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The Total Product Concept
The Total Product Concept by Marvin D. Shepherd, PhD
Theodore Levitt's book, The Marketing Imagi-
nation, l states: "All goods and services can be differentiated and usually are." This is the basic foundation of value added services. Levitt points out that the product is a "complex cluster of value satisfactions." 1 The undifferentiated product or service, commonly referred to as the generic product, is not really the product in most instances. The true product is a cluster of other attributes that make the product useful. For example, a prescription
T1]is column, The Dynamics ofPharmaceutical Care: Value Added Services at Work, is edited by Janet P. Engle, PhanilD, FAPhA, associate dean for academic affairs and clinical associate professor of pharmacy prac.t ice, University of Illinois at Chicago, and is supported by an educational grant from Merck Human Health Division.
O~~,B~I~
drug product placed in a vial without a label or information has limited, if any, value to the patient. The patient does not know how to take the drug, when to take it, how much to take, or why it is being taken. However, when you add the labelwhen you differentiate the product-the product becomes useful. The 2O-cent prescription label adds tremendous value to the product. Of course, there are many other ways to differentiate the product. All will increase the product's value. Levitt states this concept clearly: "The generic 'thing' or 'essence' is not itself the product. It is merely, as in poker, the table stake, the minimum necessary at the outset to allow its producer into the game. But, it's only a 'chance,' a right to enter play. Once entry is actually attained, the outcome depends on a great many other things." 1 By having the product on the shelf, you have entered the game. Now, your success depends on how well you play the game. You must add value to the product in the customer's eyes to be successful. In tomorrow's business, you must offer more than just the product:
journal of the American Pharmaceutical Association
"Phannacists must provide more value based on quality, service, reliability, loyalty to the customer, listening, and becoming a patron problem solver. ,,2 Figure 1 illustrates Levitt's total product concept. It denotes the generic core product as the smallest circleo To the retailer this denotes the merchandise on the shelf. For the real estate agent, it is the home for sale; for the mechanic, it is the broken automobile; and for the phannacist, it is the pharmaceutical product. It is the requirement for entering the market. The dots within each circle represent various ways of differentiating the product or service. In other words, they represent ways of adding value to the product or service. For example, in community pharmacy practice, they may represent drug utilization evaluation and review, delivery service, written patient information, private consultation rooms, drive-up windows, courteous service, and convenient business hours. The next-larger circle represents the "expected product." This is what consumers expect when they use or
purchase the service or prod· uct. Of course, the expected product differs from person to person. Some phannacy patrons may only expect a correctly labeled phannaceu· tical product, whereas others may expect a friendly, courteous pharmacist, drug consultation, and a comfortable waiting area. Thus, it is very important to know the expectations of the customer base and realize that they do differ. The next circle, the augmented product, represents the product when enhanced differentiation occurs. Differentiation is enhanced when the organization gives more than what the customer expects. The product gains additional value when it is differentiated to become more competitive in the marketplace. The process of differentiation involves fmding new and different ways of solving customers' problems. One usually fmds such differentiation among leaders in the marketplace. For example, Procter & Gamble has a toll-free number for customer questions. Nordstrom, 1.1. Bean, Lands' End, and Neiman-Marcus have a "no questions asked" refund
Dynamics of Phannaceutical Care continued on p. 108
January/February 1997
Vol. NS37, No.1
Instructions
To receive two hours of continuing education credit (0.2 CEU) for successful completion of this program, you must:
Dynamics of Phannaceutical Care continued from p. 10 Figure 1
Total Product Concept
1. Complete the answer sheet and type or print your name, address, and Social Security number in the space provided. 2. Mail your completed answer sheet with the correct handling fee ($5 for APhA members; $15 for nonmembers; no additional charge for current 12-exam continuing education program members) to: Processing DesklEducation American Pharmaceutical Association 2215 Constitution Ave., NW Washington, DC 20037-2985
II
Generic Core" Product Expected Product Augmented Product
Certificates will be issued to those who score 70% or higher. Those who score below 70% will be notified, and no credit will be recorded. Allow four weeks for processing.
-- Potential Product
Expiration date: January 31, 2000
Answer Sheet 1. 2. 3. 4.
5. 6.
7. 8. 9. 10.
@ @ @ @ @ @ @ @ @ @
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© © © © © © © © © ©
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11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
@ @ @ @ @ @ @ @ @ @
® ® ® ® ® ® ® ® ® ®
© © © © © © © © © ©
@ @ @ @ @ @ @ @ @ @
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Diagnostic Imaging: An Overview for the Pharmacist APhA provider number for this program is: 202-000-97-0 14-H04.
o
o o o
Make checks payable to "APhA ":
$5 fee enclosed (member rate). $15 fee enclosed (nonmember rate). $45 12-exam continuing education program fee enclosed. $45 12-exam continuing education program fee paid earlier.
