CH 11 managing existing products product a good service or idea received in an exchange good a tangible physical entity a ex book magazine video game service an intangible result of the application of human and mechanical efforts to people or objects a ex hotels trying to accommodate you manicure pedicure etc idea a concept philosophy image or issue a ex Mothers against drunk driving MADD philosophy that attempts to stop drinking and driving the core product consists of its fundamental utility or main benefit whether you buy Dasani Aquafina or Fiji they all are there to quench your thirst supplemental features these can include installation delivery financing etc symbolic and experimental benefits some products provide symbolic meaning a ex you can buy a teddy bear anywhere but at build a bear you can choose any kind of teddy bear size and stuff it yourself b ex a rolex is not simply just to tell time it provides symbolic meaning of success classifying products 2 general categories of products consumer and business products Consumer products products purchased to satisfy personal and family needs Business products products bought to use in a firms operations to resell or to make other products consumer products Convenience products relatively inexpensive frequently purchased items for which buyers exert minimal purchasing effort usually found at retail stores a Ex chewing gum bread soft drinks newspapers gas etc b Not much thought put into which to buy or don t compare brands and prices Shopping products items for which buyers are willing to expend considerable effort in planning and making purchases buyers spend time comparing brands and prices last a relatively long time a Ex Furniture appliances cameras shoes etc Specialty products items with unique characteristics that buyers are willing to expend considerable effort to obtain a One does not consider substitutes and only wants the specific product b Ex a mont blanc pen a one of a kind piece of baseball memorabilia Unsought products products purchased to solve a sudden problem products of which customers are unaware and products that people do not necessarily think of buying a Ex a new radiator if yours breaks on the highway medicine if you get the flu business products Installations facilities and non portable major equipment decisions made by top level management because these products are expensive and intended for long use A Ex buildings factories and very large machines Accessory equipment equipment that does not become part of the final physical product but is used in production or office activities a Ex calculators tools file cabinets etc Raw materials basic natural materials that become part of a physical product a Ex Minerals chemicals agricultural products and materials from forest oceans Component parts items that become part of the physical product and are either finished items ready for assembly or items that need little processing before assembly a Ex brakes spark plugs tires are all component parts of an automobile Process materials materials that are used directly in the production of other products but not readily identifiable Ex Caesar salad dressing has a little bit of vinegar in it but the vinegar is not identifiable MRO supplies maintenance repair and operating items that facilitate production and operations but do not become part of the finished product a Ex paper pencils cleaning agents and paint all fall into this category b Ex febreeze is an MRO supply to hotels but is a consumer good to us Business services intangible products that many organizations use in their operations a Ex Janitorial services financial services law services etc product item a specific version of a product that can be designated as a distinct offering among a firms products Product line a group of closely related product items viewed as a unit because of marketing technical or end use considerations a Ex Colgate tooth whitening Colgate cavity control Colgate sensitive gums etc b Ex proctor and gamble detergent line includes tide bold cheer gain and era product mix the composite or total group of products that an organization makes available to customers Width of product mix the number of product lines a company offers a Ex GE has different types of products including houseware healthcare Depth of product mix the average number of different products offered in each commercial product line product life cycle Product life cycle the progression of a product through 4 stages introduction growth maturity and decline introduction stage the initial stage of a products life cycle its first appearance in the marketplace when sales start at zero and profits are negative growth stage the product life cycle stage when sales rise rapidly profits reach a peak and then they start to decline Profits start to decline at end of this stage when other competitors enter the market maturity stage the stage of a products life cycle when the sales and curve peaks and starts to decline and profits continue to fall Characterized by intense competition Companies begin using promotional or globalizing a Generate cash flow b Maintain share of market c 3 objectives of companies in maturity stage Increase share of customer decline stage the stage of a product life cycle when sales fall rapidly Companies begin to eliminate products or product lines that are no longer profitable product adoption product adoption process 5 stage process of buyer acceptance of a product awareness interest evaluation trial adoption Awareness buyer becomes aware of a new product Interest buyer seeks information about new product Evaluation buyer decides to use new product or not Trial buyer tries new product to see if it meets his her needs Adoption buyer tries product likes it and is expected to buy it again Innovators first adopters of new technology Early adopters people who adopt new products early choose new products carefully and are viewed as the people to check with by later adopters early majority individuals who adopt a new product just prior to the average person late majority skeptics who adopt new products when they feel it is necessary laggards the last adopters who distrust new products Most people are either in the early or late majority category Ch 12 Developing and Managing Products Line extension development of a product that is closely related to other products in the line but is design specifically to meet different customer needs For example the Porsche
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