Business Plan and Consumer Products

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Questions and Answers

Which type of product is characterized by routine purchases and low prices?

Specialty products

Shopping products

Impulse products

Convenience products (correct)

What is a key characteristic of specialty products?

Products not typically considered for purchase

Items to which consumers will exert special effort (correct)

Low-priced items purchased habitually

Products requiring minimal consumer research

Which of these options is NOT a type of consumer product?

Rented-goods services (correct)

Impulse products

Unsought products

Durable goods

What defines impulse products in the context of consumer behavior?

Products consumers do not plan to buy Signup and view all the answers

What distinguishes shopping products from convenience products?

They require more effort and research before purchase Signup and view all the answers

Which group of products is typically characterized by consumer unawareness or reluctance to purchase?

Unsought products Signup and view all the answers

What type of goods are described as being used over a long period of time?

Durable goods Signup and view all the answers

Which of the following best represents attribute-based shopping products?

Products evaluated for their features and performance Signup and view all the answers

What is an important characteristic of a successful entrepreneur regarding their approach to learning?

They have a strong willingness to learn. Signup and view all the answers

Which of the following competencies is essential for an entrepreneur in making decisions?

Risk assessing Signup and view all the answers

Which competency involves effectively working with diverse groups of people?

Interpersonal skills Signup and view all the answers

What role does 'optimism' play in entrepreneurial success?

It fosters resilience in challenging situations. Signup and view all the answers

In which area does a business plan primarily assist an entrepreneur?

Step-by-step guidance to realize a business idea Signup and view all the answers

What is a crucial aspect of adaptability that entrepreneurs must possess?

A unique adaptability to make decisions without complete information Signup and view all the answers

What is the primary focus of a depth strategy in product strategy?

Serving one segment with multiple products Signup and view all the answers

Which of the following competencies does NOT directly fall under the core competencies in entrepreneurship?

Project Management Signup and view all the answers

Which statement is true regarding the impact of entrepreneurship on the Philippine economy?

It helps uplift its performance in worldwide competition. Signup and view all the answers

Which pricing strategy focuses on building consumer loyalty by selling key items at low prices?

Leader pricing Signup and view all the answers

What does a penetration pricing strategy aim to achieve?

Capture customers through low prices Signup and view all the answers

How does a demand-based price strategy determine pricing?

Researching consumer desires and needs Signup and view all the answers

What does the term 'odd pricing' refer to in pricing strategies?

Utilizing pricing that ends in odd numbers to attract customers Signup and view all the answers

Which objective is associated with a sales-based pricing strategy?

Increasing market share Signup and view all the answers

What characterizes a customary pricing approach?

Prices are maintained over a long duration Signup and view all the answers

What is a potential result of using skimming pricing?

Establishing a premium brand image Signup and view all the answers

What is multiple-unit pricing primarily aimed at encouraging?

Offering discounts for bulk purchases Signup and view all the answers

Which pricing strategy typically involves offering both a basic product and a premium version?

Price lining Signup and view all the answers

What does exclusive distribution refer to in the context of channel intensity?

Employing a limited number of middlemen in a specific area Signup and view all the answers

Which of the following best defines indirect channel distribution?

Transfer through independent intermediaries Signup and view all the answers

What is the primary function of physical distribution?

Efficient delivery of products to designated places Signup and view all the answers

What is the main purpose of geographic pricing?

To set prices based on buyer distance from the seller Signup and view all the answers

Which distribution channel involves manufacturers directly selling to end-users without intermediaries?

Direct channel distribution Signup and view all the answers

What do price adjustments typically reflect in the pricing strategy?

Changes in consumer demand and competitive conditions Signup and view all the answers

What is family packaging primarily aimed at achieving?

Creating a uniform appearance for all products Signup and view all the answers

Which of the following best describes reuse packaging?

Packaging that can serve multiple purposes after use Signup and view all the answers

In the context of positioning, what does the term 'niche' refer to?

A specialized segment of the market Signup and view all the answers

Which of the following statements accurately describes the role of branding?

Brands help consumers recognize product quality Signup and view all the answers

What is a key advantage of co-branding?

It creates a broader customer appeal Signup and view all the answers

What does the Producer’s Strategy primarily focus on?

Superiority of their own product in the market Signup and view all the answers

Which of the following is a disadvantage of co-branding?

Difficult coordination between brands Signup and view all the answers

What is the primary focus when positioning a product in the market?