Name _________________________________________ Address______________________________________ City ____________________ State
ZIP _ _ _ __
Social Security # _____________________________ I hereby certify that I have taken this test: (signature)
Program Evaluation Excellent Overall quality Relevance to practice Value of content
5 5 5
Poor
4 4 4
3 3 3
2 2 2
Agree Important to pharmacists 5 Increased my knowledge 5 Achieved stated objectives 5 Did not promote particular product or company 5 hours and It took me complete the assessment questions.
1
Disagree
4 4 4 4
3 3 3
2 2 2
1
2 3 minutes to read this article and
journal of the American pharmaceutical Association
Source: Levitt, Theodore, The Marketing Imagination . ~New York: The Free Press; 1983.)
policy. Mamott hotels offer "I'm sony" gift certificates if there is a problem with accommodations. In time, augmented products can turn into expected products. In other words, the new value added service may become the expected product the next time the customer and pharmacist interact. 111erefore, organizations must constantly search for new ways of adding value or augmenting their services or products. The fmal circle represents the "potential product." Beyond the augmented product, this is "everything potentially feasible to attract and hold customers." The jagged line indicates that the space is not defmed, but left to the imagination. It represents what could be done to add value to the product. Some pharmacy services may be classified as being beyond the augmented product circle and thus approaching the potential
product circle. However, the system is dynamic, and today's augmented product could be tomorrow's expected product. Needs and expectations of customers change, competition changes, the health care system changes, and technol{} gy improves. Thus, the changing marketplace requires management to be constantly aware of new approaches to solving customer problems and providing value to the product or service. Information in this column is excerpted from: Shepherd, MD. Pharmaceutical Care: Adding Value to the Future. Monograph 1. In: Value Added Services Series. Washington, D.C: APhA; 1991.
References 1. Levitt T. The Marketing Imagi· nation. New York: The Free Press, 1983. 2. Shepherd MD. Product differ-
entiation: its role in pharmacy marketing. Am Pharm. 1986; NS26:35.
January/February 1997
Vol. NS37, No. 1
Theodore Levitt's book, The Marketing Imagi-
nation, l states: "All goods and services can be differentiated and usually are." This is the basic foundation of value added services. Levitt points out that the product is a "complex cluster of value satisfactions." 1 The undifferentiated product or service, commonly referred to as the generic product, is not really the product in most instances. The true product is a cluster of other attributes that make the product useful. For example, a prescription
T1]is column, The Dynamics ofPharmaceutical Care: Value Added Services at Work, is edited by Janet P. Engle, PhanilD, FAPhA, associate dean for academic affairs and clinical associate professor of pharmacy prac.t ice, University of Illinois at Chicago, and is supported by an educational grant from Merck Human Health Division.
O~~,B~I~
drug product placed in a vial without a label or information has limited, if any, value to the patient. The patient does not know how to take the drug, when to take it, how much to take, or why it is being taken. However, when you add the labelwhen you differentiate the product-the product becomes useful. The 2O-cent prescription label adds tremendous value to the product. Of course, there are many other ways to differentiate the product. All will increase the product's value. Levitt states this concept clearly: "The generic 'thing' or 'essence' is not itself the product. It is merely, as in poker, the table stake, the minimum necessary at the outset to allow its producer into the game. But, it's only a 'chance,' a right to enter play. Once entry is actually attained, the outcome depends on a great many other things." 1 By having the product on the shelf, you have entered the game. Now, your success depends on how well you play the game. You must add value to the product in the customer's eyes to be successful. In tomorrow's business, you must offer more than just the product:
journal of the American Pharmaceutical Association
"Phannacists must provide more value based on quality, service, reliability, loyalty to the customer, listening, and becoming a patron problem solver. ,,2 Figure 1 illustrates Levitt's total product concept. It denotes the generic core product as the smallest circleo To the retailer this denotes the merchandise on the shelf. For the real estate agent, it is the home for sale; for the mechanic, it is the broken automobile; and for the phannacist, it is the pharmaceutical product. It is the requirement for entering the market. The dots within each circle represent various ways of differentiating the product or service. In other words, they represent ways of adding value to the product or service. For example, in community pharmacy practice, they may represent drug utilization evaluation and review, delivery service, written patient information, private consultation rooms, drive-up windows, courteous service, and convenient business hours. The next-larger circle represents the "expected product." This is what consumers expect when they use or
