Products Services and Experiences

Product is a key element in the overall market offering. Marketing-mix planning begins with building an offering that brings value to target customers. This offering becomes the basis upon which the company builds profitable customer relationships.

A company's market offering often includes both tangible goods and services. At one extreme, the offer may consist of a pure tangible good, such as soap, toothpaste, or salt—no services accompany the product. At the other extreme are pure services, for which the offer consists primarily of a service. Examples include a doctor's exam or financial services. Between these two extremes, however, many goods-and-services combinations are possible.

Today, as products and services become more commoditized, many companies are moving to a new level in creating value for their customers. To differentiate their offers, beyond simply making products and delivering services they are creating and managing customer experiences with their brands or company.

Experiences have always been an important part of marketing for some companies. The entertainment-company Disney has long manufactured dreams and memories through its movies and theme parks. And Nike has long declared, "It's not so much the shoes but where they take you." Today, however, all kinds of firms are recasting their traditional goods and

Creating experiences: Umpqua Bank's "stores" are designed to make banking a pleasurable experience. "Customers aren't just doing transactions. . . they're paying admission to a club— one that delivers something to satisfy the soul."

Most customers would never describe a bank transaction as soul satisfying, but Umpqua Bank isn't your average bank. Umpqua feels more like a café—think bank crossed with your local Starbucks. Umpqua's "stores" are designed to make banking a pleasurable experience that will cause customers to stick around and maybe buy something. Customers sit at a cozy coffee bar, sip Umpqua-branded coffee, read the morning paper, watch investment news on big-screen TVs, pay bills online via WiFi access, and don headphones to check out local bands at the bank's online music store. After-hours activities such as movies, knitting, and yoga classes are encouraged just as much as financial events. Turning bank services into a rewarding experience has been good for Umpqua's business. The company has grown from only $140 million in assets in 1994 to more than $8.3 billion last year. Customers aren't just . . . doing transactions at Umpqua Bank," says an analyst. "They're paying admission to a club—one that delivers something to satisfy the soul."

services to create experiences. A For example, a visit to Umpqua bank involves a lot more than just loans and deposits:2

Core, actual, and augmented product: People who buy a BlackBerry are buying more than a cell phone, e-mail device, or organizer. They are buying freedom and on-the-go connectivity to people and resources.

Companies that market experiences realize that customers are really buying much more than just products and services. They are buying what those offers will do for them.

Continue reading here: Product and Service Classifications

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