Chapter 11

Products and Product Concepts

The Marketers Bag of Tools

Price

Product

Promotion

Distribution

The Marketers Bag of Tools

Price

Product

Promotion

Distribution

Questions
What is a product? What is not a product? What are the basic product concepts? Vocabulary? What are some of the basic tools marketers use to help them work with products?

What is a PRODUCT?
Anything received in an exchange to satisfy a need or want

Goods Services

People Places
SIU

Ideas

Organizations
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What Is a Product?
A good, a service, or an idea received in an exchange It can be tangible (a good) or intangible (a service or an idea) or a combination of both. It can include functional, social, and psychological utilities or benefits.

Basic Products Classes

Consumer:--Products purchased to satisfy
personal and family needs

Business:--Products bought used in an

organizations operations, to resell, or to make other products (raw materials and components)

Types of Consumer Products

Convenienceinexpensive, frequently purchased items;
minimal purchasing effort

Shopping--buyers are willing to expend considerable effort

in planning and making purchases

Specialty--Items with unique characteristics that buyers

are willing to expend considerable effort to obtain

Unsought (impulse)--Products purchased to solve a

sudden problem, products of which the customers are unaware, and products that people do not necessarily think about buying
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Business Products
Installations--Facilities and non-portable major equipment Accessory Equipment--used in production or office
activities

Raw Materials--Basic natural materials Component Parts--become part of a product Process Materials--not readily identifiable when used directly
in the production of other products (e.g. screws, knobs, handles)

MRO Supplies--Maintenance, repair, and operating items that

facilitate production and do not become part of the finished product
use in operations (e.g. cleaning, legal, consulting, and repair services)

Business Services--intangible products many organizations

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Product Concepts
A Product Item is a specific version of a product (e.g. Gillette Trac II razor)
A Product Line is a group of closely related product items viewed as a unit because of marketing, technical, or enduse considerations (e.g. all blades & razors) Product Mix is the total set of products a firm offers for sale to customers (e.g. everything Gillette sells) Product mix dimensions:
Width --the number of product lines in the mix Depth --average number of product items in each product line
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P&G Product Mix Width and Depth

Source: Reprinted by permission of Proctor & Gamble.

11 FIGURE 10.1

How Long do Products Last?

Product
Dishwasher Freezer Microwave Dryer/washer Gas water heater Furnace(gas or oil) Carpeting Paint,interior

Years
10 16 11 13 12 18 11 5-10

NFCU, 3rd quarter 2000,Homeport

The Product Life Cycle

Product Life Cycle describes the sales pattern of a product over time.
While the form of the life cycle is fairly standard, it is subject to variations. Basic Stages in the Product Life Cycle
Development Growth Maturity Decline
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The Product Life Cycle

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Product Adoption Process

1. Awareness 2. Interest
potential customer becomes cognizant that the product exists potential customer seeks information and is receptive to learning about the product potential customer considers the products benefits and decides whether to try the product potential customer examines, tests, or tries the product to determine if it meets his/her needs customer purchases the product, and can be expected to repeat the purchase when the need arises again

3. Evaluation
4. Trial

5. Adoption

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Type of Product Adopters

Source: Reprinted with permission of The Free Press, a Division of Simon & Schuster, Inc., from Diffusion of Innovations, Fourth Edition Excerpt from Diffusion of Innovations, Fourth1995, by Everett M. Rogers. Reprinted with permission of The Free Press, a by Everett M. Rogers. Copyright edition by Everett M. Rogers. division of Simon 1962, 1971, 1983 by The Free Press Rogers. Copyright 1962, 1971, 1983, by The Free Press. Copyright & Schuster, Inc. Copyright 2005 by Everett M.

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Why Do Products Fail?

Products value or features did not match customer needs Ineffective/inconsistent branding that fails to convey the right message or image to customers Technical or design problems Poor market timing Overestimation of market size Ineffective promotion Insufficient distribution
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Questions
What is a product? What is not a product? What are the basic product concepts? Vocabulary? What are some of the basic tools marketers use to help them work with products?

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