Page 145 - DMGT509_RURAL MARKETING

Rural Marketing

Notes Kotler distinguished three components:
 need: a lack of a basic requirement;
 want: a specific requirement for products or services to match a need;
 demand: a set of wants plus the desire and ability to pay for the exchange.

Customers will choose a product based on their perceived value of it. Satisfaction is the degree
to which the actual use of a product matches the perceived value at the time of the purchase. A
customer is satisfied only if the actual value is the same or exceeds the perceived value. Kotler
defined five levels to a product:
1. Core Benefit: The fundamental need or want that consumers satisfy by consuming the
product or service.
2. Generic Product: A version of the product containing only those attributes or characteristics
absolutely necessary for it to function.
3. Expected Product: The set of attributes or characteristics that buyers normally expect and
agree to when they purchase a product.

4. Augmented Product: Inclusion of additional features, benefits, attributes or related services
that serve to differentiate the product from its competitors.
5. Potential Product: All the augmentations and transformations a product might undergo
in the future.
Kotler noted that much competition takes place at the Augmented Product level rather than at
the Core Benefit level or, as Levitt put it: ‘New competition is not between what companies
produce in their factories, but between what they add to their factory output in the form of
packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing,
and other things that people value.’
Kotler’s model provides a tool to assess how the organisation and their customers view their
relationship and which aspects create value.

8.3 Product Life Cycle

The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is
planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as
it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die
out (decline).
In theory it’s the same for a product. After a period of development it is introduced or launched
into the market; it gains more and more customers as it grows; eventually the market stabilises
and the product becomes mature; then after a period of time the product is overtaken by
development and the introduction of superior competitors, it goes into decline and is eventually
withdrawn.
However, most products fail in the introduction phase. Others have very cyclical maturity
phases where declines see the product promoted to regain customers.

Introduction

The need for immediate profit is not a pressure. The product is promoted to create awareness. If
the product has no or few competitors, a skimming price strategy is employed. Limited numbers
of product are available in few channels of distribution.

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