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MGTA02H3 (363)
Chapter 6

Chapter 6 notes

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Department
Management (MGT)
Course
MGTA02H3
Professor
Chris Bovaird
Semester
Winter

Description
thIbiyemi Balogun Chapter 612 Textbook notesApril 15 2011Chapter 6 The 4Ps ProductWhat is a product A Product is a good or service that an organization offers to the public that has benefits and features to impress the customersThe Value Package It is the total value of the products features and benefits Product marketed as a bundle of valueadding attributes including a reasonable costFeature The qualities both tangible and intangible that a company builds into its productsBenefit This is satisfaction one gets from the products features that make it desirableMore and more companies are trying to compete which each other by offering better and more improved value packages to their customers They enhance the features that directly affect the customers interest and not necessarily the technical aspects of thingsClassification of Goods and Services 2 groups Consumer products and Industrial productsConsumer Products These are goods sold directly to consumers and are made for consumers specifically They are marketed in different ways than industrial products There are 3 main categories that reflect consumers behavior1Convenience goods these are goods and services that consumed very rapidly and are for the most part inexpensive Eg milk and newspapers fat food services2Shopping goods These are more expensive and brands are usually compared to see the ones with the most features and they are less frequently purchased Evaluate alternatives in terms of what they are looking for in the product Eg stereos and insurance3Specialty goods Extremely important and expensive purchasesConsumers usually know what they want and do settle for substitutes They would look for exactly what they want Eg Wedding gown and catering serviceIndustrial Products These are products that are specially made for industrial purposes and are sold to highly specialized companies Usually divided into 2 categories1Expense items materials that are used up within a year and are used directly in the production process of things Eg bulk loads of tea that are going to be processed2Capital items expensive and long lasting Expected to live for several years Capital goods are buildings etc while Capital services are those with which longterm commitments have been madeeg Legal servicesthIbiyemi Balogun Chapter 612 Textbook notesApril 15 2011The Production Mix These are all the goods and services a company has available for salesProduct Line This is group of similar products intended for a similar group of buyers who will use them in a similar fashion For instance starts out producing iced tea and then branches out into flavored tea to reach more tea drinkers That way they have multiple product lines that help during slow sale periods of one particular productDeveloping New Products Companies have to continually reinvent their products to satisfy changing tastes in the consumers It takes a long time to develop products and its usually very risky because you never know if the consumers are going to understand the products It takes about 50 ideas to generate an idea that reaches the markets Only a few are successful in any case Due to the increase in the numbers of new products in the market The faster a product moves from lab to the marketplace increases the chances of successSpeed to market A strategy of introducing new products to respond quickly to customer andor market changes7 step Development Process1Product ideas Searching for product ideas can come from consumers sales force research and development etc Actively seek out ideas and reward people with successful ideas2Screening elimination of products ideas that dont mesh with companies ideas and feasibility Marketing team Engineering etc are involved in this process3 Concept testing They use market research to ask consumers what they think Forms can identify benefits and disadvantages and price level setting4Business Analysis They start to make comparisons of costs vs benefits to see if the product would meet profitability targets5Prototype development Product ideas take shape and are engineered to see what the potential production problems could be It is extensive and time consuming to create prototypes6Production testing and test marketing using information from the prototype a limited number of the product is made and tested internally It is then available in limited quantities to areas to see their reactions Very expensive stage because campaigning is done to limited target area
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