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MGTA02H3 (136)

Chapter 6.doc

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

New product development is a critically important activity for companies because all products eventually reach the end of their life cycles and expire It is virtually impossible to focus on just one element of the marketing mix without having to deal with other marketing variablesWhat is a productIn developing the marketing mix for any products whether ideas goods or services marketers must consider what consumers really buy when they purchase products when they purchase productsFeatures The qualities both tangible and intangible that a company builds into its products In order to attract buyers features also must provide benefitsEG The mower produces an attractive lawn The owners pleasure in knowing that the mower is nearby when needed is an intangible rewardThe Value PackageValue package Product marketed as a bundle of value adding attributes including reasonable cost Increasingly buyers expect to receive products with greater value with more benefits at reasonable costsEG Although the computer include hysical features like processing devices and other intangibles that add value by providing benefits that increase the customers satisfactionConsumers are also buying an image and reputationBusinesses are completely basis on enhancing the value packages They find theat the addition of a simple new service often pleases customers far beyond the cost of providing itClassifying the goods and servicesOne way to classify product is according to expected buyers They fall into two categoriesBuyers of consumer productsBuyers of industrial productsClassifying Consumer Products It is commonly divided into 3 categories that reflect buyers behavior a Conveniences b Shopping and c Specialty productsConvenience goods or servicesConvenience goods and services are consumed rapidly and regularly Relatively inexpensive cons and are purchased frequently and with little expenditure of time and effort to look for them and compare their price
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