Chapter 6: Creating Offerings

by Jeff Tanner and Mary Anne Raymondby Jeff Tanner and Mary Anne Raymond
Principles of Marketing

Chapter 6Chapter 6
Creating OfferingsCreating Offerings
©2010 Flat World Knowledge, Inc.

©2010 Flat World Knowledge, Inc. 3
Learning Objectives
1.Distinguish between the three major components of
an offering: product, price, and service.
2.Explain, from both a product-dominant and a
service-dominant approach, the mix of components
that comprise different types of offerings.
3.Distinguish between product platforms and product
lines.
What Composes an Offering?What Composes an Offering?

• Products can be either a good, which is tangible,
or a service, which is intangible.
• Many products have attributes of a good and a
service.
• Products have features which are a characteristic
of the offering.
• Offerings have a price that is paid for the
product benefits.
• Total cost of ownership (TCO) is the amount paid
to own, use, and dispose of a product.
Products, Cost of OwnershipProducts, Cost of Ownership

• Service is an action that provides a buyer
with an intangible benefit.
– A haircut is an example of a service.
• Many tangible products have intangible service
components attached to them.
– A meal in a restaurant has both tangible
and intangible features.
ServiceService

The Product-Dominant Approach toThe Product-Dominant Approach to
MarketingMarketing

In addition to the offering itself,
marketers should consider what
services it takes for the customer
to acquire their offerings.
The Service-Dominant Approach toThe Service-Dominant Approach to
MarketingMarketing

• Technology platform is the core technology
on which a product is built.
• Some new offerings take a technology platform
and rebundle its benefits.
• Technology platforms are not limited to tangible
products.
• A product line is a group of related offerings.
Product Levels and Product LinesProduct Levels and Product Lines

• Line depth—the number of functionally related
products in a firm’s product line.
• Line extension—when a new similar product is
added to a line.
• Line breadth—distinct, product lines of a
company.
• Product mix—the entire assortment of products
that a firm offers.
Product Lines and MixesProduct Lines and Mixes

• Companies market offerings composed of a combination
of tangible and intangible characteristics for certain
prices.
• During the Industrial Revolution, firms focused
primarily on products.
• The service-dominant perspective to marketing
integrates three different dimensions of an offering.
• An offering is based on a technology platform.
• A product line is a group of similar offerings.
• A product line can be deep and/or broad.
• The entire assortment of products that a company offers
is called the product mix.
Key TakeawaysKey Takeaways

Types of Consumer OfferingsTypes of Consumer Offerings
Learning Objectives
1. Define the various types of offerings marketed
to individual consumers.
2. Explain why a single offering might be marketed
differently to different types of consumers.

Consumer Offerings FallConsumer Offerings Fall
into Four General Categoriesinto Four General Categories

• Convenience offerings, shopping offerings, specialty
offerings, and unsought offerings are the major types of
consumer offerings.
• Convenience offerings often include life’s necessities
(bread, milk, fuel, etc.), for which there is little difference
across brands.
• Shopping goods do vary, and many consumers develop
strong preferences for some brands versus others.
• Specialty goods are even more exclusive. Unsought
goods are a challenge for marketers because customers
do not want to have to shop for them until they need
them.

Learning Objectives
1. Define the various types of offerings marketed
to businesses.
2. Identify some of the differences with regard to
how the various types of business offerings are
marketed.
Types of Business-to-Business (B2B)Types of Business-to-Business (B2B)
OfferingsOfferings

• Capital equipment—equipment purchased and used
for more than one year.
• Raw materials—are materials firms offer other firms so
they can make a product or provide a service.
• OEM or components—raw materials, manufactured
materials, and component parts used to make a final
product.
• MRO or maintenance, repair, and operating—Janitorial
supplies or hardware used to repair equipment.
• Facilitating— includes products and services that
support a company’s operations but are not part of the
final product it sells such as supplies.
Primary Categories of B2B OfferingsPrimary Categories of B2B Offerings

• Business buyers purchase various types
of offerings to make their own offerings.
• Types of products they use are raw materials,
manufactured materials, and component parts
and assemblies.
• MRO (maintenance, repair, and operations)
offerings are those that keep a company’s
depreciable assets in working order.
• Facilitating offerings are products and services a
company purchases to support its operations but
are not part of the firm’s final product.©2010 Flat World Knowledge, Inc. 16

Learning Objectives
1. Understand the branding decisions firms make
when they’re developing new products.
2. Identify the various levels of packaging for new
products.
Branding, Labeling, and PackagingBranding, Labeling, and Packaging

• Branding—the set of activities designed to create
a brand and position it in the minds of
consumers.
• Brand name—the spoken part of a brand’s
identity.
• Brand mark—the symbol associated with a brand.
• Cannibalization—occurs when a firm’s new
offering eats into the sales of one of its older
offerings.
BrandingBranding

• Packaging has to fulfill a number of important
functions, including:
– communicating the brand and its benefits
– protecting the product from damage and
contamination during shipment, as well as damage
and tampering once it’s in retail outlets
– preventing leakage of the contents
– presenting government-required warning and
information labels
PackagingPackaging

• Primary packaging holds a single retail unit
of a product.
• Secondary packaging holds a single
wholesale unit of a product.
• Tertiary packaging is packaging designed
specifically for shipping and efficiently
handling large quantities.
Packaging UnitsPackaging Units

• A brand is a name, picture, design, symbol, or combination of them
that is used by a seller to identify its offerings and differentiate
them from competitors’ offerings.
• Branding is the set of activities designed to create a brand and
position it relative to competing brands in the minds of consumers.
• A brand extension involves utilizing an existing brand name or
brand mark for a new product or category (line) of products.
• Cannibalization occurs when a company’s new offering eats into the
sales of one of its older offerings.
• Packaging protects products from damage, contamination, leakage,
and tampering.
• Packaging is also used to communicate the brand and its benefits,
product warnings, and proper use.

Learning Objectives
1.Understand the people involved in
creating and managing offerings.
2.Recognize the differences in organizing
product marketing for consumers versus
B2B companies.
Managing the OfferingManaging the Offering

• Brand manager—the person responsible for all
business decisions regarding one brand.
• Product manager—someone with business
responsibility for a particular product or product
line.
• Category manager—has responsibility for business
decisions within a broad grouping of offerings.
• Market manager—is responsible for business
decisions within a market.
Product Management PositionsProduct Management Positions

• Brand managers decide what products are
to be marketed and how.
• Category managers are found in consumer
markets.
• Market managers can be found in both B2C
and B2B markets.
• In some companies, the vice president of
marketing or other executive is responsible
for the brands.

Chapter 6: Creating Offerings

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