Differentiation from competitors Signup and view all the answers

Study Notes

Business Plan

A business plan is a step-by-step guide which assists you in realizing your business idea

Types of Products

Durable goods are physical products that are used over a long period of time
Non-durable goods are physical products that are quickly and easily consumed or worn out
Rented-goods services are consumer rented facilities
Owned-goods services are repair and maintenance services rendered
Non-goods services are personal services

Types of Consumer Products

Convenience products are purchased with the minimum or less effort because the buyer has knowledge of product characteristics prior to shopping
Shopping products are acquired through further knowledge and information in order to make a final purchase decision
Specialty products are items with particular brands and stores to which consumers are loyal and ready to exert special effort
Unsought products are products that consumers are either not aware of the brand existence or have awareness of the brand however not usually considering buying it

Product Strategies

Breadth strategy reaching multiple segments with a single product
Depth strategy serving one segment with multiple products
Tailored strategy customizing products for each segment

Price

The peso value an entrepreneur assigns to a certain product or service after considering its costs, competition, objectives, positioning, and target market
Sales Based strategy aims at sales growth or maximizing market share
Profit Based strategy aims at maximizing profit, earning a satisfactory return
Status Quo Based strategy aims at maintaining a good image to the community by creating projects that protect its welfare and goodwill
Broad price policy involves coordinated pricing decisions
Penetration pricing uses low prices to capture customers
Skimming pricing uses high prices to attract a market segment concerned with product quality and status

Price Strategies

Cost-based price strategy sets prices by computing costs and expenses
Demand-based price strategy sets prices after researching consumer desires
Competition-based price strategy sets prices in relation to competitors

Implementing Price Strategy

Customary pricing maintains the price over an extended period of time
Variable pricing responds to costs fluctuations or differences in demand
One-price policy sets one price for all products even though they differ in design
Flexible pricing is based on the customer’s ability to negotiate or buy power of the customer
Odd pricing uses odd numbers to attract customers
Price-quality association suggests that a high price contains high-quality materials
Prestige pricing follows the price floor and ceiling set by the government
Leader pricing sells key items at low prices to gain consumer loyalty within its product line
Multiple-unit pricing offers discounts to consumers for buying in large quantities
Price lining sells two models of different quality and features at different prices
Price bundling offers a basic product and service for one total price
Unbundled pricing sells by individual components and allows customers to decide what to buy
Geographic pricing prices are set depending on the distance of the buyer to the seller
Terms of payment price agreements including discounts, timing of payments and credit agreements

Place

Location or the medium of transaction

Channel of Distribution

People or organizations involved in the distribution process
Direct sale involves the company/firm moving goods directly to the users.
Original equipment manufacturer sales are selling a manufactured product that is later sold as a finished product to the end user.
Manufacturer’s representative is a wholesaler employed by producers and paid according to quantity sold.
Wholesalers sell to retailers or other agents for further distribution through the channel
Brokers are distributors who buy directly from wholesalers and sell to retailers or end users.
Retailers sell directly to customers in the store.
Direct mail is printed materials used in a targeted campaign to consumers.

Basic Types of Channel Distribution

Direct channel distribution transfers goods & services from manufacturer to final user or customer without the intervention of independent middleman
Indirect channel distribution transfers goods or tangible/intangible products and services from manufacturer or producers to independent intermediaries to customer .

Intensity of Channel Coverage

Exclusive distribution uses a limited number of middlemen in a geographic area.
Selective distribution organizes a moderate number of wholesalers.
Intensive distribution organizes a large number of middlemen to obtain widespread market coverage and channel acceptance

Physical Distribution

Covers the broad range of activities in connection with the efficient delivery of raw materials & finished products to designated places and designated times and in proper conditions.
Family packaging makes the package identical for all products using common features on all products
Reuse packaging designs and promotes packages which can serve other purposes when contests are consumed
Multiple packaging places several units of a product in a single container

Positioning

How the firm differentiates their product or service from those of the competitors and serving a niche

Product Positioning

Creating an image to the public presenting how they want to position the product
The target market must be well informed about a new product – what it is, what it can do, what makes it better than others, and who should buy it

Market Positioning

Innovator/Leader vs.Follower: Being an innovator/leader means being an initiator in selling a new product to the market.
Domestic vs.International/Global: Focusing only on local consumption, focuses only on the minority of markets in the country.
Quality vs.Price: Quality must be the priority in selling the product not considering how much it will cost, prioritizing the materials being used

Brand

Name or mark that is intended to identify the seller’s product and differentiate it from the product of the competitors

Brand Mark

Part of the brand that appears in the form of symbols designed in distinctive lettering or colors

Advantages of Branding

Brands make it easy to identify the product or service
Brands assure the buyer that they get the same quality of products
Brands reduce price comparison.

Branding Strategies

Producer’s Strategy employed by product manufacturers’ that dominate the greater market due to the superiority of their product
Middleman’s Strategy called as co-branding where the producer and sole distributor carry the brand name of the manufacturer and that of the middlemen

Advantages of Co-Branding

Creates broader customer appeal
Develops greater brand equity
Expands the middlemen brand in the market

Disadvantages of Co-Branding

Coordination is oftentimes difficult with the producer and the middlemen
It entails legal contracts which can be complex and difficult.

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Description

This quiz covers essential concepts related to business plans and the different types of products available in the market. It explores durable and non-durable goods, as well as various consumer products such as convenience, shopping, specialty, and unsought items. Test your understanding of these fundamental business principles.