Factors that Contribute to the Selection of Products/Services in Small Business

Product life cycle: The evolution of a product/service on the market; stages include introduction, growth, maturity, and decline. Product mix strategy: A plan of action taken in selecting an appropriate product/service mix to achieve the goals of the business. Important Terms To Know

Market research: Gathering and analyzing data about factors which influence the potential success of a product or service. Market share: The business’s portion of the total sales in a specific market; expressed as a percentage. Market position: The image a product or business has in relation to its competition. Important Terms To Know

Categories/Factors That Influence Product/Service Selection Business Considerations: Factors influencing the success of a selected business in relationship to the competition. Size of business Goals of business Competition Image Location

Categories/Factors That Influence Product/Service Selection Consumer Considerations - Factors influencing the success of a selected business in relationship to the potential market. Consumer preferences Consumer response Sales promotion Market Trends

Product/service considerations - Factors influencing the success of a selected business in relationship to new or existing product/idea/service selection and mix. Categories/Factors That Influence Product/Service Selection

Product/service considerations Branding Packaging Labeling

Selecting products/services that have a name, symbol, or design for identification. Manufacturer brands Private brands Generic brands Branding

Manufacturer brands Owned and introduced by manufacturer Easily recognized as a result of national advertising Standard quality and price.

Private Brands Owned and introduced by wholesalers and retailers Offered by department stores and chain stores Easy to control profits and consumer loyalty since the products are not sold by competitors.

Generic Brands For the price conscious customer Offered by discount stores and supermarkets Little or no promotion of the product.

Packaging Physical appearance of a product, container, or wrapper Promotes and sells the product by appearance Gives the product identity, especially in the promotion of the product Provides information about use, safety, and contents of the product Protects the product and the consumer

Labeling Presents information about product contents, directions for use, and safety; Protects the business from legal liability for mishaps involving its product.

Product Life Cycle Represents the stages that a product goes through during its life At each stage, marketers must adjust their product mix and marketing strategies

Introduction Stage Product is introduced to the market Efforts focused on promotion and production Least profitable stage

Developing New Products Introducing the Product –The product has been researched successfully –This stage also is called commercialization. Evaluating Customer Acceptance –Marketers track new product performance.

Growth Stage The product is enjoying success Increasing sales and profits Competition is aware and is offering new products to compete

Maturity Stage Sales level off or slow down Most of target market owns product Spend a great deal of time and money in efforts to fight off the competition Decide whether to continue to improve the product to gain additional sales

Decline Stage Profits may be smaller than cost Sell or license the product Recommit to the product line Discount the product Regionalize the product – restrict sales of a product to certain local areas. Modernize or alter the product offering

Deleting a Product or Product Line Obsolescence Loss of appeal Conflict with current company objectives Replacement with new products Lack of profit Conflict with other products in the line

Market/Product Position *Quality and price - Help to determine a business’s position in the marketplace. *Features and benefits- The features and/or benefits of the product/service promote a business position in the marketplace. *Relation to competition - A business can choose how to compete to get the advantage over competition (direct or indirect). *Relation to other products in the product line - A business will position their own products in relation to others in their product line.