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SBModule9
Product Mix
| Question | Answer |
|---|---|
| Product/service planning | The process of developing the product/service mix for a business by incorporating decisions relating to market opportunities. |
| Product mix | All the products and services a business makes or sells. |
| Goods | Tangible, physical products that satisfy a want or need. |
| Services | Intangible or conceptual products produced to satisfy a want or need. Tasks performed for the customer for a fee. |
| New product/idea development | Development of products/ideas that have not been offered on the market or may modify what is presently on the market. |
| Product selection | Choosing products for the business that meet wants and needs for the area and target market. |
| Monitor existing products | Watch for changes in product life cycle,update to “new and improved” products, and stock according to demand. |
| Eliminate weak products | Watch for declining sales, identify products no longer in demand or not preferred by target market, and phase out or drop immediately. |
| Consumer products | Products used by consumers for family, personal, or household purposes. |
| Consumer services | Activities used by consumers for family, personal, or household purposes. |
| Convenience goods | Inexpensive products that are purchased regularly and require little time and effort for purchase decisions. |
| Staple goods | Used often/regularly and are kept on hand. |
| Impulse goods | Unplanned purchases. |
| Emergency goods | Purchased to satisfy an immediate need. |
| Shopping goods | Products that usually require a great deal of time and effort for the purchase decision. Consumers search and compare similar products prior to purchase. |
| Specialty goods | Products that are sought by a customer who desires a specific brand or product. |
| Pure services | Activities performed that do not include a tangible product. |
| Non-good services | Personal/professional services performed for a fee. |
| Owned-good services | Services that alter, improve, or repair products owned by the customer. |
| Rented-good services | Products are provided for customer use for a brief period of time for a fee. |
| Product-related services | Activities offered with or to compliment a product. |
| Industrial goods | Goods purchased by a business and used to produce other goods or for resale to consumers. |
| Industrial services | Activities used by a business to ensure proper operation, or contracted by a business to perform a task. |
| Installation and accessory equipment | Part of the production process, used to make other products. |
| Raw materials, components, fabricated parts | Parts consumed or used to produce a product or which become parts of the final product. |
| Industrial supplies | Support or facilitate the use of industrial goods or the operation of the business. |
| Maintenance and repair | Cleaning, repairing, painting, or decorating that is performed for or by a business. |
| Business advisory | Management consulting, legal engineering, or accounting performed for or by a business. |
| Product line | A group of closely related products manufactured and/or sold by a business. |
| Product item | A specific model, brand, or size of product within a product line. |
| Product length or depth | The number of product items offered within a product line, an assortment of sizes, colors, and/or models. |
| Deep mix | Many items offered in the same line; meeting many needs. |
| Shallow mix | Few items offered in the same line; specializes in meeting certain needs. |
| Product width or breadth | The number of different product lines a business manufactures or sells. |
| Narrow mix | Limited number of product lines; focuses on a specific target market. |
| Broad mix | Many different product lines offered; focuses on one-stop shopping to meet many wants and needs. |
| Product consistency | The relationship of items in a business’s product line in terms of use, price range, target market, and methods of distribution and production. |
| Competition | “Beating” the competition, increasing market share |
| Direct competition | Most sales come from the same product that is offered by like competitors (two quick-serve restaurants). |
| Indirect competition | A small percentage of sales are from offering similar or substitute products (a quick-serve restaurant and a full-service restaurant or supermarket). |
| Changes in the market | Observe changes in the product life cycle,consumer preferences, and trends. |
| 1. Product life cycle | The evolution of a product/service on the market. |
| Stages include introduction, growth, maturity, and decline. | |
| 2. Product mix strategy | A plan of action taken in selecting an appropriate product/service mix to achieve the goals of the business. |
| 3. Market research | A system of collecting, recording, and analyzing information about customers, competitors, products, and services which could influence potential success. |
| 4. Market share | The business’s percentage of the total sales generated in a specific market. (Total market for a product must be known in order for market share to be derived.) |
| 5. Market/product position | The image a product or business has in relation to its competition. |
| 1. Business considerations | Factors that influence the success of a selected business in relation to the competition. |
| 2. Consumer considerations | Factors that influence the success of selected business in relationship to the potential market. |
| 3. Product/service considerations | Factors that influence the success of a selected business in relationship to a new or existing product/service selection. |
| a. Branding | Selecting products/services that have a name, symbol, or design for identification. |
| Manufacturer brands | Owned and introduced by manufacturer, Easily recognized as result of national advertising, Standard quality and status |
| Private brands | Owned and introduced by wholesalers and retailers;Easy to control profits and consumer loyalty since products are not sold by competitors |
| Generic brands | Offered at much lower prices; Little or no promotion of the product; Offered by discount stores and supermarkets |
| Packaging | Physical appearance of a product, container, or wrapper |
| Labeling | Presents information about the product’s content and use; Protects a business from legal liability for mishaps involving the product |
| Introduction | Product is introduced to the market, Costs are high, profits low, Much time and money is spent on promotion. |
| Growth | Success grows; Sales and profits increase; Emphasis is on customer satisfaction; Competition becomes a factor |
| Maturity | Product performance peaks;Competition is high; Cost for promotion is high; Emphasis is on advertising. |
| Decline | Sales fall; Profits are low; Very little is spent on promotion;Consideration is given to other strategies such as altering, discounting, selling, regionalizing, or recommitting to the product. |
| Quality and price | help to determine a business’s position in the marketplace. |
| Features and benefits | promote a business position in the marketplace. |
| Relation to competition | A business can choose how to compete to get the advantage over competition (direct or indirect). |
| Relation to other products in the product line | A business will position their own products in relation to others in their product line. |
Created by:
mrsljohnson
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