Understanding Products and Classifications

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What defines a product in terms of market offerings?

Only physical goods that can be owned.

Anything that can be offered for attention, acquisition, use, or consumption. (correct)

Services that are permanently owned by the buyer.

Anything that is intangible and cannot satisfy needs.

Which of the following is NOT a characteristic of services?

Variability

Inseparability

Intangibility

Tangible ownership (correct)

What type of products are consumed quickly and typically involve a repeat purchase?

Non-durable goods (correct)

Infinitely renewable goods

Experiential products

Durable goods

Which of the following best describes intangibility in services?

Services cannot be seen, tasted, felt, heard or smelled. Signup and view all the answers

What is true about durable goods?

They are used repetitively over a longer period of time. Signup and view all the answers

Which term describes the fact that services cannot be separated from their providers?

Inseparability Signup and view all the answers

What does perishability of services imply?

Services cannot be saved for later sale or use. Signup and view all the answers

Which of the following is an example of a tangible product?

A smartphone Signup and view all the answers

What do core benefits represent in the levels of product?

The actual functionality that consumers seek Signup and view all the answers

Which of the following is considered an actual product?

The brand name and packaging of a handphone Signup and view all the answers

What distinguishes an augmented product from the core and actual products?

It represents additional services or benefits. Signup and view all the answers

Which category does a staple product fall under?

Convenience product Signup and view all the answers

How are convenience products characterized?

Frequent purchase with minimal buying effort Signup and view all the answers

What do shopping products primarily involve?

Careful comparison and selection based on quality Signup and view all the answers

Which type of product is least likely to be planned for purchase?

Convenience product Signup and view all the answers

What differentiates industrial products from consumer products?

Industrial products are bought for further processing or business operations. Signup and view all the answers

Which type of consumer product is characterized by a significant effort from buyers who are willing to travel great distances?

Specialty products Signup and view all the answers

What differentiates homogenous shopping products from heterogeneous shopping products?

Homogenous products are compared primarily on price. Signup and view all the answers

Which of the following is an example of an unsought product?

Life insurance Signup and view all the answers

What type of consumer product requires extensive advertising and personal selling efforts?

Unsought products Signup and view all the answers

Which category of consumer products includes items like plasters and raincoats?

Convenience products Signup and view all the answers

Which of the following statements about shopping products is true?

Customers invest time in comparing quality and price. Signup and view all the answers

What classification of consumer products involves items like televisions and smartphones?

Heterogeneous shopping products Signup and view all the answers

Industrial products are classified by what criteria?

Purpose of purchase Signup and view all the answers

Which of the following are included in capital items?

Accessory equipment like fax machines Signup and view all the answers

What characterizes the introduction stage of the product life cycle?

High distribution and promotion expenses Signup and view all the answers

During which stage of the product life cycle do profits typically start to increase?

Growth stage Signup and view all the answers

Which strategy is applied when trying to attract new users to increase product consumption?

Market modifying Signup and view all the answers

What happens during the maturity stage of a product's lifecycle?

Many suppliers enter the market Signup and view all the answers

What is a key focus during the decline stage of the product life cycle?

Harvesting or dropping the product Signup and view all the answers

Which of the following accurately describes the growth stage of a product?

New competitors typically enter the market Signup and view all the answers

Which component is NOT considered part of the marketing mix modifying?

Consumer preferences Signup and view all the answers

What is the primary goal during the introduction stage regarding advertising?

Build awareness among early adopters Signup and view all the answers

Which of the following best characterizes the decline stage of a product?

All consumers have purchased the product Signup and view all the answers

Study Notes

What is a Product?

Product refers to anything that can be offered in a market for acquisition, usage, or consumption to satisfy a need or want. This includes services, events, persons, places, organizations, ideas, or a combination of these.
Services are activities, benefits, or satisfaction offered for sale, essentially intangible and not resulting in ownership.
Experiences embody the customer benefits from purchasing a product or service.

Tangible vs. Intangible Products

Tangible products are touchable, like goods.
Intangible products are intangible, like services, and are not stored but available only at the time of usage.

Product Classifications

Durable Goods: Tangible products used repeatedly over a long period.
Non-Durable Goods: Tangible products consumed quickly within one or a few uses.
Services: Characterized by intangibility, inseparability (cannot be separated from the provider), variability (quality varies based on provider, time, place, and method), and perishability (cannot be stored).

Levels of Products

Core Benefits: Represent the fundamental problem-solving benefits sought by the customer.
Actual Product: Includes the product's design, brand name, and packaging, delivering the core benefits.
Augmented Product: Encompasses additional services or benefits surrounding the actual product.

Product Classification

Consumer Product: Products and services bought by final customers for personal use.
Industrial Product: Products purchased by individuals or organizations for further processing or business use.

Consumer Product Classification

Convenience Product: Purchased frequently, immediately, with minimum comparison and effort. Example: Sugar, candy, newspaper.
- Staple Product: Bought regularly for regular use. Example: Flour, rice, bread.
- Impulse Product: Bought with minimal planning and effort. Example: Newspapers, magazines, candy.
- Emergency Product: Purchased during emergencies or critical situations. Example: Plasters, umbrellas.
Shopping Product: Carefully compared based on suitability, quality, price, and style. Example: Furniture, clothing, handphones.
- Homogeneous Product: Products viewed as essentially similar, with customers primarily seeking the lowest price. Example: Clothing, accessories.
- Heterogeneous Product: Have unique features, varying quality and price, making comparisons difficult. Example: Televisions, handphones.
Specialty Product: Unique characteristics or brand identification, with consumers making a special purchase effort. Example: Ferrari car, Rolex watch, Birkin Hermes handbag.
Unsought Product: Products consumers are unaware of or do not usually consider buying. Example: Life insurance, Funeral services, Blood donations.

Industrial Product Classification

Materials and Parts: Raw materials (wheat, fruits, fish, petroleum) and manufactured materials/parts (iron, cement, tires) sold directly to industrial users.
Capital Items: Industrial products aiding production/operations.
- Installations: Buildings, generators, elevators.
- Accessory Equipment: Lift trucks, fax machines, desks.
Supplies and Services:
- Supplies: Operating supplies (paper, coal) and repair and maintenance items (nails, paint).
- Business Services: Maintenance/repair services (window cleaning, computer services), business advisory services (consultations, advertising).

Product Life Cycle Strategies

Product Life Cycle (PLC): The stages a product's sales and profits evolve through over its lifespan.
- Product Development: New product idea development; zero sales; high investment costs; negative profits.
- Introduction: New product launched, slow sales growth, little to no profit, high distribution and promotion expenses.
- Growth: New product satisfies the market, sales increase, new competitors emerge, price stability/decrease, increased profits, promotion and manufacturing costs benefit from economies of scale.
- Maturity: Long-lasting stage, slowdown in sales, many suppliers, substitute products, overcapacity leads to competition, marketing mix modification necessary.
- Decline: Sales decline or level off, product may need to be maintained, harvested, or dropped.

Modifying Strategies in the Product Life Cycle

Market Modifying: Increase consumption through targeting new users, increasing usage by existing customers, or entering new market segments.
Product Modifying: Changing product characteristics (quality, features, styles, packaging).
- Improve product quality and performance (durability, reliability, speed, taste).
- Improve styling and attractiveness (flavors, colors, ingredients, packaging).
Marketing Mix Modifying: Adjusting one or more marketing mix elements: product, price, promotion, or distribution channels.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz explores the concept of products, covering definitions, classifications, and the differences between tangible and intangible products. Test your understanding of durable and non-durable goods, as well as services, to see how well you comprehend the market offerings.