Chapter 11 Product Concepts 1 Product 2 Good 3 Service 4 Idea A good service or idea received in an exchange A tangible physical entity The intangible result of the application of human and mechanical efforts to people or objects A concept philosophy image or issue 5 The Total Product Core product i The product s fundamental utility or main benefit ii Addresses the basic need of the consumer iii Example Sports Drink Rehydrates Supplemental Features i Provide value in addition to a product s core utility ii Helps differentiate the product brand Symbolic and experiential benefits i Buyers purchase the benefits and satisfaction they think the product will provide ii Products carry a symbolic meaning 6 Types of products Consumer products Business Products other products 7 Types of consumer products Convenience Products i Products purchased to satisfy personal and family wants and needs i Products bought to use in a firm s operations to resell or to make ii Purchased to satisfy the goals of the organization Inexpensive frequently purchased items for which buyers put minimal purchasing effort Items buyers are willing to expend considerable effort in planning and making purchases Items with unique characteristics that buyers are willing to expend considerable effort to get i i i Shopping Products Specialty Products Unsought Products i Products purchased to solve a sudden problem ii Products of which customers are unaware iii Products that people do not necessarily think of buying 8 Types of Business Products Installations i Facilities and non portable equipment Accessory Equipment i Not part of the final product Raw Materials i Natural materials that are part of a product i Finished items ready for assembly i Used in production but not identifiable Component Parts Process Materials MRO Supplies final product Business Services i Maintenance repair and operating items that are not part of the i 9 Product Item Intangible products in operations A specific version of a product that is a distinct offering among an organizations line of products 10 Product Line A group of closely related product items viewed as a unit because of marketing technical or end use considerations 11 Product Mix The total group of products that an organization makes available to customers i Width of Product Mix The number of product lines a company offers ii Depth of Product Mix The average number of different products in each product line 12 Stages of the Product Life Cycle Introduction Stage i The first stage ii Sales start at 0 and profits are negative iii High risk of failure i Sales rise rapidly ii Profits reach a peak and then decline i The sales curve peaks and starts to decline and profits continue to Growth Stage Maturity Stage fall Decline Stage i Sales fall Innovators Early Adopters Early Majority Late Majority Laggards 13 Innovative Product Adopter Categories i First adopters of new products i Careful choosers of new products i Those adopting new products just before the average person i Skeptics who adopt new products when they feel it is necessary i The last adopters who distrust new products 14 Why some products fail succeed Failure to match product needs Failure to send right message Technical problems Poor timing Ineffective promotion Insufficient distribution
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