What Comprises an Offering?
The three major components of an offering, product, price and service, are discussed in terms of the product-dominant and service-dominant approaches. The difference between product platforms and product lines is also covered. Offerings are products and services designed to deliver value to customers -- either to fulfill their needs, satisfy their "wants," or both.
Product, Price and Service
Most offerings have tangible and intangible components:
- Product - tangible good
- Price - initial amount paid to receive the offering's benefits. Total cost of ownership (TCO) is the total amount someone pays to own, use and eventually dispose of a product.
- Service - can be an action without any tangible characteristics associated with them or some intangible component to a good.
- At times people use the term "product" to mean an offering that's either tangible or intangible.
Different marketers use the good/product/service terminology different. I believe anything that can be offered for an exchange is a product. Products can be physical items (goods) or intangible items (services). Your book takes a slightly different approach. We will follow what your book states but I wanted to add this as an FYI.
The Product-Dominant Approach to Marketing
Focus is on the good, rather than the service or price components of the offering. Approach has its roots in the Industrial Revolution firms were product-oriented, meaning they believed that the best way to capture market share was to create and manufacture better products at lower prices. Taking the product-oriented approach means marketing professionals may focus too much on the product itself and not enough on the customer or service-related factors they want. A great example of this is Henry Ford and the Model T. Ford has been quoted as saying "they can have any color they want as long as it is black." Another more recent example would be 3M and its introduction of Post-It Notes, the company originally introduced the product no knowing on who the customer would be. Of course 3M has changed its orientation since the inception of Post-It Notes as the ad below illustrates.
The Service-Dominant Approach to Marketing
Approach integrates the product, price and service dimensions of an offering. Most customers compare tangible products and the prices charged for them in conjunction with the services that come with them.