copyright © houghton mifflin company. all rights reserved. 13 | 1 product “…everything one...
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Copyright © Houghton Mifflin Company. All rights reserved. 13 | 1
Product
“…everything one receives in an exchange, including all tangible and intangible attributes and expected benefits; itmay be a good, service, or idea.”
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Product
• Good- a real, physical thing that we can touch
• Service- the result of applying human or mechanical effort to a person or thing, a change we pay others to make for us
• Idea- may take form of philosophies, lessons, concepts, or advice
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Consumer Product
“…a product purchased to satisfy personal and family needs.”
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Consumer Product Classifications
Convenience- inexpensive, frequently purchased item, buyers exert minimal effort
Shopping- buyers willing to expend considerable effort planning/making purchase
Specialty- possesses one or more unique characteristics, significant group of buyers willing to expend considerable purchasing effort
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Business Product
“…a product bought for resale, for making other products, or for use in a firm’s
operations.”
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Business Product Classifications
Raw material- becomes part of physical product Major equipment- tools/machines used in production Accessory equipment- standardized equipment used in
production or office activities Component- part of physical product either as finished
item or needs little processing before assembly Process material- directly in production of another
product, not readily identifiable in finished product Supply- facilitates production/operations, does not
become part of finished product Business service- intangible product used in operations
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Product Classification Determines:
• Distribution• Promotion• Pricing
“The buyer’s use of the productdetermines the classification of an item.”
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Figure 13.1: Product Life Cycle
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Stages of Product Life Cycle
Introduction Sales- rise gradually Profit- low or loss
Growth Sales- increase rapidly Profit- per unit drops
Maturity Sales- curve peaks and declines Profit- declines
Decline Sales- drops sharply Profit- continues to fall ©2007 Stockbyte/John Foxx
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Product Line
“…a group of similar products that differ only in relatively minor characteristics.”
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Product Mix
“…all the products a firm offers for sale.”
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Dimensions Of Product Mix
Width (broad or narrow) Depth Ways to improve
Change existing product Delete a product Develop a new product ©2007 Microsoft PowerPoint
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Brand
“…a name, term, symbol, design,or any combination of these that identifiesa seller’s products as distinct from those of
other sellers.”
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Brand Name
“…the part of a brand that can be spoken.”
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Brand Mark
“…the part of a brand that is a symbol or distinctive design.”
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Trademark
“…a brand name or brand mark that is registered with the U.S. Patent and
Trademark Office.”
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Types of Brands
Manufacturer/Producer- owned by a manufacturer (Nike)Store/Private- owned by individual wholesaler or retailer (IKEA)Generic Product/Brand- product with no brand (grocery store )
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Percent of People Who AreFrequent Purchasers of Store-Brands
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1991 2001 2006
Source: Design and Display, “Store-Brand Products Become More Popular with Shoppers”, Dec. 2006, http://www.ddimagazine.com/displayanddesignideas/headlines/article_display.jsp?vnu_content_id=1003493670
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Benefits of Branding
Brand Loyalty- customer favorable toward specific brand Brand Recognition Brand Preference Brand Insistence
Brand Equity- marketing/financial value associated with brand’s strength
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Choosing andProtecting a Brand
Easy to say, spell, recallSuggest product’s uses, special characteristics, and major benefitsShould be distinctive enough to set it apartProtect it through registration®Generic terms cannot be legally protected
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Packaging
“…all the activities involved in developing and providing a container with graphics
for a product.”
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Packaging Functions
Protect ProductConsumer ConveniencePromote ProductDesign Considerations Cost Single/multiple units Family packaging- consistency Needs of intermediary Environmental responsibility
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Labeling
“…the presentation of information on a product or its package.”
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FederalRegulations on Labeling
Garments- manufacturer, country, fabric content, cleaning instructionsFood Ingredients Servings per container Serving size Calories per serving Calories from fat Amounts of specific ingredients Nutritional food- nutrition labeling
Nonedible items- safety precautions and instructions
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Express Warranty
“…a written explanation of the responsibilities of the producer in the event
that a product is found to be defective or otherwise unsatisfactory.”