Chapter 8 Notes

ELEMENTS OF PRODUCT PLANNING FOR GOODS AND SERVICES

WHAT IS A PRODUCT?
Customers buy satisfaction, not parts
PRODUCT--te nee!-satisfyin" offerin" of a firm#
$UA%IT&--a pro!uct's abi(ity to satisfy a customer's nee!s or
re)uirements
S*R+IC*--a !ee! performe! by one party for anoter#
Is te pro!uct pro!uce! before it's so(!, or is it simu(taneous?
Ser,ices can't be store! or transporte! - perisab(e
WHO%* PRODUCT %I-*S .UST /* D*+*%OP*D TOO
PRODUCT ASSORT.*-T--te set of a(( pro!uct (ines an!
in!i,i!ua( pro!ucts tat a firm se((s#
PRODUCT %I-*--a set of in!i,i!ua( pro!ucts tat are c(ose(y
re(ate!#
I-DI+IDUA% PRODUCT--a particu(ar pro!uct 0itin a pro!uct
(ine#
PRODUCT C%ASS*S H*%P P%A- .AR1*TI-2 STRAT*2I*S
CO-SU.*R PRODUCTS--pro!ucts meant for te fina(
consumer#
/USI-*SS PRODUCTS--pro!ucts meant for use in pro!ucin"
oter pro!ucts#
D*RI+*D D*.A-D--!eman! for business pro!ucts !eri,es from
te !eman! for fina( consumer pro!ucts#
CO-SU.*R PRODUCT C%ASS*S3HOW TH*& AR* D*4I-*D
CO-+*-I*-C* PRODUCTS--pro!ucts a consumer nee!s but
isn't 0i((in" to spen! muc time or effort soppin" for#
STAP%*S--pro!ucts tat are bou"t often, routine(y, an! 0itout
muc tou"t#
I.PU%S* PRODUCTS--pro!ucts tat are bou"t )uic5(y--as
unp(anne! purcases--because of a stron"(y fe(t nee!#
*.*R2*-C& PRODUCTS--pro!ucts tat are purcase!
imme!iate(y 0en te nee! is "reat#
SHOPPI-2 PRODUCTS--pro!ucts tat a customer fee(s are
0ort te time an! effort to compare 0it competin" pro!ucts#
HO.O2*-*OUS SHOPPI-2 PRODUCTS--soppin" pro!ucts
te customer sees as basica((y te same--an! 0ants at te (o0est
price#
H*T*RO2*-*OUS SHOPPI-2 PRODUCTS--soppin"
pro!ucts te customer sees as !ifferent--an! 0ants to inspect for
)ua(ity an! suitabi(ity#
SP*CIA%T& PRODUCTS--consumer pro!ucts tat te customer
rea((y 0ants--an! ma5es a specia( effort to fin!#
U-SOU2HT PRODUCTS--pro!ucts tat potentia( customers
!on't yet 0ant or 5no0 tey can buy#
-*W U-SOU2HT PRODUCTS--pro!ucts offerin" rea((y ne0
i!eas tat potentia( customers !on't 5no0 about yet#
R*2U%AR%& U-SOU2HT PRODUCTS--pro!ucts tat stay
unsou"t but not unbou"t fore,er#
/USI-*SS PRODUCT C%ASS*S--HOW TH*& AR* D*4I-*D
I-STA%%ATIO-S--important capita( items suc as bui(!in"s,
(an! ri"ts, an! ma6or e)uipment#
CAPITA% IT*.--a (on"-(astin" pro!uct tat can be use! an!
!epreciate! for many years#
ACC*SSORI*S--sort-(i,e! capita( items--too(s an! e)uipment
use! in pro!uction or office acti,ities#
RAW .AT*RIA%S--unprocesse! e7pense items--suc as (o"s,
iron ore, an! 0eat--tat are mo,e! to te ne7t pro!uction process
0it (itt(e an!(in"#
*8P*-S* IT*.--a pro!uct 0ose tota( cost is treate! as a
business e7pense in te year it's purcase!#
4AR. PRODUCTS--pro!ucts "ro0n by farmers--suc as oran"es,
su"ar cane, an! catt(e#
-ATURA% PRODUCTS--pro!ucts tat occur in nature--suc as
timber, iron ore, oi(, an! coa(#
CO.PO-*-TS--processe! e7pense items tat become part of a
finise! pro!uct#
SUPP%I*S--e7pense items tat !o not become part of a finise!
