Developing+Products+and+Services

===Our study will now focus on the marketing of products and services. The marketing mix is a business tool used in the marketing of products and services. The //Marketing Mix//, also known as the 4 P's of Marketing, is the combination of product, price, place (distribution), and promotion. ===



===The marketing mix concept is simple. Think about another common mix - a cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar! It is the same with the marketing mix. The mix can be altered by varying the elements.===

**__ DEVELOPING PRODUCTS AND SERVICES __**
===If you are planning to establish an e-commerce business, one of the first questions you must answer is, "Why will customers want to purchase from my business?" In the first years of e-commerce, innovators likely purchased products from an Internet business because of the novelty or convenience. Those reasons are not enough to keep customers returning to a business again and again. The primary reason people purchase from a business is directly related to its products. If a business does not offer products that meet market needs, there will be no reason for customers to purchase from or even visit the business.===

===To maintain long-term, satisfying relationships with customers, a business must provide a distinct value. A value is a business offering that is unique and superior in important ways from similar offerings of other businesses. A value is composed of all elements of the marketing mix. Value begins with the product or service offered by the business.===

** The Components of a Product **
===The product is one of the four components of the marketing mix. A product is all of the tangible and intangible attributes that customers receive when they make a purchase. Most businesses offer products for which there are many substitutes. Competing companies offer the same basic product. If the basic product were all that customers could purchase, it would be difficult to differentiate one company's product from another. Each business provides enhancements to a basic product to make it different from competitors' products and more appealing to customers. Unique elements of a product can include the following:===


 * **Features**, as you have already learned, are additions to the basic product that make it more usable. Examples of features for a bicycle are the number of speeds, tire size, frame construction, weight, seat style, and type of brakes.
 * **Uses** are alternative ways the product can be utilized. For example, instant messaging software can be used as an alternative to long-distance telephone service. It also can be used for online meetings and discussions by a virtual business team.
 * **Brand and image** offer a unique identification for a company's product. The brand's name and artistic treatment can communicate a meaningful image to customers that reminds them of the value of the product. What image do you have of brand names such as Lexus, Microsoft, or Disney?
 * **Product quality** is the composition and construction of the product that make it durable and free of defects. Quality is a particular concern for customers who are spending a great deal of money. Quality is also important to customers who expect to use the product for a long time.
 * **Packaging** consists of the container and materials in which the product is shipped and stored. Packaging provides protection. It enhances the image of the product with its composition, design, and colors. It also is a communication tool. Packaging conveys information to the customer through words, pictures, and symbols. A package can attract attention. It can even be an important attribute of the product's use. For example, a resealable food container keeps unused portions of a product fresh after the package has been opened.
 * **Guarantees** offer protection to the customer in the event the product is defective or fails during use. Companies may refund money, provide a new product, or make repairs as part of the guarantee.
 * **Customer service** involves after-sale support. This support includes delivery, setup, training, technical help, and repair services.

** Offering Services **
===In addition to or instead of products, some companies offer services to customers. Services are activities of value that do not result in the ownership of anything tangible. They are exchanged directly between the producer and consumer. Services are consumed at the time they are produced. Examples of traditional service businesses are banks, travel agencies, lawn care businesses, hospitals, schools, and legal firms. Entertainment, transportation, and public utilities are all services with high consumer demand.===

===Some of the most successful e-commerce businesses are service providers. eBay offers an auction service. Expedia is a travel planning and purchasing site. Lending Tree connects consumers interested in borrowing money with preselected lenders.===

===As with products, companies must find ways to make services unique and valuable for their customers. People perform services or operate and maintain the equipment and other resources used to produce and deliver the services. The preparation, skill, and commitment of service personnel are essentail to the businesses' success.===

===Some services are homogeneous, meaning they are offered in the same way each time a customer orders them. The same procedures are followed each time a movie is shown in a theater, a customer uses a bank's ATM, or an airfreight company delivers products for a business.===

===Other services are heterogeneous, meaning there might be differences in the type of srvice and method of delivery for each customer. Examples include legal service, medical services, architectural design, and repair services for complex equipment.===

===One of the most difficult issues facing service businesses is the ability to match availability with customer demand. A company can product a large number of products in advance and have them on hand to meet customer needs. However, personnel must be available to produce services at the exact time customers have a need for them. Depending on the service, demand may fluctuate greatly from day to day or throughout the day. If more personnel are available than needed to meet customers demand, business costs will be excessive compared to revenues. If customer needs exceed the resources of the service business, the demand cannot be met and business will be lost. If customers contact a helpdesk and have to wait 30 minutes for service, they will likely be quite dissatisfied. Service businesses must balance resources with demand at all times in order to be successful.===