Chapter 7.2 Flashcards
Industrial products
-They represent more sales in our economy than consumer goods.
-They are products or services that are purchased for the purpose of producing other products or services,
Classification of industrial products
P-I-A-S
-Production goods
-Installations
-Accessories,
-Supplies and services
Production goods
-Products used to manufacture a final product
-They enter a manufacturer’s product completely
Two classes of production goods
R-M-P
-Raw materials
-Manufactured materials and parts
Installations and accessories
They are industrial products that support the manufacturing process.
Supplies and services
-They are products that support the manufacturing process but are not part of it – they do not enter the finished product at all.
Product line
A group of products that are closely related because they function in a similar manner
They are sold to the same customer groups, and are marketed through the same types of outlets, or fall within given price ranges
Product line stretching
It occurs when a company lengthens its product line beyond its current range, by trading down, trading up or trading both ways
Trading down
The company may add a low-end product to plug a market hole that would otherwise attract a new competitor
Trading up
Companies at the lower end of the market may want to enter the higher end
Trading both ways
Companies may decide to stretch their lines in both directions
Product mix
-The number of products carried by a firm at a given time
Aspects of the companys product mix
A-D-C
-A certain breadth,
-depth
-consistency
Breadth
The number of product lines a company offers
Depth
The number of items in a product line and the variations thereof.
Consistency
It refers to how closely related the various product lines are .
Meaning of brands
-A brand is the promise that the organisation makes to the customer by indicating what the customer can expect from the organisation’s product and by differentiating the product from that of the competition.
-The brand achieves the promise, expectations and differentiation by means of a name, term, design, symbol or any other feature that identifies your product as different from those of the competitors.
Benefits of branding:
It carries benefits for all parties involved in the exchange process and, in theory, makes it easier to buy or sell products
Branding from the consumer’s perspective:
-It facilitates product identification.
-It communicates features and benefits.
-It helps product evaluation.
-It reduces risk in purchasing.
-It creates interest and character for the product image
Branding from the manufacturer’s perspective
-It helps create brand loyalty.
-It creates differential advantage.
-It allows premium pricing.
-It facilitates product diversification in certain respects.
Branding from the retailer’s perspective:
-The retailer has assurance that they will sell as branded products are well supported by advertising and other marketing activities
