BUAD301 Lecture Notes - Lecture 8: New Product Development, Life Insurance, Takers
17 Oct 2018
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●Layers of the product concept
○A product represents all that a customer receives in an exchange
○Marketers distinguish among three distinct “layers” of the product
■Core, actual, augmented
○Ex: Automobile
■Core: transportation, carrying cargo, excitement, image enhancement
■Actual: engine size, color, body style, features, package, brand, quality
■Augmented: warranty, installation, owners manual, policies, oil changes
●How marketers classify products
○Based on how consumers feel about, purchase, and consume products
■How long they last, how consumers buy them, how businesses buy them
○How long do products last?
■Durable goods: consumer products that provide benefit over period of time
●Cars, furniture, appliances
■Nondurable goods: consumed short term
●Magazine, sushi
○How do consumers buy products?
■Convenience products: typically nondurable bought with minimal effort
●Staples (milk, bread), impulse/emergency products, CPG, FMCG
■Shopping products: consumers spend time and effort to gather info
●Computers, tv’s, appliances
●Consumers likely to compare alternatives before they buy
■Specialty products: unique characteristics regardless of price
●Extended problem-solving, a lot of effort to choose
●Consumers tend to be very loyal
■Unsought products: consumer has little awareness/interest until need arises
●retirement plans, life insurance
●Often requires a good deal of advertising or personal selling
○How do businesses by products?
■Equipment: aka installations or capital equipment, used in daily operations
■Maintenance, repair, operating: consumed relatively quickly
■Raw materials: fishing, lumber, agriculture, mining, used in final product
■Processed materials: produced when they transform raw materials
■Specialized services: essential but are no a part of actual production
■Component parts: manufactured goods of finished items to complete good
●The process of innovation
○An innovation is anything customers perceive as new or different
■May be a minor or major alteration to an existing good
○Types of innovations: dynamically continuous, discontinuous, continuous
Document Summary
A product represents all that a customer receives in an exchange. Marketers distinguish among three distinct layers of the product. Core: transportation, carrying cargo, excitement, image enhancement. Actual: engine size, color, body style, features, package, brand, quality. Augmented: warranty, installation, owners manual, policies, oil changes. Based on how consumers feel about, purchase, and consume products. How long they last, how consumers buy them, how businesses buy them. Durable goods: consumer products that provide benefit over period of time. Convenience products: typically nondurable bought with minimal effort. Staples (milk, bread), impulse/emergency products, cpg, fmcg. Shopping products: consumers spend time and effort to gather info. Consumers likely to compare alternatives before they buy. Specialty products: unique characteristics regardless of price. Extended problem-solving, a lot of effort to choose. Unsought products: consumer has little awareness/interest until need arises. Often requires a good deal of advertising or personal selling. Equipment: aka installations or capital equipment, used in daily operations.
