Chapter 2 - Products

Question 1

How do businesses generate revenue?

Answer 1

Satisfying customers is the means by which a business generates revenue: therefore, a business must never lose sight of the need to make a profit

Question 2

What is a product?

Answer 2

Whatever a purchaser hopes to get, or believes they are getting whenever they make a purchase from another individual or organization

Question 3

What do customer’s place value on when buying a product?

Answer 3

A combination of product’s:

1. Function
2. Features
3. Benefits

Question 4

What are the two broad categories of products?

Answer 4

1. Goods: products that are tangible. That is, you can see and feel them.
2. Services: products from which you benefit but they are intangible

Question 5

What are consumer products?

Answer 5

goods and services purchased by individuals, generally for their own use

Question 6

What are industrial products?

Answer 6

Goods and services, such as parts, ingredients, materials, and supplies that are bought by one business from another in the process of making consumer products

Question 7

Why do many business not survive? How can they overcome this?

Answer 7

They fail to extend or replace products that are surpassed by new tastes, new attitudes, or new technologies. Successful businesses therefore invest in consumer and product research an in new product development.

Question 8

People differ in receptiveness to new products. What should businesses do with this info?

Answer 8

Businesses must be aware of the group of people the business needs to address at any given time, and in what way

Question 9

Products, like people, have finite lives. This is explained by the —- theory. Explain this theory.

Answer 9

The product life cycle theory suggests that every product goes through 4 stages from birth to death. The stages of the life cycle are:

1. Introduction
2. Growth
3. Maturity
4. Decline