class 9 Flashcards
what is a product
Product is anything you can get from the seller
A product is anything of value that can be offered to consumers in an exchange
Product includes: core benefit, actual good/ service, package/ label, brand
Product has different layers: at the cnetre is the core benefit
how can you classify products
by tangibility, by end users or consumer products , consumer products, business products
what are the four common categories of products
Convenience products → what you buy frequently without putting too much thought (ex: toothpaste)
Shopping products→ more thought, dont pay attention to need recognition, Are products or services like furniture, apparel fragrances, appliances for which consumers will spend a fair amount of time comparing alternatives
Specialty products→ Items that consumers make special effort to search for but less effort to compare due to unique characteristics or brand loyalty. Products or services toward which customers show a strong preference that they will expend considerable effort to search for the best supplier .ex: rolex–> great quality, looking for it specially so don’t weigh the alternatives
Unsought products→ Items that consumers either do not know about or know about but do not initially want, not on our radar, need to build awareness
product life cycle stages
inrtdocution, growth, maturity and decline
what is the introduction phase
A product is first introduced in the market Sales, costs and profit. – Sales start at zero and grow slowly
– Large sunk investment in R&D, high costs on promotions
– Profit is minimal (often negative)
- not many competitors
- marketing obkective: create awareness, educate consumers
what is the price like in the intro phase
Skimming strategy: high price
Capitalize on the price insensitivity of early adopters
Recover the costs at the initial stage
Penetration strategy: low price
Products that can signal exclusivity, e.g., Tesla’s electric car
what is promotion like in the intro phase
– Heavy advertising, providing free trials
what is place like in the intro phase
Limited distribution channels
Large volume, accelerate growth
Products that rely on large consumer base or network effects, e.g., Netflix, Amazon Prime membership, free trials, etc.
Some products in the introduction phase rely on building a large consumer base or leveraging network effects to drive growth.
what is the growth stage
A product succeeds in satisfying the market
Sales costs and profit→ sales grows rapidly, profit increases and peaks
Customers and competitions → majority, more competitors enter the market
Marketing objective→ sustain the growth and stimulate selective demand for the brand, maximize market share
what is the product in the growth stage
improved version with unique features
what is the price in the growth stage
lower price to penetrate the market
what is the promotion in the growth stage
emphasizing product/ brand uniqueness
what is the place in the growth stage
build extensive distribution channels
what is the maturity stage
Most products we seee daily are in the maturity stage
Sales cost and profit→ sales growth soles down, average cost decreases, profit growth slows down
Customers and competitors→ repeat purchasers and or late majorities, intense competition and weak competitors exit the market
Marketing objective → prevent profit from declining, defend market share
what is the product in the maturity stage
create new versions, modify the product characteristics such as features, style or packaging to inspire more usage
