Stages of Marketing A Product or Service
A core argument is that because of technology, increasing competition,and the increasing expectations of consumers, services today are starting to look like commodities. Products can be placed on a continuum from undifferentiated (referred to as commodities) to highly differentiated. Just as service markets build on goods markets which in turn build on commodity markets, so transformation and experience markets build on these newly commoditized services, e.g. Internet bandwidth, consulting help.
The classification for each stage in the evolution of products is:
- A commodity business charges for undifferentiated products.
- A goods business charges for distinctive, tangible things.
- A service business charges for the activities you perform.
- An experience business charges for the feeling customers get by engaging it.
- A transformation business charges for the benefit customers (or "guests") receive by spending time there.
Proceeding to the next stage more or less requires giving away products at the more commodified level. For instance, to charge for a service such as new car warranties, one must be prepared to give away new cars to replace "lemons". And to charge for transformations, one must be prepared to risk not being paid for the time one spends working with customers who don't "transform".
Pine and Gilmore draw on Walt Disney, AOL, Nordstrom, Starbucks, Saturn, Kanye West, IBM and many others as examples.
Read more about this topic: The Experience Economy
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