Product- good service or idea received in an exchange

Can be tangible or intangible

Can have functional social and psychological utilities
Product also includes supporting services like installation, product information, guarantees, warranty
Good- tangible
Service intangible
The result of application of human and mechanical efforts
Idea- concept philosophy image or issue
Provides psychological stimulation
For example MADD
Core supplemental features and symbolic and experimental benefits
Core- fulfills need
Supplemental features provide added value- installation delivery training financing
Experience- decor atmosphere variety of choices
Buyers buy the experience and benefits
Expectations made by images symbols promises process delivery

Consumer products- satisfy personal and family needs
Business products use in a firms operation to resell or to make other products
Same item can be a consumer and business product
The buyers intent determines classification
Classification influences target market
This affects distribution promotion and pricing
Products fall into 4 categories but may fall in more than one however not all consumers behave the
same but we must put the product in a way that consumers generally behave
1. Convenience products- inexpensive, frequently purchased, minimal purchasing effort
a. Bread soft drinks gum gas newspapers
b. Times is one of our most precious assets
c. Willingly choose substitute brand if favourite is not available
d. High inventory turnover and per gross margins are low
e. Package often sells the product
2. Shopping Products considerable planning effort
a. Compare stores prices features services and warranties
b. Expected to last a fairly long time
c. Purchased less frequently than convenience items
d. Not brand loyal
e. Fewer outlets than convenience products
f. Turnover is lower higher gross margins
g. May be marketed in the same location as convenience products
h. Personal selling and advertisements are more
3. Specialty products- unique characteristics, considerable planning effort
a. Will NOT accept a substitute
b. Do not compare alternatives
c. Only concern is finding the outlet
d. Limited number of outlets
e. Lower turnover higher gross margins less frequently purchased
4. Unsought Products- sudden problem of which customers are unaware and do not necessarily
think of buying
a. Must be solved
b. Emergencies
c. Auto repairs
d. Nearest outlet
e. Recognizable brands and superior functionality

Business Products are purchased on basis of goals
Functional aspects are more important than psychological
7 categories
1. Installations- facilities and non-portable major equipment
a. Can be customized or standardized
b. Expensive
c. Used long term
d. Decisions made by high-level management
e. Capitol items
f. Marketers provide services including financing training repairs
2. Accessory equipment not part of final product but used in production or office activities
a. File cabinets, motors, calculators, tools
b. Cheaper and routinely purchased
c. Expense items
d. Not intended to last long
e. Standardized
f. More outlets and les services than installations
3. Raw materials- basic natural materials that become part of the final product
a. Minerals, chemicals, agricultural products, materials from forests and oceans
b. Bought and sold to grade and specs
c. Large quantities
4. Component Parts- items that become part of the physical product, finished or ready for
assembly or items that need little processing before assembly
a. Spark plugs tires clocks brakes switches
b. Purchased to own standards or industry standards
c. Quality and on-time
5. Process materials used directly in the production of other products but not readily identifiable
a. Industry or producer standards
b. Vinegar in salad dressing
6. MRO Supplies- Maintenance Repair and Operating items that facilitate production and
operations but do not become part of the finished product
a. Paper, pencils oil cleaning agents paints
b. Buyers deal with more than one seller
c. Tide is in this category if used by hotels
d. Numerous outlets and routinely purchased
7. Business Services- intangible products used in operations
a. Financial, legal, market research, information technology and janitorial
b. Decide to provide internally or externally
c. Depends on cost and frequency of use
Must understand the relationships with all products
Product item- specific version of a product that can be designated as a distict offering among a firms
products
Product line- group of clsely related products viewed as a unit because of marketing technical or end-
use
Specific products in a product line usually represent the different needs of consumers
Marketers must understand buyers goals to develop good product lines
Firms with high market shares, high prices, limited product lines, oppourtunities exsist or low entry
barriers expand product lines
Product mix- the total or composite group that marketers make availiable to consumers
Width of product mix - # of product lines a company offers
Depth of product mix- average # of products in each product line

