CLEP Principles of Marketing Study Notes

3 process materials products used directly in the

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3. Process Materials - products used directly in the production of other products. Process materials are different from component materials in that they form an indistinguishable part of the finished product. 4. Major Equipment (aka: Installations) - includes large tools and machines used for production purposes. Are very expensive, and are not purchased frequently, so the buying decision process is very complex. 5. Accessory Equipment - used in production or office activities, and are purchased routinely. Not as expensive as major equipment. It is standardized, and does not require as complex a buying decision process. Examples of accessory equipment include desktop computers and calculators. 6. Consumable Supplies (aka: Operating Supplies) - do not become part of the finished product, but facilitate production and operations. A re products such as office supplies, soap, oils and grease, etc . They are usually cheap, purchased frequently, and the buying decision process is very simple. Family Life Cycle - factors such as marital status, and the presence and age of children combine to form a variable used to segment markets. Used to segment markets, because persons in a particular life cycle stage may have very specific needs. For example, a divorced woman with children is in a stage of the Family Life Cycle which makes her a likely target for life insurance. Knowing where a family is in this Cycle can help determine what their product needs are. Services - tasks performed by one individual or firm for another. Services can be broken down into consumer services and industrial services depending on who the customer is. Examples are financial, legal, and janitorial services. Product line -includes a group of closely related product items that are considered a unit because of marketing, technical, or end- use considerations. The specific product items in a product line usually reflect the desires of different target markets or the different needs of consumers . Product mix - consists of all the products that an organization makes available to customers. A new product - can either be an innovative product that has never been sold by any organization, or it can be a product that a given firm has not marketed previously. A new product can either be genuinely new, or it can simply be a product that a certain company has never offered before; for example, IBM making cars. 5 steps to the New-Product Development Process to include: 1. Idea Generation - where organizations seek product ideas that will help them achieve their objectives. Can involve market research, brainstorming , and many other internal and external sources for new product ideas. 2. Product Screening where ideas for new products go through an initial evaluation and are subjected to consumer scrutiny. Made up of Product Screening and Concept Testing. Product Screening involves weeding out the ideas which do not meet the company's standards . Concept Testing takes the remaining ideas and subjects them to the scrutiny of potential customers.
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