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Chapter 16
Value package โ€“ Product marketed as a bundle of value-adding attributes, including
reasonable costs
Classifying consumer products
Convenience goods/services โ€“ relatively inexpensive consumer goods or services that are
bought and used rapidly and regularly, causing consumers to spend little time looking for
them or comparing their prices
Shopping goods/services โ€“ moderately expensive consumer goods or services that are
purchased infrequently, causing consumers to spend some time comparing prices and such
Specialty goods/services โ€“ very expensive consumer goods or services that are purchased
rarely, causing consumers to spend a lot of time comparing prices
Classifying industrial products
Expense items โ€“ materials and services that are consumed within a year by firms
producing other goods or services
Capital items โ€“ expensive, long-lasting industrial goods that are used in producing other
goods or services and have a long life
๎€Buildings, fixed equipment (water towers, baking oven), accessory equipment
(computers, airplanes)
Capital services โ€“ services for which long-term commitments are made
๎€Employee food services, building and equipment maintenance, legal services
Product mix โ€“ the group of products a company has available for sale
Product line โ€“ a group of products that are closely related because they function in a similar
manner or are sold to the same customer group, who will use them in similar ways
Developing New Products
Speed to market โ€“ strategy of introducing new products to respond quickly to customer
and/or market changes
The seven-step development process
๎€Product development begins with a search for ideas for new products
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oService package โ€“ identification of the tangible and intangible features that
define a service
๎€Screening โ€“ this stage is an attempt to eliminate all product ideas that do not mesh
with the firmโ€™s abilities, expertise, or objectives
๎€Concept testing โ€“ once ideas have been culled, companies use the market research to
solicit consumersโ€™ input
๎€Business analysis โ€“ this involves developing a comparison of costs and benefits for
the proposed product
๎€Prototype development โ€“ using input from the concept-testing phase, engineering
and/or research and development produce a preliminary version of the product
oService process design โ€“ involves selecting the process, identifying worker
requirements, and determining facilities requirements
๎€Product testing and test marketing โ€“ the company begins limited production of the
item
๎€Commercialization โ€“ if test-marketing results are positive, the company will begin
full-scale production and marketing of the product
The Product Life Cycle
Product life cycle (PLC) โ€“ based on the idea that products have a limited profit-producing
life
Stages in the PLC:
๎€Introduction: the introduction stage begins when the product reaches the
marketplace
oBecause of extensive promotional and development costs, profits are non-
existent
๎€Growth โ€“ if the new product attracts and satisfies enough consumers, sales begin to
climb rapidly
๎€Maturity โ€“ sales growth begins to slow. Although the product earns its highest profit
level early in this stage, increased competition eventually leads to price cutting and
lower profits
๎€Decline โ€“ sales and profits continue to fall
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Document Summary

Value package product marketed as a bundle of value-adding attributes, including reasonable costs. Convenience goods/services relatively inexpensive consumer goods or services that are bought and used rapidly and regularly, causing consumers to spend little time looking for them or comparing their prices. Shopping goods/services moderately expensive consumer goods or services that are purchased infrequently, causing consumers to spend some time comparing prices and such. Specialty goods/services very expensive consumer goods or services that are purchased rarely, causing consumers to spend a lot of time comparing prices. Expense items materials and services that are consumed within a year by firms producing other goods or services. Capital items expensive, long-lasting industrial goods that are used in producing other goods or services and have a long life. buildings, fixed equipment (water towers, baking oven), accessory equipment (computers, airplanes) Capital services services for which long-term commitments are made. employee food services, building and equipment maintenance, legal services.

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