2. Ask 10 questions to the text.

3. Summarize the content of the text.

1. Read text 3. Text 3. What Is a Product?

When we think of products we usually think of tangible, physical objects like a can of soup, a pair of jeans or a washing machine. In fact, products also encompass many other intangible things such as services (e.g. dry cleaning and life insurance); organizations (e.g. British Telecom and Greenpeace); places (Milton Keynes and Barbados) and even ideas (e.g. the 'Buy British' campaign). In addition, whilst they might not like to think of themselves in this light, people such as politicians and pop stars are often packaged as products, in terms of the public image they project. The American election campaigns would con­vince even the most hardened skeptics that people can be marketed as products!

Yet whatever the type of product or brand that is purchased, consumers generally expect to receive a variety of benefits from their purchases. For exam­ple, when you buy a bottle of shampoo you take it for granted that it will fulfill its core benefit of cleaning your hair. The chances are you will probably also expect it to be gentle on your hair, add shine and body and smell fresh. This is quite apart from any expectations concerning the price and packaging, not to mention the often highly evocative brand image created by the advertising. The campaign for Timotei shampoo is a classic example, portraying an idealized image of natural beauty and health.

In the case of major purchases like electrical goods, consumers often expect extra product features, good reliability and long service contracts. For items like expensive perfumes and designer clothes, the expectation of quality created by the brand name and image can be as important as the products themselves. In short, consumers today expect to be offered much more than the basic pro­duct. Marketing expert Ted Levitt maintains that products can be offered at four levels:

(a) Generic product. This is the basic product. In the past, household goods such as soap, flour and tea were sold loose in grocery shops. Today supermarkets still sell some goods which customers can weigh and pack but most tend to be offered in the form of packaged and branded products.

(b) Expected product. This is the product with features which have, over a period of time, become the standard specification. For example, consumers would be surprised to find a video cassette recorder these days that did not have an electronic remote con­trol. Competition has intensified to the point where features which were once regarded as radical new extras have very rapidly become the industry norm.

(c) Augmented product. Firms accept that, in the markets of today, technological superiority cannot be maintained for long. They therefore strive to gain a competitive edge by adding to, or augmenting, the attractiveness of their product in other less tangible ways. This can be done by improving the quality of after-sales service, reducing delivery times and by extending guarantee periods. In recent years, firms have also started to offer credit facilities such as zero per cent finance deals.

(d) Potential product. Inevitably, it is not long before even these initiatives are adopted by com­petitors. Firms are then faced with trying to unlock the full potential of their products by discovering new ways of attracting and holding customers. In the case of banks, this has led to the introduction of Saturday opening and of interest-earning current accounts - moves designed to stem the inroads made by building societies into areas that were once the traditional province of the banking sector. In the final analysis, measures aimed at improving the potential of any product succeed only if they manage to add value to the product in the eyes of consumers so that it is then perceived as the best purchase.

Levitt argues that firms are facing a new kind of competition today. 'Not competition 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 people value.'