purchase the service or prod· uct. Of course, the expected product differs from person to person. Some phannacy patrons may only expect a correctly labeled phannaceu· tical product, whereas others may expect a friendly, courteous pharmacist, drug consultation, and a comfortable waiting area. Thus, it is very important to know the expectations of the customer base and realize that they do differ. The next circle, the augmented product, represents the product when enhanced differentiation occurs. Differentiation is enhanced when the organization gives more than what the customer expects. The product gains additional value when it is differentiated to become more competitive in the marketplace. The process of differentiation involves fmding new and different ways of solving customers' problems. One usually fmds such differentiation among leaders in the marketplace. For example, Procter & Gamble has a toll-free number for customer questions. Nordstrom, 1.1. Bean, Lands' End, and Neiman-Marcus have a "no questions asked" refund
Dynamics of Phannaceutical Care continued on p. 108
January/February 1997
Vol. NS37, No.1
Instructions
To receive two hours of continuing education credit (0.2 CEU) for successful completion of this program, you must:
Dynamics of Phannaceutical Care continued from p. 10 Figure 1
Total Product Concept
1. Complete the answer sheet and type or print your name, address, and Social Security number in the space provided. 2. Mail your completed answer sheet with the correct handling fee ($5 for APhA members; $15 for nonmembers; no additional charge for current 12-exam continuing education program members) to: Processing DesklEducation American Pharmaceutical Association 2215 Constitution Ave., NW Washington, DC 20037-2985
II
Generic Core" Product Expected Product Augmented Product
Certificates will be issued to those who score 70% or higher. Those who score below 70% will be notified, and no credit will be recorded. Allow four weeks for processing.
-- Potential Product
Expiration date: January 31, 2000
Answer Sheet 1. 2. 3. 4.
5. 6.
7. 8. 9. 10.
@ @ @ @ @ @ @ @ @ @
® ® ® ® ® ® ® ® ® ®
© © © © © © © © © ©
@ @ @ @ @ @ @ @ @ @
® ® ® ® ® ® ® ® ® ®
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
@ @ @ @ @ @ @ @ @ @
® ® ® ® ® ® ® ® ® ®
© © © © © © © © © ©
@ @ @ @ @ @ @ @ @ @
® ® ® ® ® ® ® ® ® ®
Diagnostic Imaging: An Overview for the Pharmacist APhA provider number for this program is: 202-000-97-0 14-H04.
o
o o o
Make checks payable to "APhA ":
$5 fee enclosed (member rate). $15 fee enclosed (nonmember rate). $45 12-exam continuing education program fee enclosed. $45 12-exam continuing education program fee paid earlier.
Name _________________________________________ Address______________________________________ City ____________________ State
ZIP _ _ _ __
Social Security # _____________________________ I hereby certify that I have taken this test: (signature)
Program Evaluation Excellent Overall quality Relevance to practice Value of content
5 5 5
Poor
4 4 4
3 3 3
2 2 2
Agree Important to pharmacists 5 Increased my knowledge 5 Achieved stated objectives 5 Did not promote particular product or company 5 hours and It took me complete the assessment questions.
1
Disagree
4 4 4 4
3 3 3
2 2 2
1
2 3 minutes to read this article and
journal of the American pharmaceutical Association
Source: Levitt, Theodore, The Marketing Imagination . ~New York: The Free Press; 1983.)
policy. Mamott hotels offer "I'm sony" gift certificates if there is a problem with accommodations. In time, augmented products can turn into expected products. In other words, the new value added service may become the expected product the next time the customer and pharmacist interact. 111erefore, organizations must constantly search for new ways of adding value or augmenting their services or products. The fmal circle represents the "potential product." Beyond the augmented product, this is "everything potentially feasible to attract and hold customers." The jagged line indicates that the space is not defmed, but left to the imagination. It represents what could be done to add value to the product. Some pharmacy services may be classified as being beyond the augmented product circle and thus approaching the potential
product circle. However, the system is dynamic, and today's augmented product could be tomorrow's expected product. Needs and expectations of customers change, competition changes, the health care system changes, and technol{} gy improves. Thus, the changing marketplace requires management to be constantly aware of new approaches to solving customer problems and providing value to the product or service. Information in this column is excerpted from: Shepherd, MD. Pharmaceutical Care: Adding Value to the Future. Monograph 1. In: Value Added Services Series. Washington, D.C: APhA; 1991.
References 1. Levitt T. The Marketing Imagi· nation. New York: The Free Press, 1983. 2. Shepherd MD. Product differ-
entiation: its role in pharmacy marketing. Am Pharm. 1986; NS26:35.
January/February 1997
Vol. NS37, No. 1