Product life cycle- introduction growth maturity decline
Strategies are changed according to current phase
1. Introduction- initial stage, first appearance where sales are 0 and profits are negative
a. Few introductions are revolutionary inventions because of risk
b. The mnore market oriented the more likey it will launch innovative new to the market
products
c. Potential buyers must be made aware
d. Media appearancs and giveaways
e. Initial price may have to be high to recoup development costs
f. Less than 10% of new products succed
g. Be aware and Make corrections early
2. Growth- sales rise rapidl profits reach a peak and start to decline
a. Critical to success
b. Competitor reactions
c. Brand loyalty
d. Aggressive emulators
e. Develop niche
f. Corrective actions to competitors
g. Aggressive pricing
h. Aggressive segmentation
i. Introducing variations
j. Gaps in geographic market are filled
k. New outlets are easier to find
l. Distribution is improved
m. Promotion expenditure is lower
n. Lower prices and production costs
3. Maturity sales curve peaks and declines and profits fall
a. Intense competition
b. Many brands are now in market
c. Expand globally
d. Aapt to more precisely fit needs
i. Develop new products
ii. Increase usage among current users
iii. Increase # of users
iv. Add features
v. Change package sizes
vi. Increase quality
vii. Change promotion , price, or distribution
e. Three goals
i. Generate Cash flow
ii. Maintain Share of Market
1. Can we improve or drop out?
iii. Increase share of customers
1. % of each customers needs the product is fulfilling
2. Add services
iv. Encourage dealers to support the product
v. Moderate to large promotion expenditure
vi. Price may have to increase if costs have gone up
4. Decline- sales fall rapidly
a. Prune items from product line
b. Cut promotion
c. plan to phase out
d. May reposition
e. Competition has increased substitution and switching
f. Do not change design or attributes
g. Social changes like greener bulbs
h. Unprofitable outlets are weeded out
i. Liquidator outlets
j. Advertise special offers
k. Harvesting- gradual reduction in expenditures and less resource intensive marketing mix
l. Divesting- withdraws all marketing support but sells until losess start
m. Firm is rarely tied to one product
Acceptance of new product can have a very long product adoption process
Produc adoption process 5 stage awareness interst evaluation and adoption
Rejection may occur at any stage
Adoption and rejection may be temporary
Company must promote the product for awareness to occur
Quality control and garuntees reinforce buyer opinion
Production and distribution must be matched to patterns of adoption
There are always non-adopters and adopters of differeing speeds
1. Awareness- buyer becomes aware
a. Have little information
b. Not concerned with finding more info
2. Interest buyer seeks information and is receptive to information
3. Evaluation buyer considers the benefits and decides whether to try it
a. Decide if the product meets criteria
4. Trial - buyer examines or tests the product to see if it meets their needs
5. Adoption buyer purchases the product and is expected to use it again when the same need
arises
a. Choose a specific product
b. Rejection may occur
Five speeds of adoption
1. Innovators- first adopeters
2. Early adopters choose carefully and are the people to check with by later adopters
3. Early majority adopt just prior to the average adopter, cautious
4. Late majority- skeptics who adopt when they feel nessecary for social or economic reasons
5. Laggards- adopters who distrust new products, product may already be replaced
1/3 or 80-90% of new products fail
Consumer products fail more often
Failure because of mismatched needs to products
Lack the features customres wantineffective or inconsistent branding
Tech or design problems
Poor timing
Overestimation of market size
Ineffective promotion
Insufficient distribution
Absolute failure-unable to recover initial costs, deleted
Relative failure-turns a profit but does not reach objectives
Can reposition or improve relative failue
Most important is to provide a significant benefitto a sizeable customer base
Follow systematic customer focused plan new products with more features easy operation or improved
technology advantages are more likely to succeed