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Chapter 6

Chapter 6 Notes

7 Pages

Management (MGT)
Course Code
Chris Bovaird

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5. Prototype Development: Production of a preliminary version of the product
6. Product Testing and Test Marketing: Product is tested internally and becomes available to the
test markets
7. Commercialization: Full-scale production and marketing of the product
Variations in the Process for Services
The development of services differ in the following steps:
1. Service Ideas: involves service package: identification of the tangible and intangible features
that define the services
5. Service Process Design: Selecting the process, identifying worker requirements, and
determining facilities requirements so that the service can be effectively provided
The Product Life Cycle
Product Life Cycle (PLC): The concept that the profit-producing life of any product goes through
a cycle of introduction, growth, maturing and decline
Stages in the Product Life Cycle
1. Introduction: Stage begins when the product reaches the marketplace. Marketers focus on
making potential consumers aware of the costs and its benefits and because of extensive
promotional and development costs, profits are nonexistent
2. Growth: If the product attracts and satisfies enough consumers, sales begin to climb rapidly.
The product begins to show profit, while other firms in the industry move to introducing their
own versions
3. Maturity: Sale growth begins to slow. Although the product earns its highest profit level early
in this stage, increased competition eventually leads to price cutting and lower profits. Toward
the end of the stage sales start to fall.
4. Decline: Sales and profits continue to fall. New products in the introduction stage take away
sales. Companies remove or reduce promotional support but may let the product linger to
provide some profit.
Extending the product life can occur in the following ways:
1. Product Extension: Existing, unmodified product that is marketed globally
2. Product Adaptation: Product modified to have greater appeal in foreign markets
3. Reintroduction: Process of reviving for new markets products that are obsolete in older ones
Identifying Products

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