MGTA04
Chapter 6: The 4Ps – Product
Features: the qualities, both tangible and intangible, that a company builds into its products
Value package: product marked as a bundle of value-adding attributes, including reasonable cost
In buying a product, consumers are also buying an image and a reputation.
2 types of buyers: buyers of consumer products and buyers of industrial products
Classifying Consumer Products
Convenience goods/ services: relatively inexpensive consumer goods or service that are bought and
used rapidly and regularly, causing consumers to spend little time looking for them or comparing their
prices
Ex: milk, newspaper, fast-food
Shopping goods/ services: moderately expensive consumer goods or services that are purchase
infrequently, causing consumers to spend some time comparing their prices
Ex: stereos, tires, insurance
Specialty goods: very expensive consumer goods or service that are purchased rarely, causing
consumers to spend a great deal of time locating the exact item desired
Classifying Industrial Products
Expense item: relatively inexpensive industrial goods that are consumed rapidly and regularly
Ex: bulk loads of tea processed into tea bags
Capital items: expensive, long-lasting industrial goods that are used in producing other goods or services
and have a long life
Purchases for employ food services, building and equipment maintenance, or legal services
Involve decisions by high-level managers
Ex: expensive building, fixed equipment, accessory equipment
Product Mix: the groups of products a company has available for sale
Product line: a group of similar products intended for a similar group of buyers who will use them in a
similar fashion
Company may extend their horizons and indentify opportunities outside existing product lines
o Multiple (diversified) product lines
o Multiple product lines allow a company to grow rapidly and can help to offset the
consequences of slow sales in any one product line
The Time Frame of New Product Development
Companies often face multi-year time horizons and high risks when developing new products
Product Mortality Rates
Only a few of these survivors become successful products
Many great ideas have failed as products