Product Components

We know that consumers purchase products to satisfy needs. Another way to say this is that people really want a “bundle” of benefits when they purchase a product, and different consumers are likely to want different benefits from the same type of a product. For example, some consumers buy Rollerblade skates for fun, others as a way to increase health and fitness, and others because of the excitement involved with in-line roller skating.

To provide the benefits consumers want, marketers need to integrate the components that make up a product effectively. These consist of the product and customer service features. Product features include quality, design, branding, and packaging. Customer service encompasses various purchase and usage services. Different blends of product features and customer service provide different benefit bundles.

Credit cards offer a good example. Although all credit cards provide a basic benefit (credit), they offer different mixes of benefits to appeal to specific consumers. Credit cards differ in annual fees, rewards for use of the card, payment terms, design of the card, brand name, and services provided. All these components interact to produce the product, or the benefits, consumers’ purchase. For example, American Express recently launched a new credit card, the Blue card. In addition to offering typical credit card features and benefits, the Blue card offers user’s access to the American Express Online Wallet. This new feature provides customers with the benefit of faster and more-secure on-line purchase. Consumers concerned about Internet security are likely to value the benefit bundle offered by the Blue card.

Some firms are practicing mass customization by offering each customer a customized bundle of benefits. New information and communications technologies are making this possible. For example, many Internet sites allow each individual user to select specific types of information to be continuously downloaded and displayed on the user’s screen. Each customer can select the stock prices to be reported, the cities for weather forecasts, the types of sports information desired, and other specific types of information to be communicated. Another example is the marketing by Levi’s of custom-fitted jeans to women. As technology develops, more opportunities to increase customer value through mass customization will become available.

Comprehension questions:

1. Why do people buy products?

2. What is a “bundle” of benefits?

3. What does product features include?

4. How do credit cards differ?

5. What is mass customization?

Quality

As a product component, product quality represents how well the product does what it is supposed to do as defined by the customer.

Improving product quality as consumers define it can be an effective way to increase product sales. For example, most consumers probably consider a quality turtleneck to be one that looks good, fits well, and lasts a long time. JCPenney found that its turtlenecks were of lower quality than those offered by competitors. Penney’s turtlenecks lost their fit and did not last very long, because they shrank and puckered at the seams upon washing. To improve the product’s quality, the Penney Company stiffened its specifications for fabric, fit, and construction, and added Spandex to the neck and cuffs. By introducing higher-quality turtlenecks and reducing the price to provide more value, the company saw sales triple in a year.

Consumers define quality of turtlenecks in terms of looks, fit, and durability. In other markets, consumers define quality differently. In the prestige fountain pen market, for example, consumers consider utility along with glamour and distinction. Cross, Waterman, Montblanc, and Parker compete in this market. All these products offer similar utility, but each provides prestige differently. One maker may emphasize glamour, citing the famous people who use its pens; another may emphasize distinction, pointing to the historical documents signed with its pens. Consumers have responded to these pitches about quality by using as many as eight different pens during a year, with specific pens to match wardrobes or to sign different sorts of documents.

Marketers, however, cannot always be sure consumers have accurate perceptions of the quality of their products. This was an especially difficult problem for the US automobile industry. Objective assessments of quality by trade observers or groups such as J.D.Power have consistently shown improvements in the quality of American cars. Yet, many consumers were not aware of these quality improvements. They typically based purchase decisions on personal perceptions of quality, not necessarily objective evaluations, and these perceptions lagged reality.

Quality is what consumers consider it to be. Marketers should ensure that their product provide the desired level of quality, work to constantly improve this quality, and convey to consumers an accurate picture of the quality. These are difficult tasks, but they are essential for success in today’s competitive marketplace.

Comprehension questions:

1. What does product quality represent?

2. What is the effective way to increase product sales?

3. How can consumers define the quality of a product?

4. Can marketers always be sure of consumers’ desires?

5. What should marketers ensure customers in?

Design

Product design includes the styling, aesthetics, and function of a product. How a product is designed affects how it works, how it feels, how easy it is to assemble and fix and how easy it is recycle.

Product design decisions can be pivotal in a product’s success. Consider one example: the introduction by Reebok and Nike of basketball sneakers with inflatable air cushions for better ankle support. The Nike shoe required the wearer to carry a separate hand pump to inflate the shoe. The Reebok shoe design included a pump tucked neatly into the shoe’s tongue. Reebok Pump was successful; Nike had to drop its shoe from the market.

Much of the current focus on product design is to improve the performance of a product and to reduce the cost of producing it. Boeing did this when it designed the fighter jet in the twenty-first century. The design was very innovative with an unusual modular wing, a front-mounted engine, and stealth capabilities. This design improved jet fighter performance, but it also significantly reduced production costs.

Ford took a slightly different approach in designing the 1977 Taurus. It asked workers and engineers at Taurus factories to come up with ideas to make the car more cheaply without reducing performance. Most of the design changes are invisible to consumers and represent cost reductions of a 1 dollar here and 50 cents there. The total savings per car amounted to about 180 dollars. Although this does not sound like much, the redesign will save Ford about 73 million dollars a year.

Product design is becoming increasingly important for all types of products, even low-cost ones. For example, Century Cuddle Tub & Huggy Bath is a baby bathtub. The company knew that it is difficult to bathe a newborn, since one hand has to hold the baby’s head and the other the washcloth. So it designed a baby bathtub that consists of a simple hammock in the tub with a headrest to hold the baby’s head securely. This leaves the parent’s hands free to do the washing. The cost of the product is 19.99 dollars. As suggested by William Stumpf, a judge for the Industrial Design Excellence Awards, “Good design is now across all product lines, from computers to appliances.”

Comprehension questions:

1. What does product design include?

2. How can product design decisions be defined?

3. What is the focus on product design?

4. What approach in designing did Ford take in 1977?

5. Is product design becoming increasingly important for all types of products?

Referring to Unit 10