SERVICES Products are tangible items you can see and examine such as books, boats, and hamburgers. Marketing is used for both products and services, but services are more difficult to market. Services are activities that are consumed at the same time they are produced. Services are intangible, meaning that they have no physical form. Because ser- vices are intangible, it is more difficult to examine a service and determine if it will meet your needs. Marketers must find ways to describe the service in understandable ways to prospective customers. Effective service marketing is done in much the same way as product market- ing. Using the two-step marketing strat- egy, service marketers first identify target markets for services. They then develop a marketing mix that appeals to the market. In addition to the service itself, the market mix includes distribu- tion, pricing, and promotion of the ser- vice. The nature of services compared to the nature of products requires a change in the way they are marketed. Technology Topics Virtual Design When the Jeep Liberty rolled off the assembly line at DaimlerChrysler, it represented a new era in product design. The dashboard had been designed online by a worldwide team repre- senting over 35 companies and headed by the design team of Johnson Controls in Milwaukee, Wisconsin. Johnson was responsi- ble for building the entire cockpit including instruments and controls to be delivered to Chrysler just in time to be installed on each Liberty during final assembly. Using specially developed soft- ware, the ideas of the companies Services are inseparable, meaning that they are consumed at the same time they are produced. The person or tech- nology producing the service must be available when and where the customer How will you determine the best place to get your car serviced or repaired? were added to a virtual dashboard where instrument placement could be viewed, controls could be tested, and the look and feel of the dashboard could be matched with the Liberty's interior and exterior image. Virtual designing allows for instantaneous communication and the ability to view the entire assembly at any time from any company. When one member of the team changed a part or process, the impact of that change could be immediately viewed and evaluated by others. The use of virtual design processes cut the > Describe how services differ from products. normal design time by over 60 percent. Think Critically 1. What problems might be anticipated when bringing over 35 companies from around the world together online for design collaboration? 2. In addition to new product design, what other applications might be possible with the design software and collabora- tion procedures described? 10-2 Develop Effective Products and Services 247 it. 260 >> Communicate Business Concepts 1. Some companies are not marketing busi- nesses, but complete marketing activities as a part of their business operations. Other busi- nesses are marketing businesses because their primary activities are to complete market- ing activities. Identify three businesses from your community that are not marketing busi- nesses and three that are marketing busi- nesses. Justify your choices. CHAPTER 10 Marketing Identify one target market for the printer that is a business consumer and one that is a final consumer. Describe how the marketing mix would be similar and different for each target market. 4. Often it is believed that people will purchase the lowest-priced product available, but experi- ence shows people will pay more for a product if they believe the higher-priced product is bet- ter than the lowest-priced products. Think of several products you purchase for which you know you pay more than you would have to. List the features of the products that cause you to pay a higher price. After you have developed the list, classify the reasons according to the four elements of the marketing mix: product, distribution, price, promotion. 5. The price charged for a product is affected by a number of factors. For each of the following 2. Use the Yellow Pages of the telephone dire tory for your town or city. For each of the seven marketing functions, locate a busine whose primary work relates to that function Identify the work of the business to show h it relates to the marketing function. 3. You are planning the marketing strategy for new portable printer that weighs less than pounds and can fit in a backpack or briefc situations, identify whether you believe it will result in a higher or lower price. Write one or two sentences to justify each answer. a. One customer purchases a very large quan- tity of a product. b. A business provides a high level of cus- tomer service. c. The product is very fragile and requires special handling. d. The product moves through many busi- nesses in the channel of distribution before it reaches customers. 6. Internet services have the same traits as those provided by bricks and mortar businesses. Locate an Internet service business. Review the company's web site and find information that describes how the service is intangible, inseparable, perishable, and heterogeneous. HOT Gros 0101 r- the mil- ctly ed tes 55 OW a wo ase >> Develop Your Business Language Match the terms listed with the definitions. 7. Any paid form of communication through mass media directed at identified consumers to pro- vide information and influence their actions. 8. The exchange of information so there is com- mon understanding by all participants. 9. A specific group of consumers that have simi- lar wants and needs. 10. Everything a business offers to satisfy a cus- tomer's needs. 11. The locations and methods used to make a product or service available to the target market. 12. The blending of the marketing elements. 13. Intangible activities that are consumed at the same time they are produced. 14. The process of planning and executing the conception, pricing, promotion, and distribu- tion of ideas, goods, and services to create exchanges that satisfy individual and organiza- tional objectives. 15. The route a product follows and the busi- nesses involved in moving a product from the producer to the final consumer. 16. Finding solutions to problems through carefully designed studies involving consumers. 17. A company's plan that identifies how it will use marketing to achieve its goals. 18. The reasons consumers decide what products and services to purchase. 19. Direct individualized communication with prospective customers to assess their needs and assist them in satisfying those needs with appropriate products and services. 20. Any form of communication used to inform, persuade, or remind. 21. The money a customer must pay for a product or service. Key Terms a. advertising b. buying motives c. channel of distribution d. consumer decision-making process e. distribution 1. effective communication g. marketing h. marketing mix i. marketing research. j. marketing strategy k. personal selling L. price m. promotion n. services o. target market CHAPTER 10 Assessment 261