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BUS 343 - Chapter 7.pdf

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Simon Fraser University
Business Administration
BUS 343
Robert Krider

By Mark Liangco | BUS 343 Chapter 7 (Week 6) Product concept - A product is everything that a customer receives in exchange. Three layers of a product 1. Core product - Benefits the product will provide for consumers. - Dove soap has moisturizing cream - 2. Actual product - The physical good that supplies the above benefits. - How easy is it to use, how foamy it is. - 3. Augmented product - The additions attached to the actual product - Actual product + packaging, branding, warranty etc. Embodying - Including a service with the purchase of a tangible good (i.e. warranty) New product development: 1. Visionary phase - idea generation, product concept screening, business analysis. 2. Planning and development phase - plan commercial and technical development. 3. Testing and improving phase - test marketing plan, marketing mix adjustments, launch product. Classifying Products based on how long they last: 1) Durable Goods – Consumer products that provide benefit over a period of time - Cars, computers, furniture etc 2) Nondurable Goods – Consumers products that provide benefit for a short time because they are consumed and are no longer useful. - Food, newspaper Classifying Products based on shopping behavior 1) Convenience Products – usually low prices, widely available and purchased frequently. - Like… o Staple, basic necessities  consumers do not perceive much different between brands, SUGAR, BREAD o Impulse product, people often buy on the spur of the moment  Usually because it looks interesting E.G., MAGAZINE. o Emergency product - purchased when customer is in dire need. 2) Shopping Product - consumers spend time and effort gathering information and comparing alternatives before making a purchase. o Laptops etc 3) Specialty product: usually has unique characteristics and small markets, is important to the buyer, and not widely available. o Bungee jumping 4) Unsought product - little awareness/interest until need for this product arises. Levels of involvement with these products will tend to increase as the value of the good increases. By Mark Liangco | BUS 343 Innovation - A product that consumers perceive to be new and different from existing products. Why do most companies need to innovate? - At the broadest level, to remain competitive, not get left behind o To keep up with new technology o To follow changing consumer preferences o To replace dying products o To diversify its product offering and lower risk Types of Innovation 1) Continuous
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