have always to be weighed against the advantage gained by it.
Increasingly, environmental aspects are coming into play. Packaging which is non-
degradable - plastic, for example - is less in demanded. Bio-degradable, recyclable, reusable

Developed by: Gateways Institute of Science and Technology

Subject: Principles of Marketing – Grade 11 ABM
Quarter & Week #: 3rd Quarter – Week 9
 packaging is now the order of the day. This can be both expensive and demanding for many
developing countries.

Labelling

Labelling not only serves to express the contents of the product, but may be promotional
(symbols for example Cashel Valley Zimbabwe; HJ Heinz, Africafe, Tanzania). The EU is now
putting very stringent regulations in force on labelling, even to the degree that the
pesticides and insecticides used on horticultural produce have to be listed. This could be
very demanding for producers, especially small scale, ones where production techniques
may not be standardized. Government labelling regulations vary from country to country.
Bar codes are not widespread in Africa, but do assist in stock control. Labels may have to be
multilingual, especially if the product is a world brand. Translation could be a problem with
many words being translated with difficulty. Again labelling is expensive, and in promotion
terms non-standard labels are more expensive than standard ones. Requirements for crate
labelling, etc. for international transportation will be dealt with later under documentation.

D. Activity

Direction: List down 10 examples of goods and 10 examples of services.

E. Quiz

Direction: Start to think your own product by answering the following questions.

a. What is the name of your product?

b. What type of product is that?
c. Identify the levels of your product.
Core benefit –
Generic product –
Expected product –
Augmented product -
Potential product –

d. Draw the branding of your product (computerized or manually made output).

e. Make a labelling of your product (computerized or manually made output).

Developed by: Gateways Institute of Science and Technology

Subject: Principles of Marketing – Grade 11 ABM
Quarter & Week #: 3rd Quarter – Week 9