Business 4.3 Product
• A product can be defined as any good or service that serves to satisfy the needs
and wants of customers.
Different types of products:
• Product lin Refers to a variety of the same product that a business produces for
customers of a particular market.
• Product mix Describes the variety of the different product lines that a business
produces. It is also known as product assortment
• Marketing has a large role in adding value to a product, through the use of
production differentiation methods such as quality, packaging and/or branding.
• Functional value refers to what the product actually does for the customer.
• The second form of value added is called emotional value.
• Consumer products can be further classified into four categories:
• Fast moving consumer goods which are everyday convenience products that are
sold in retail outlets such as supermarkets
• Consumer perishables are products that do not last for a very long time such as
fresh flowers or fresh seafood
• Consumer durables are products that are purchased irregularly because they tend
to last for a relatively long time and take up a relatively large proportion of a
• Producer products or industrial goods are those that are purchased by businesses
rather than aimed at consumers. They are used in the production process to help
the running of the business.
• In marketing terms the term design does not only refer to the physical appearance
of a product. Instead design refers to the process of adding value to a product.
• This can be done through a value analysis triangle, which sees design consisting
of three components: the physical design, performance and reliability of product.
These three elements are analyzed carefully in order to see where and how value
can be added to a product.
• Tom peters, management guru and author suggests an alternative model for
gaining a competitive advantage again by adding value to a product. Peters suggested that a small increase in costs of production can generate a
disproportionate increase in value added or customer appeal. The question that
managers must address is how to sustain or develop this competitive advantage.
This can be done by any combination of four methods:
• Raise – Look at the features of a product that should be improved to exceed
• Create – examine the unique features of a product that should be included to
• Reduce – investigate the features of a product that can or should be cut back
• Eliminate – Explore the ways in which certain features of a product can be
• Stages of new product development :
• Market research
• Product development and testing prototypes
• Feasibility study
• Sources of new product development
• Market research – This refers to the process of business collecting and analyzing
relevant data and information to better meet the needs of their customers.
• Product extensions – This refers to the use of existing brands, especially the more
successful ones, in order to design and develop new product
• Research and development – technological and scientific research helps to
generate a flow of new ideas and pro