Textbook Notes (363,019)
Canada (158,147)
MGTA02H3 (361)
Chapter 6-12


39 Pages
Unlock Document

University of Toronto Scarborough
Management (MGT)
Chris Bovaird

CHAPTER 6 THE 4 PsPRODUCT WHAT IS A PRODUCT in developing marketing mix for any productsideas goods servicesmarketers must consider what consumers really buy when they purchase productsThe Value Package customers get value from various benefits features and even intangible rewards associated with a product features qualities both tangible and intangible that a company builds into its products to attract buyers features also must provide benefits mower must produce attractive lawn value package product marketed as a bundle of valueadding attributes including reasonable cost increasingly buyers expect to receive products with greater valuemore benefits at reasonable costs most items in the value package are services or intangibles that collectively add value by providing benefits that increase the customers satisfaction products more than just visible features and benefits in buying a product consumers are also buying an image and reputation today more and more firms compete on basis of enhanced value packages addition of a simple new service often pleases customers far beyond cost of providing itClassifying Goods and Services buyers fall into 2 groups buyers of consumer products and buyers of industrial products Classifying Consumer Products consumer products commonly divided into 3 categories that reflect buyers behaviour 1 convenience goodsservices are consumed rapidly and regularlyinexpensive and purchased frequently with little expenditure of time and effort 2 shopping goodsservices are more expensive and purchased less frequently thanconvenience goods and servicesconsumers compare brands sometimes in diff storesmay also evaluate alternatives 3 specialty goodsservices are extremely important and expensive purchasesconsumers decide on what they want and will accept no substitutes Classifying Industrial Products divided into 2 categories 1 expense items materials and services that are consumed win a year by firms producing other goods or supplying services used directly in production process 2 capital items permanentexpensive and long lastinggoods and serviceshave expected lives of more than a yearthose for which longterm commitments are madeinvolve decisions by highlevel managersThe Product Mix product mix group of products a company has available for sale consumer or industrial Product Lines product line group of similar products intended for a similar group of buyers who will use them in a similar fashion companies have extended horizons and identified opportunities outside existing product lines multiple or diversified product lines multiple product lines allow company to grow rapidly and can help to offset the consequences of slow sales in any one product lineTHE PRODUCT LIFE CYCLE product life cycle concept that the profitproducing life of any product goes through cycle of introduction growth maturity leveling off and declineStages in the Product Life Cycle 1 Introduction begins when product reaches marketplacemarketers focus on making potential consumers aware of product and its benefitsextensive promotional and development costsprofits nonexistent 2 Growth if new product attracts and satisfies enough consumers sales begin to climb rapidlyproduct beings to show profit 3 Maturity sales growth begins to slowproduct earns highest profit level early in this stageincreased competition eventually leads to price cutting and lower profitstowards end of stage sales start to fall 4 Decline sales and profits continue to fallnew products in intro stage take away salescompanies remove or reduce promotional support but may let product linger toprovide some profitsExtending Product Life An Alternative to New Products foreign markets offer 3 possibilities for lengthening product life cycles 1 product extension an existing product is marketed globally instead of just domestically 2 product adaptation product is modified for greater appeal in diff countriesinvolves product changes so more costly than product extension 3 reintroduction means reviving for new markets products that are becoming obsolete inolder onesIDENTIFYING PRODUCTS developing a products features is only part of a marketers job marketers must also identify products so that consumers recognize them important tools for this task are branding packaging and labelingBranding Products branding use of symbols to communicate qualities of a particular product made by a particular producer brands designed to signal uniform quality customers who try and like product can return to it by remembering its nameAdding Value through Brand Equity widely known and admired brands are valuable bc of their power to attract customers brand equity degree of consumers loyalty to and awareness of a brand and its resultant market share higher brand equitybetter brand adds value to a product so marketers manage brand names to increase that valueBrand Loyalty brand loyalty customers recognition of preference for and insistence on buying a product with a certain brand name exists at 3 levels brand awarenesscustomers recognize brand name brand preferenceconsumers have favourable attitude toward product brand insistenceconsumers demand productwilling to go out of their way to get itTrademarks Patents and Copyrights trademark exclusive legal right to use a brand name granted for period of 15 years but only if company continues to protect its brand name patent protects an invention or idea for period of 20 years copyrights exclusive ownership rights granted to creators for tangible expression of an idea apply to tangible expressions of an idea not to idea itselfPackaging Products packaging physical container in which a product is sold including the label serves as an instore advertisement that makes product attractive clearly displays brand identifies product features and benefits and reduces risk of damage breakage or spoilageLabelling Products label part of a products packaging that identifies products name and contents and sometimes its benefits also promotes products by getting consumers attention label describes product provides info about nutritional content directions for use disposal
More Less

Related notes for MGTA02H3

Log In


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


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.