1. The Meaning of “Product”
A product is the need-satisfying offering of an organization.
It may be a good, service, idea, person or place.
A product is a set of tangible and intangible attributes/characteristics that allow the need satisfaction to occur.

2. Consumer and Business Products
Consumer products are those which are ultimately used by the consumer.
Business products are those used by intermediaries between the producer and the ultimate consumer.

3. Classification of Consumer Goods
Convenience Goods - purchased with a minimum of effort and thought. No comparison shopping.
Shopping Goods - consumers compare quality, price, style in several stores prior to making a purchase.
Specialty Goods - consumers have a strong brand preference and insist on that particular brand.
Unsought Goods - products that are so new that consumers are unaware of them.

4. Classification of Business Goods
Raw Materials - Goods that become part of another tangible product without being processed.
Fabricating Materials - Goods that become part of another tangible product after having been processed.
Installations - Manufactured products that are an organization’s major, expensive, and long-lived equipment.
Accessory Equipment - Goods that are used in an organization’s operation.
Operating Supplies - Goods with low dollar value, short life, and which aid in operations without becoming part of the finished product.

5. Fig. 8-1 - Product as Tangible and Intangible Factors
quality
Physical
characteristics
of goods
Seller’s
services
Seller’s
reputation
Price
Color
Brand
Product
warranty
Packaging
Design

6. Quality, Design and Color
What is quality? How much quality?
TQM
ISO 9000
Product design/style and color
Attractiveness, distinctiveness, and functionality
Involves product and packaging
Can be registered
Planned Obsolescence
Technological obsolescence - new products render current products obsolete.
Style obsolescence - altering existing product to differentiate it from previous model or version.

7. Branding
A brand is a name/mark that differentiates the product of one seller or group of sellers from competing products.
A brand name consists of words, letters, and numbers that can be vocalized.
A brand mark is the part of the brand that appears in the form of a symbol, design, distinctive color or lettering.
A trademark is a brand that has been given legal protection.
Note: Brand protection and brand names.

8. Table 10-1 - The 10 Best Brands
In the U.S.
In the U.K.
In Argentina
1. Mercedes-Benz
2. BMW autos
3. Cadbury’s bars
4. Disney World
5. Lego toys
6. Duracell batteries
7. Sony televisions
8. Fisher-Price toys
9. Kodak film
10. Kellogs corn flakes
1. Mercedes-Benz
2. Alfa Romeo
3. BMW autos
4. Land Rover SUV
5. Havana pastries
6. Jeep Grand Cherokee SUV
7. Disney World
8. Sheraton hotels
9. Nissan Pathfinder
10. La Serenisima
1. Craftsman tools
2. Crayola crayons
3. Kodak film
4. Hallmark cards
5. Reynolds Wrap
6. Waterford crystal
7. Chiquita bananas
8. M&Ms candy
9. Ziploc bags
10. Hershey’s bars

9. Brand Equity
Brand Equity is the extra value that the brand gives to the product.
Brand Equity consists of . . .
Brand awareness/familiarity
Brand differentiation versus competition
Brand esteem
Brand preference
Brand loyalty
Product line extensions
Trademark legal protection
Trademark licensing

10. Packaging Purposes of packaging: Criticism of packaging
Allows product to be shipped, stored, and displayed
Protect the product from breakage, spoilage, tampering, and theft before and after purchase.
Helps promote the product
Criticism of packaging
Deceptive Packaging
Expensive Packaging
Environmentally-Unfriendly Packaging
Hazardous Packaging
Disposing of Packaging

11. Labeling, Warranty, and Servicing
Types of labels
Brand label
Descriptive label
Grade label
Warranty
What’s covered and for how long
Servicing
How does customer order and repair product
The level of service quality and convenience

12. What’s a New Product Categories of new products
Really innovative and unique.
Replacements that are significantly different from previous versions.
Imitative products that are new to the organization, but not new to the market.
Existing products attacking new markets.
How do companies find and introduce new products into the market?

13. Fig 8-2 - The New-Product Development Process
Identify
the strategic
role of new
products,
then... 1.
Idea
generation 2.
Screening
of ideas 3.
Business
analysis 4.
Prototype
development 5.
Market
Tests 6.
Commer-
cialization

14. Ten World-Class Product Failures
1. Ford’s Edsel automobile.
2. Dupont’s Corfam synthetic leather.
3. Polaroid’s Polavision.
4. United Artist’s Heaven’s Gate western movie.
5. RCA’s Videodisc.
6. Time’s TV-Cable Week magazine
7. IBM’s PCjr.
8. New Coke.
9. R.J. Reynolds’ Premier cigarette.
10. Nutrasweet’s Simplesse fat substitute.
11. Internet retailing business model

15. Fig. 9-2 - The Product Life Cycle
The aggregate demand for all brands
comprising a product category over time.
INTRODUCTION
GROWTH
MATURITY
DECLINE
Sales Volume
Dollars
Profit
Loss
Time

16. Fig. 9-3 - Product Life Cycle Variations
Part a - Extended
introduction stage
Part b - Fad
Aggregate
sales
Time in years
Time in years
Time in years
Time in years
Part c - Indefinite
maturity stage
Aggregate
sales
Time in years

17. Life Cycle Management How to stay in the maturity stage a long time.
Two basic strategies
Find new customers
Increase the frequency and variety of product usage by current customers
Two basic tactics
Promote new uses for the product
Introduce new forms of the product

18. Life Cycles in Technological Markets
A technological life cycle (TLC) has six phases:
1. Cutting Edge: Technology development that is ahead of the marketplace.
2. State of the Art: Adapting cutting-edge techniques to market needs.
3. Advanced: Increased competition and a less sophisticated customer base.
4. Mainstream: Market is fully developed with standardized products.
5. Mature: Competition shifts to customer service.
6. Decline: Other technologies replace the dying technology.

19. New Product Adoption
Adoption process: The decision-making activity of an individual through which the new product is accepted.
Stages in Adoption Process:
Awareness 
Interest 
Evaluation 
Trial 
Adoption 
Confirmation

20. Adopter Categories
Researchers have identified five categories of individual adopters for new products:
Innovators — 3% of the market.
Early adopters — 13% of the market.
Early majority — 34% of the market.
Late majority — 34% of the market.
Laggards — 16% of the market.
In addition, some individuals (non-adopters) never accept the innovation.
Diffusion: The process by which an innovation is spread through a social system over time.

21. Factors Affecting the Adoption/Diffusion Rate
Five product characteristics affect the adoption rate for new—especially truly innovative—products.
Example: A new, safer baseball for youngsters:
1. Relative advantage—superior to current balls in terms of safety?
2. Compatibility—coincides with cultural values and experiences of parents and coaches?
3. Complexity—no problem understanding concept?
4. Trialability—ball can be easily tested?
5. Observability—can see affects on youngsters hit with the new ball?