Page 133 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes 4. The fourth level is the augmented product and refers to well thought out and deliberate
additions of features, benefits, and services (such as in case of durable, complex products)
delivery, installation, customer education and training, after sales service, guarantees or
warranties, payment options, customer complaint redressal, etc. Marketers deliberately
instigate the design and production of goods.
5. The fifth level is the potential product. This refers to all the possible augmentations and
changes that the product can undergo.

Table 6.1: Five Product Levels

Level Air-conditioner
1. Core benefit Cooling and comfort.
2. Generic Product Sufficient cooling capacity and acceptable energy efficiency rating,
reasonable air intakes, exhausts and so on.
3. Expected product At least two cooling speeds, expandable plastic slide panels, adjustable
louvers, removable air filter, vent for exhausting air, power cord at least
60-inches long, relatively safe refrigerant, one-year parts warranty and on-
site service warranty, and five-years’ warranty on the refrigeration system.
4. Augmented Optional features might include electric touch-pad controls, a display to
Product show indoor and outdoor temps. and the thermostat setting, an automatic
mode to adjust fan speed based on the thermostat setting and room
temperature, and a toll-free number for customer service, one or two free-
services, etc.
5. Potential Product Silent operation, temperature completely balanced across the room, and
energy self-sufficient.

Caselet Dell: Delivering Customer Value

rom its origins in Michael Dell’s dorm room at the University of Texas, Dell Computer
sold personal computers directly to end users, in contrast to most other leading
Fmanufacturers, who sold through distributors, resellers, and retailers. By
differentiating from other computer makers – selling direct, first over the telephone, and
later via the Internet – Dell enabled customers, especially corporate customers, to specify
exactly the features they wanted. Dell then quickly assembled computers to meet these
specifications and shipped them directly to its customers.
What was it that about Dell’s concept that customers found so attractive? First, they could
specify precisely what they wanted – hard drive size, memory, modem or network card,
and so on. Second, Dell’s price/value offering was unbeatable – customers got more
computer for their money. And, because Dell shipped quickly and offered strong service
and support, albeit without local face-to-face handholding, these two major benefits – get
what you want, for less money – came without any significant drawbacks to the key target
market: corporations.
Not only did Dell’s direct business model offer tangible benefits to its target customers, it
also brought Dell important advantages that gave it a real and – so far – sustainable edge
over its competitors. Dell worked closely with its suppliers to arrange just-in-time delivery
of parts for its custom-assembled PCs, communicating replenishment needs to key vendors
on an hourly basis. By carrying, in 1996, for example, only 15 days inventory on average,
instead of 65 days for competitor Compaq, Dell not only saved carrying cost for its inventory,
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