Product Definitions and Types Quiz

Product Defined

• A product is anything—a good, service, or idea—that offers value to target customers.
• It comprises a bundle of tangible and intangible attributes, satisfying needs and wants in exchange for something of value.

Components of a Product

• Core Product: The fundamental benefit the buyer receives.
• Formal Product: The actual physical or perceived characteristics (quality, features, styling, branding, packaging).
• Augmented Product: Supporting items like after-sales service, warranty, delivery, or installation.

Types of Products

• Consumer Products: Goods purchased for personal, family, or household use.
  • Convenience Products: Products purchased frequently and easily.
  • Shopping Products: Products bought less frequently and compared based on features and price.
  • Specialty Products: Products with unique characteristics and high price-point, requiring special effort from buyers.
  • Unsought Products: Products buyers do not initially seek, but may become necessary or desirable (e.g., insurance).
• Industrial Products: Goods purchased by businesses for use in producing other goods or services.
  • Raw Materials: Unprocessed materials (mining, fishing, agriculture).
  • Processed Materials: Processed/manufactured materials for industry.
  • Equipment: Products to aid in production.
  • Basic Components: Components used in assembly.
  • Advanced Components: Components with substantial functions within larger products.
  • Product Components: Used as part of final product, but can be stand-alone products.
  • Maintenance, Repair & Operating (MRO) Products: Used to support production but not directly in making output.

Goods, Services, and Experiences

• Goods: Tangible items with enduring attributes (e.g., physical objects, exchangeable, tradable in markets).
• Services: Intangible items, heterogeneous experiences (e.g., inseparable from consumer, perishable).
• Experiences: Combination of goods and services, actively engaging customers.

Product Mix

• Product Mix Width: The number of product lines a company carries.
• Product Line Length: The number of products within a specific product line.
• Product Line Depth: The number of subgroups of products offered in each product line.
• Product Consistency: The degree of relationship among product lines.

Product Strategies

• Product Positioning: Establishing product in marketplace relative to competitors' offerings.
• Product Elimination: Reducing products to improve profitability.
• Product Re-Positioning: Changing existing product's market position.
• New Product Development: Including product improvement, imitation, or innovation.
• Product Overlap: Competing with own brand via new products or private labels.
• Diversification: Developing unfamiliar products and markets through various approaches (e.g., concentric, horizontal, conglomerate).
• Product Scope: Considering business unit's overall mission in determining product scope.
• Value Marketing: Delivering on product/service promises.
• Product Design: Degree of standardization in product offerings.

New-Product Pricing

• Market-Skimming Pricing: Setting a high initial price to capitalize on early adoption or higher demand of new product.
• Market-Penetration Pricing: Setting a low initial price to achieve rapid market adoption among a large range of consumers.

General Pricing Approaches

• Demand-Oriented: Approach focusing on customer preferences and market conditions.
• Cost-Oriented: Approach prioritizing production costs and profit margins.
• Competition-Oriented: Approach considering competitors' strategies and market prices.

Distribution Channels

• Paths taken by goods/services to reach end-users.
• Structures vary from producer to consumer, often via intermediaries (retailers, wholesalers, distributors, agents).
• Crucial for product accessibility.

Channels Choice Considerations

• Target Market Coverage (Intensive, Exclusive, Selective).
• Buyer Requirements (Information, Convenience, Variety, Attendant Services).
• Profitability (Most Lucrative Channel).

Distribution Functions

• Information: Providing details about product/service to target market.
• Price Stability: Maintains pricing structure among channels.
• Promotion: Encouraging sales and awareness.
• Financing: Facilitating transactions within the channel.
• Title: Ownership transfer of goods within the channel.
• Matching Demand and Supply: Aligning production with consumer needs.
• Standardizing Transactions: Ensuring smooth, consistent transactions across the channel.

Supply Chain Management (SCM)

• Management of interconnected processes across firms in a supply chain (producer-manufacturer-retailer-consumer).
• Aimed at optimized processes, efficient costs, and sustainable profitability across the supply system.
• Key Processes: Customer Relationships, Demand Management, Order Fulfillment, Manufacturing, Supplier Relations, Product Development, and Returns.
• Components of Logistics: Sourcing, Production Scheduling, Order Processing, Inventory Control, Warehousing, Transportation.

Promotion

• Communication to inform and persuade target consumers about products/services.
• Promotional Mix Tools: Including Advertising, Guerrilla Advertising, Broadcast Advertising, Outdoor Advertising, Public Service Advertising, Product Placement, Cellphone/Mobile Advertising, and Online Advertising.
• Sales Promotion: Incentivizing purchases (e.g., Coupons, Contests, Discounts, Special Events, Loyalty Programs).
• Personal Selling: Direct interaction between sales representatives and customers (e.g., presentations, building relationships, address customer concerns).

Public Relations (PR)

• Cultivating a positive company image and relationships with stakeholders.
• PR Tools: Media relations, press kits, audio/video news releases, press conferences, website press rooms, media tours, newsletters, special events, sponsorships, employee communications, and community relations/philanthropy.
• Direct Marketing: Directly targeting customers using various channels (mail, email, phone, in-person).