## Products and Services in Business Strategy
### A. Pricing Objectives for a New Product
When designing a pricing strategy for a really new product, at least three objectives must be kept in mind:
1. Acceptability — Making the product acceptable to customers (price must not be so high it deters adoption).
2. Margin over cost — Producing a reasonable margin over cost (the price must cover costs and generate profit).
3. Market share — Achieving a market that helps in developing market share (price strategy must support growth in customer base).
### B. Social Marketing vs Service Marketing
| Dimension | Social Marketing | Service Marketing |
|---|---|---|
| Definition | Design, implementation, and control of programs to increase acceptability of a social idea, cause, or practice among a target group | Applying marketing concepts, tools, and techniques to services |
| Orientation | Social/behavioural change | Commercial service delivery |
| Examples | Anti-smoking campaigns, girl-child awareness | Banking, telecom, insurance, repair services |
| Nature of offering | Social idea or cause (intangible) | Service — intangible and non-perishing activity/benefit |
| Market | Target group (public/community) | B2C or B2B |
### C. Key Characteristics of Business Products
1. Tangibility — Products are tangible (car, book, phone — physically felt) or intangible (banking, telecom, insurance — not physical goods).
2. Price — Products have a price determined by supply/demand dynamics and the target market. In competitive markets, price is often given by the market; businesses must control costs to maintain profitability.
3. Features delivering satisfaction — Product features satisfy consumer needs; they determine pricing and differentiate the product. A customer's cumulative experience from purchase to end-of-life is part of the feature value.
4. Central to business — The product is at the centre of all strategic activities: production, quality, sales, marketing, logistics revolve around it. It is the driving force behind business activities.
5. Useful life / Life cycle — Every product has a usable life (after which it must be replaced) and a life cycle (after which it must be reinvented or may cease to exist). Example: fixed-line telephones largely replaced by mobile phones.