pro!uct#
PRO4*SSIO-A% S*R+IC*S--specia(i9e! ser,ices tat support a
firm's operations#
/RA-DI-2 -**DS A STRAT*2& D*CISIO- TOO
/RA-DI-2--te use of a name, term, symbo(, or !esi"n--or a
combination of tese--to i!entify a pro!uct#
/RA-D -A.*--a 0or!, (etter, or a "roup of 0or!s or (etters#
TRAD*.AR1--tose 0or!s, symbo(s, or mar5s tat are (e"a((y
re"istere! for use by a sin"(e company#
S*R+IC* .AR1--same as a tra!emar5 e7cept tat it refers to a
ser,ice offerin"#
CO-DITIO-S 4A+ORA/%* TO /RA-DI-2
/RA-D 4A.I%IARIT&--o0 0e(( customers reco"ni9e an!
accept a company's bran!#
4i,e (e,e(s of bran! fami(iarity
/RA-D R*:*CTIO---potentia( customers 0on't buy a bran!
un(ess its ima"e is can"e!#
/RA-D -O-R*CO2-ITIO---fina( consumers !on't reco"ni9e a
bran! at a((--e,en tou" mi!!(emen may use te bran! name for
i!entification an! in,entory contro(#
/RA-D R*CO2-ITIO---customers remember te bran!#
/RA-D PR*4*R*-C*--tar"et customers usua((y coose te
bran! o,er oter bran!s, peraps because of abit or fa,orab(e past
e7perience#
/RA-D I-SIST*-C*--customers insist on a firm's bran!e!
pro!uct an! are 0i((in" to searc for it#
Te ri"t bran! name can e(p
/RA-D *$UIT&--te ,a(ue of a bran!'s o,era(( stren"t in te
mar5et#
PROT*CTI-2 /RA-D -A.*S A-D TRAD*.AR1S
%A-HA. ACT--a ;<=> (a0 tat spe((s out 0at 5in!s of mar5s
?inc(u!in" bran! names@ can be protecte! an! te e7act meto! of
protectin" tem#
&ou must protect your o0n
Counterfeitin" is accepte! in some cu(tures
WHAT 1I-D O4 /RA-D TO US*?
4A.I%& /RA-D--a bran! name tat is use! for se,era( pro!ucts#
%IC*-S*D /RA-D--a 0e((-5no0n bran! tat se((ers pay a fee to
use#
I-DI+IDUA% /RA-DS--separate bran! names use! for eac
pro!uct#
2*-*RIC PRODUCTS--pro!ucts tat a,e no bran! at a(( oter
tan i!entification of teir contents an! te manufacturer or
mi!!(eman#
WHO SHOU%D DO TH* /RA-DI-2?
.A-U4ACTUR*R /RA-DS--bran!s create! by pro!ucers#
D*A%*R /RA-DS or PRI+AT* /RA-DS--bran!s create! by
mi!!(emen#
/ATT%* O4 TH* /RA-DS--te competition bet0een !ea(er
bran!s an! manufacturer bran!s#
TH* STRAT*2IC I.PORTA-C* O4 PAC1A2I-2
PAC1A2I-2--promotin", protectin", an! enancin" te pro!uct#
Pac5a"in" can enance te pro!uct
Pac5a"in" sen!s a messa"e
Pac5a"in" may (o0er !istribution costs
U-I+*RSA% PRODUCT COD* ?UPC@--specia( i!entifyin"
mar5s for eac pro!uct rea!ab(e by e(ectronic scanners#
WHAT IS SOCIA%%& R*SPO-SI/%* PAC1A2I-2?
4*D*RA% 4AIR PAC1A2I-2 A-D %A/*%I-2 ACT--a ;<>>
(a0 tat re)uires tat consumer "oo!s be c(ear(y (abe(e! in easy-to-
un!erstan! terms#
U-IT-PRICI-2--p(acin" te price per ounce ?or some oter
stan!ar! measure@ on or near te pro!uct#
WARRA-T& PO%ICI*S AR* A PART O4 STRAT*2& P%A--I-2
Warranty puts promises in 0ritin"
WARRA-T&--0at te se((er promises about its pro!uct#
.A2-USO--.OSS ACT--a ;<AB (a0 re)uirin" tat pro!ucers
pro,i!e a c(ear(y 0ritten 0arranty if tey coose to offer any
0arranty#
Warranty may impro,e te mar5etin" mi7
Warranty support can be cost(y