Week 5 Ch. 13: Production Management and Pricing Strategies Flashcards
The Product Continuum
- indicates the relative amounts of tangible and intangible components in a product
- goods to ideas services
- tangible dominant to intangible dominant
ex. salt -> shoes -> digital music player -> fast food -> cruise -> consulting -> digital music service -> insurance -> education
Augmenting the Basic Product
- Core benefit
- Actual product
- Augmented product
Actual product
- brand name
- quality level
- packaging
- design
- features
Augmented product
- delivery and credit
- upgrades
- installation
- warranty
- accessories
- after-sale service
Consumer Products
- products that are primarily sold to individuals for personal consumption
Types of Consumer products
- Convenience products
- Shopping products
- Specialty products
- Unsought Products
Unsought Products
making consumers aware of their existence and convincing people to consider them
ex. life insurance, cemetery plots
Industrial and Commercial Products
purchased by organizations (including companies, not-for-profit organizations, and governments) in large quantities and used to create other products or to operate the organization
Types of Industrial and Commercial Products
- Expense items
- Capital items
- Raw materials
- Components
- Supplies
- Installations
- Equipment
- Business services
Introduction
- extends from the research-and-development (R&D) phase through the product’s first commercial availability
- a crucial phase that requires careful planning and often considerable investment
- new types of products, companies may need to educate potential customers and influencers (such as widely read bloggers) on the uses and benefits of the product
e. virtual realty systems, smartwatches
Growth
- marked by a rapid jump in sales if the product is successful
- an increase in the number of competitors and distribution outlets
- can reap handsome profits for those products that survive
ex. smart speakers, hybrid automobiles
Maturity
- usually the longest in the product life cycle, sales begin to level off
- “milking a cash cow”
ex. smartphones, conventional automobiles
“milking a cash cow”
companies try to keep mature products alive so they can use the resulting profits to fund the development of the next generation of new products
Decline
- sales and profits slip and may eventually fade away
ex. digital cameras, CD players
4 Decline Reasons
- changing demographics
- shifts in popular taste
- overwhelming competition
- advances in technology
