Study Guides (256,436)
CA (124,640)
UTSC (8,077)
MGT (341)
MGTA02H3 (72)

study guide

14 Pages
116 Views

Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird

This preview shows pages 1-3. Sign up to view the full 14 pages of the document.
Chapter 6: Developing and Promoting Goods and Services
WHAT IS A PRODUCT?
-markets must consider what consumers really buy when they purchase products
-this way, they can plan their strategies effectively
The Value Package
-customers get value from benefits, features, and even intangible rewards associated with the
products
-features: the qualities, both tangible and intangible, that a company builds into its products
-to attract buyers, features must provide benefits
-value package: product markets as a bundle of value-adding attributes, including reasonable
costs
-buyers expect to receive products with a greater value—with more benefits at reasonable costs
-most items in the value package are services or intangibles
-services and intangibles add value by providing benefits that increase the customers satisfaction
-products are just more than just visible features and benefits
-consumers are also buying an image and a reputation
-brand name, packaging, labelling, and after-the-purchase service are also essential parts of the
marketer’s products
-ads do not usually emphasize the technical features of its products, not even the criteria that
companies
-ads usually focus on the customer-oriented benefits
-benefits are being marketed as part of a complete value package
-a new service often pleases customers more than the cost of providing it
-making the purchase transaction more convenient, adds value by reducing long waits for
customers
Classifying Goods and Services
-one way to classify a product is according to expected buyers
-buyers fall into two groups: buyers of consumer products, and buyers of industrial products
Classifying Consumer Products
-consumer products are divided into three categories that reflect buyers behaviour: convenience,
shopping, and specialty products
www.notesolution.com
Convenience goods and convenience services are consumed rapidly and regularly. They
are inexpensive, purchased frequently, with little expenditure of time and effort. Example,
milk, eggs, fast-food restaurants
Shopping goods and shopping services are more expensive and purchased less
frequently. Consumers compare brands, and evaluate alternatives in terms of style, colour,
price, and other criteria. Example, stereos, tires, insurance, pension
Speciality goods and speciality services are extremely important and expensive.
Consumers usually decide on what they want without substitutes. Consumers will spend a
lot of money and time to get a specific product. Example, wedding gown, catering
services for wedding receptions
Classifying Industrial Products
-depends on how much they cost and how they will be used
-divided into two categories: expense items and capital items
Expense items are relatively inexpensive industrial goods that are consumed rapidly and
regularly. Example, bulk loads of tea processed into tea bags
Capital items are expensive, long-lasting industrial goods that are used in producing
other goods or services and have a long life. Example, buildings and water towers. Capital
services are those for which long-term commitments are made. Example, purchases for
employee food services and legal services. Capital items involve decisions by high level
managers
The Product Mix
-product mix: the group of products a company has available for sale
Product Lines
-product lines: a group of similar products intended for a similar group of buyers who will use
them in similar fashion
-begin with a single product, and as time progresses the initial product fails to suit every
consumer shopping for the product type
-to meet market demand, marketers introduce similar products
-companies may extend their horizons and identify opportunities outside existing product lines
-this results in multiple (or diversified) product lines
-for example, a business or industry services are added
-multiple product lines allow a company to grow rapidly
-they also help to offset the consequences of slow sales in any one product line
www.notesolution.com
DEVELOPING NEW PRODUCTS
-no firm can count on a single successful product to carry it forever
-there is competition and shifting consumer preferences to worry about
-even basic products are constantly renewed
-companies who fall to keep pace with changing tastes, fall behind new products from
competitors
The Time Frame of New Product Development
-companies face multi-year time horizons and high risks when developing new products
-a company which spends millions of dollars can have a lot of uncertainty in new product
-a new product may be developed slower than expected
-a new product may suffer from a classicchicken-and-egg problem
-consumers were wait longer to purchase the product, it is expensive
-the new product may be confusing
-example, when consumers purchased HDTV over half of the consumers did not have the set-top
box which was required
Product Morality Rates
-takes about 50 new product ideas to generate one product that finally reaches the market
-only a few of these survivors become successful products
-the number of new products hitting the market each year was increased
-this causes creating a successful new product difficult
-because of the lack of space and customer demand, about 9 out of 10 products will fail
Speed to Market
-the more faster a product moves from the lab to the marketplace, the more likely it is so survive
-if new products are introduced ahead of competitors, companies establish market leadership
-speed to market: strategy of introducing new products to respond quickly to customer and/or
market changes
-a product that is three months late to the market (3 months behind the leader) loses 12 of its
lifetime profit potential
The Seven-Step Development Process
1.Product ideas.
-begins with a search for ideas for new products
-ideas can from consumers, the sale force, research and development people, or engineering
personnel
www.notesolution.com

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
Chapter 6: Developing and Promoting Goods and Services WHAT IS A PRODUCT? -markets must consider what consumers really buy when they purchase products -this way, they can plan their strategies effectively The Value Package -customers get value from benefits, features, and even intangible rewards associated with the products -features: the qualities, both tangible and intangible, that a company builds into its products -to attract buyers, features must provide benefits -value package: product markets as a bundle of value-adding attributes, including reasonable costs -buyers expect to receive products with a greater valuewith more benefits at reasonable costs -most items in the value package are services or intangibles -services and intangibles add value by providing benefits that increase the customers satisfaction -products are just more than just visible features and benefits -consumers are also buying an image and a reputation -brand name, packaging, labelling, and after-the-purchase service are also essential parts of the marketers products -ads do not usually emphasize the technical features of its products, not even the criteria that companies -ads usually focus on the customer-oriented benefits -benefits are being marketed as part of a complete value package -a new service often pleases customers more than the cost of providing it -making the purchase transaction more convenient, adds value by reducing long waits for customers Classifying Goods and Services -one way to classify a product is according to expected buyers -buyers fall into two groups: buyers of consumer products, and buyers of industrial products Classifying Consumer Products -consumer products are divided into three categories that reflect buyers behaviour: convenience, shopping, and specialty products www.notesolution.com Convenience goods and convenience services are consumed rapidly and regularly. They are inexpensive, purchased frequently, with little expenditure of time and effort. Example, milk, eggs, fast-food restaurants Shopping goods and shopping services are more expensive and purchased less frequently. Consumers compare brands, and evaluate alternatives in terms of style, colour, price, and other criteria. Example, stereos, tires, insurance, pension Speciality goods and speciality services are extremely important and expensive. Consumers usually decide on what they want without substitutes. Consumers will spend a lot of money and time to get a specific product. Example, wedding gown, catering services for wedding receptions Classifying Industrial Products -depends on how much they cost and how they will be used -divided into two categories: expense items and capital items Expense items are relatively inexpensive industrial goods that are consumed rapidly and regularly. Example, bulk loads of tea processed into tea bags Capital items are expensive, long-lasting industrial goods that are used in producing other goods or services and have a long life. Example, buildings and water towers. Capital services are those for which long-term commitments are made. Example, purchases for employee food services and legal services. Capital items involve decisions by high level managers The Product Mix -product mix: the group of products a company has available for sale Product Lines -product lines: a group of similar products intended for a similar group of buyers who will use them in similar fashion -begin with a single product, and as time progresses the initial product fails to suit every consumer shopping for the product type -to meet market demand, marketers introduce similar products -companies may extend their horizons and identify opportunities outside existing product lines -this results in multiple (or diversified) product lines -for example, a business or industry services are added -multiple product lines allow a company to grow rapidly -they also help to offset the consequences of slow sales in any one product line www.notesolution.com
More Less
Unlock Document


Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit