Identifying Products and Services that Make Up the Product Mix Product Planning

Terms related to product/service planning Product/service planning: Process of developing the product/service mix for a business by incorporating decisions relating to market opportunities. Product mix: All the products a business makes or sells. Goods: Tangible, physical products that satisfy a want or need. Services: Intangible or conceptual products produced to satisfy a want or need; tasks performed for the customer for a fee.

Product/Service Planning Involves making decisions about those features that are needed to sell a business’s products, services, or ideas.

If your company is a manufacturing or production company, one major consideration is: New product/idea development Development of products/ideas that have not been offered on the market or which modify what is presently on the market Product/Service Considerations

Generate ideas Screen ideas Make prototype and develop business proposal Develop new product Test market the product Introduce product Steps in New Product Development

Product/Service Considerations Product selection - Choosing products for the business that meet needs or wants for the area and target market. -- Monitoring existing products – Watch for changes in the product life cycle, update to “new and improved” products, and stock according to demand --Eliminating weak products – Watch for declining sales, identify products no longer in demand or not preferred by target market, and phase out or drop immediately.

Another major consideration is who will you get the products from if you are a retailer. Options may include Manufacturers – producers Wholesalers – intermediaries between manufacturer and retailers Tradeshows – exhibitions allowing vendors and manufacturers to introduce new items and promote established products and services Product/Service Considerations

Product Mix Includes all the different products that a company makes or sells.

Product Line A group of closely related products manufactured and/or sold by a business.

Product Item A specific model, brand, or size of a product within a product line.

Product Width Oral Care Blades & Razors Personal Care BatteriesAppliances Width of the Gillette Product Mix The number of different product lines a business manufactures or sells.

Product Depth Oral Care Blades & Razors Personal Care BatteriesAppliances The number of product items offered within each product line.

Product Mix Strategies The plan for how the business determines which products it will make or stock May develop completely new products May expand or modify their current product lines May drop existing products

Developing New Products Generating Ideas –Come from a variety of sources –Creativity is essential Screening Ideas –Ideas are evaluated and matched against the company’s overall objectives.

Developing New Products Developing a Business Proposal –Consider a product’s potential sales, costs, and production requirements. Developing the Product –The new idea takes physical shape –Marketers develop a marketing strategy. Testing the Product with consumers

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.

Developing Existing Products Companies constantly review their product mix to see if they can further expand their product lines or modify existing products. Two ways to do this:

Developing Existing Products Original Product Newer Products Line Extensions – new product lines, items, or services

Developing Existing Products Product Modifications – an alteration in a company’s existing product

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