Agriculture Reference
In-Depth Information
Potential product
Value-added
product
Expected product
Generic product
Figure 7.3
The total product concept
Source: Manning and Reece 1990.
as alike in the market. A fi rm stopping here in developing a product strategy will compete
solely on price, since the fi rm is not providing customers with any value above and beyond
what any other fi rm is doing.
Let's use a retailer of fertilizer to illustrate the total product concept. The generic
product for this fi rm might be bulk fertilizer and crop protection products. There are no
services attached and the set of products carried by the fi rm can be purchased from any
other fi rm in the market. The generic product is a true commodity in the mind of the
customer.
Most agribusinesses don't stop with the generic product. The
expected product
builds
on the generic product by surrounding it with the bare minimum set of features/services that
the customer expects when they make a purchase. Like the generic product, the fi rm doesn't
get much credit by providing the expected product—at this level the fi rm has simply
met customer expectations. On the other hand, fi rms not providing the expected product are
discounted heavily in the mind of customers because even the bare minimum is not being
provided.
The expected product for the fertilizer retailer might include a standard custom applica-
tion service, standard agronomic recommendations, grid soil sampling, a 30-day credit
policy, some minimum set of equipment available for rent, standard complaint-handling
service, a web site with basic information, and a clean and neat facility. Again, the focus is
on the minimum set of product-related services the customer expects to receive. While the
fi rm has added value to the generic product at this level, the customer still sees a commodity
since only their minimum expectations have been met.
To this point, most of the focus has been on tangible products and service. For the value
added and potential products, value is driven almost totally by customers' perceptions about
the more intangible attributes surrounding the products and services. The
value added
product
is the fi rst opportunity for the agribusiness fi rm to truly exceed the customer's
expectations. The focus at the value added product level is satisfying customer needs in a
