Product Concepts Products Product A good a service or an idea received in an exchange Can be Tangible or Intangible It also includes supporting services such as Installation Guarantees Product Includes Functional Social and Psychological Utilities or Benefits Information and promises of Repair or Maintenance o Ex A Four Year 50 000 mile warranty that covers most new automobiles is part of the product itself Be able to explain the difference between a Good Service and Idea and recognize an example of each Good A tangible physical entity Service An intangible result of the application of human and mechanical efforts to people or objects iPad Quiznos Sandwich Performance by Lady Gaga Online Travel Agency Booking Medical Examination Child Day Care Real Estate Services Martial Arts Lessons Idea A concept philosophy image or issue Ideas provide the psychological stimulation that aids in solving problems or adjusting to the environment o Mothers Against Drunk Driving MADD promotes safe consumption of alcoholic beverages and stricter enforcement of laws against drunk driving Be able to distinguish between Product Types Convenience Products Relatively inexpensive frequently purchased items for which buyers exert minimal purchasing effort Soft Drinks Bread Chewing Gum Gasoline Newspapers Shopping Products Items for which buyers are willing to expend considerable effort in planning and making purchases Appliances Bicycles Furniture Stereos Cameras Shoes Specialty Products Items with unique characteristics that buyers are willing to expend considerable effort to obtain A vehicle that is not typically scene on a dealer s lot o A custom designed vehicle Designer clothes Works of art from famous artists 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 Installations Facilities and nonportable major equipment Funeral services Reference books Fire extinguisher As Seen on TV products Training Repairs Maintenance Assistance Financial Assistance File Cabinets Fractional Horsepower Motors Calculators Minerals Chemicals Agricultural Products Spark plugs Accessory Equipment Equipment that does not become part of the final physical product but is used in production or office activities Raw Materials Basic natural materials that become part of a physical product 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 Process Materials Materials that are used directly in the production of other products but are not readily identifiable A salad dressing manufacturer may include vinegar in its salad dressing o The vinegar is a process material MRO Supplies Maintenance repair and operating items that facilitate production and operations but do not become part of the finished product Business Services Intangible products that many organizations use in their operations Be able to distinguish between Consumer Products and Business Products Consumer Products Products that satisfy personal and family needs and are classified according to how buyers generally behave when purchasing them Business Products Purchased to use for operations to resell or to use in manufacture of other products Tires Clocks Brakes Headlights Paper Pencils Oils cleaning agents Financial Legal Market Research Information Technology 1 Convenience Products 2 Shopping Products 3 Specialty Products 4 Unsought Products Installations 1 2 Accessory Equipment 3 Raw Materials 4 Component Parts 5 Process Materials 6 MRO Supplies 7 Business Services Product Hierarchy Understand the Hierarchy from Core Products to Branded Products to Augmented Products what each of these are and examples of each Core Products The physical or intangible service that the customer receives Generic Product Service Branded Products The core products plus the characteristics that allow the consumer to differentiate it from similar products Augmented Products Products with characteristics that enhance value beyond that of the core and branded product Packaging Styling Features Quality Brand Name Return and Recycling Warranty Terms Conditions and Credit Delivery Repair Service Installation Be able to explain Product Management including Product Mix Product Line Product Line Breadth and Product Line Depth Product Line A group of closely related product items viewed as a unit because of marketing technical or end use considerations 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 Depth Of Product Mix The average number of different products offered in each product line Product Line Depth The number of items in a product line Excedrin example The Product Depth would be 8 Product Line Breadth The number of different lines that a company or SBU markets Excedrin example Novartis Consumer Health markets 40 lines of consumer health products so their breadth score would be 40 Be familiar with the Product Life Cycle including the phases and the different types of product life cycles Product Life Cycle The progression of a product through four stages introduction growth maturity and decline Four Phases of the Product Life Cycle 1 Introduction Stage The initial stage of a product s life cycle its first appearance in the marketplace when sales start at zero and profits are negative 2 Growth Stage The product life cycle stage when sales rise rapidly profits reach a peak and then they start to decline 3 Maturity Stage The stage of a product s life cycle when the sales curve peaks and starts to decline and profits continue to fall 4 Decline Stage The stage of a product s life cycle when sales fall rapidly Different Types of Product Life Cycles 1 High Technology Products Products of the new technology age products that Smart Phones require high quality advanced technological parts Computers and Laptops Beats by Dre Headphones 2 Fads An intense and widely shared enthusiasm for something especially one that is short lived and without basis in the object s qualities Boybands Bandanas Mullets Spandex clothing Pokemon Furbies 3 Styles or Fashions A product that stayed popular even after the initial enthusiasm over the product the enthusiasm can jump from generation to generation because of it s popularity Baseball caps Nike Sneakers Jeans Be able to explain
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