chapter 10 notes - Chapter 10 Notes Developing New Products...

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Chapter 10 Notes Developing New Products and Services Product : good, service, or idea consisting of tangible and intangible features that satisfies consumers and its received in exchange for money or some other unit of value. o Tangible: physical characteristics (color) o Intangible: becoming healthier or wealthier (local art museum makes you enlightened) The Variations of Products Product Line and Product Mix Product Line : group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range. o Nike’s product lines are shoes and clothes. Within each product line is the product item, a specific product as noted by a unique brand, size, or price. o Downy fabric softener: 20oz or 40oz. Each size is considered a separate item or stock keeping unit (SKU). SKU : unique identifying number that defines an item for ordering or inventory purposes. Product Mix : all the product lines offered by a company. o Fortune Brands sporting equipment (Titleist) or office supplies (Swingline staplers). Classifying Products Type of User Consumer Goods : products purchased by the ultimate consumer. Business Goods : products that assist directly or indirectly in providing products for resale. o Difficult to classify (i.e. Apple Computers) All depends on marketing scheme. Consumer: through store Business: by sales person with discounts for larger quantity purchase. Degree of Tangibility Nondurable : an item consumed in one or few uses (food, fuel) Durable : usually lasts over an extended number of uses (appliances, cars) Services : intangible activities or benefits that an organization provides to consumers in exchange for money or something else of value. Each of these needs a different marketing scheme. o Nondurable: advertising and wide distribution o Durable: personal selling and answering consumer questions o Services: communicate to buyers The Uniqueness of Services Services account for 40% of GDP. Four I’s of services: intangibility, inconsistency, inseparability, inventory. Intangibility Services can’t be held, touched, or seen before a purchase. Much more difficult to evaluate. Marketers try to show consumers benefits to assist evaluation. Inconsistency Quality of service is inconsistent due to provider’s capabilities and job performance. Inseparability Consumers cannot distinguish the deliverer of service from the service itself. o University students: great lectures, poor counseling services.
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