principles of marketing.outcome 3
TRANSCRIPT
Outcome 3PRODUCT
Principles of Marketing
What is a Product?
A product is anything that can be offered to a market to
satisfy a need or want.
What is a Service?
A service is a form of product that consist of
activity or benefit that one party can offer.
Goods Services
Tangible( A thing) Intangible (an activity or process)
Production and distribution separated from consumption
Production, distribution, and consumption are simultaneous
Homogeneous • Heterogeneous
Mostly non perishable, can be kept in stock
Perishable, cannot be kept in stock
• Core value produced in a factory • Core value produced in buyer-seller interactions
• Customers do not participate in the production
Customers participate in production
Transfer of ownership • No transfer of ownership
Product Classification
Convenience
Unsought
Shopping
Specialty
1. Consumer Products
Product Classification
Materials and parts
Supplies/
business servicesCapital items
2. Industrial Products
Consumer products
Product and services bought by final consumer for personal use.
Convenience products
Convenience products are consumer products that the customer buys frequently, immediately with a minimum of comparison and buying effort. EX: Match boxes, soft drinks, candles, socks, etc.
Shopping Products
Shopping Products are less-frequently- purchased products that customers compare carefully on suitability, Quality, Price and Style. Ex: Home appliances, automobiles, etc.
Specialty Products
Specialty Products are Consumer products with unique characteristics or brands and the buyers will make a special purchase effort. Ex: Luxury goods like, Mercedes Benz etc.
Unsought products
Unsought products are consumer products that the consumer either does not know about or knows about but does not normally think of buying. Ex: insurance.
Industrial Products
Industrial Products: Products brought by individuals or organizations for further processing or for use in conducting business. Ex: Ball bearings, nuts & bolts, screws, machinery, raw materials, etc.
Product Decisions
1. Product Attributes– quality, features, style, and design.
2. Branding – name, term, symbol, or design or combination of these to identify goods and services, and to differentiate them from competitors.
3.Packaging – activity of designing and producing the container or wrapper for a product.
4. Labeling – simple tags attached to the products.
5. Product Line – group of product that are closely related; function in a similar manner; sold to the same type of customers; marketed through the same type of distribution channels.
Product line
https://www.youtube.com/watch?v=i2xRUE0e8q4
New Product Development
Development of original products, product improvements, product modification and new brands through the firm’s own brand and effort.
IDEAPAINT
EXAMPLES
Following are some common examples of product development. Packing wheat flour in retail bags for household consumption. Packing cooking oil in retail pouches for household consumption.
Modify desktop computers into
light-weight laptops to ease portability.
Convert a simple airplane into
a fighter jet to achieve a greater speed.
Major stages in New Product Development
1. Idea generation2. Idea screening3. Concept development and concept testing
4. Marketing strategy development5. Business analysis6. Product development7. Test Marketing8. Commercialization
1. Idea Generation
Search many ideas through internal sources and external sources such as: Employees Research and Development Management Customers Competitors Suppliers
2. Idea Screening
Screening new product ideas in order to spot the good and drop the poor ones.
3. Concept Development and Concept Testing
Testing new product concept with a group of target consumers to find out if it has STRONG APPEAL.
4. Market Strategy Development
Designing an initial marketing strategy for a new product.
5. Business Analysis
Review of sales, cost, and profit projections and to find out if it satisfies company objectives.
6. Product Development
Developing the product concept into a physical product to ensure the product idea can be turned into workable product.
7. Test Marketing
To test how consumers and the dealers react to handling, using, and purchasing the real product.
8. Commercialization
Introducing a new product into the market; final decision is taken to launch the product.
Product Life Cycles and Marketing Strategies
Product Life CycleThe progression of a product
through four stages: introduction, growth, maturity, and decline.
MP3s
DVDs
CDs
Cassettes
LP records
The Four Stages of the Product Life Cycle
FIGURE 10.2
The Product Life CycleIntroduction Stage
The stage of a product’s life cycle when New product is launched, the sales are low, Profit is small, Cash flow is negative, (Situation where the cash outflows
during a period are higher than the cash inflows during the same period)
few competitors. Distribution is limited, Price is high. Product is basic. Examples: E books, personal digital video, recorders
The Product Life Cycle (cont’d)
Growth Stage The stage of a product’s life cycle when Sales starts climbing Profit increases, Cash flow is moderate, new competitors enter the market, Opportunity for large-scale profit. Examples cell phones, internet shopping
sites
Maturity Stage The stage of a product’s life cycle when Sales growth slows, more competitors, Customers are more, Product is mass marketed, Cash flow is high, and Profits decline. Examples. Microwave ovens, personal computers
The Product Life Cycle (cont’d)
Decline The stage of a product’s life cycle when Sales decline fast, Shift in customer tastes, improved technologies and increased competition, Price cutting, low cash inflow and profit. Kodak’s film products. Because of digital
photography
The Product Life Cycle (cont’d)
The World’s Most Innovative Companies
AppleGoogleToyotaGeneral ElectricMicrosoftProcter & Gamble3MWalt Disney
IBMSonyWal-MartHonda StarbucksTargetBMWSamsung