Product and Service Strategy
Product and service strategy covers what a firm offers, how the offer is classified and managed over its life, and why services need additional marketing tools. CLEP questions test product levels, the product mix, the product life cycle, branding, and the service characteristics.
Product levels and classification
- Core benefit, actual product (features, design, quality, brand, packaging), and augmented product (warranty, delivery, installation, support).
- Consumer goods: convenience (frequent, low effort), shopping (compare on price/quality), specialty (strong preference, little comparison), unsought (unknown or not normally considered).
- Durable goods last; nondurables are consumed quickly.
Product mix and life cycle
- Width = number of product lines; length = total items; depth = versions within a line; consistency = how closely lines relate.
- Line filling adds items within the current range; line stretching moves up, down, or both.
- PLC: introduction (build awareness, trial), growth (expand distribution, differentiate), maturity (defend share, emphasize brand and promotion), decline (harvest, divest, or reposition).
- Branding builds brand equity; line extensions use an existing brand in a new item in the same category, brand extensions enter a new category.
Services
- Intangibility, inseparability, variability, perishability.
- Address them with physical evidence, employee training, standardized processes, and capacity management.
- Service quality gaps arise between customer expectations and management perception, service design, delivery, and communication.
Worked example
A meal-kit company sells a bundle of food and service. Perishability means it must forecast demand and manage inventory tightly; variability means standardized recipes and kitchen training; intangibility means free trials, reviews, and photos; inseparability means the customer participates in cooking. In maturity, it differentiates through dietary options and retention rather than adding every possible cuisine. Reasoning: service characteristics drive operating choices, and PLC stage drives marketing emphasis.
Traps that cost marks
- Equating convenience goods with impulse goods.
- Mixing up line filling and line stretching.
- Assuming every product follows the PLC in the same shape.
- Treating services as tangible products with a label.
- Forgetting that augmented product can be the main differentiator.