Product Decision involves Determining goods & services to offer to satisfy consumers wants & needs based on market opportunities
Two Types of Products Consumer Goods: Purchased and used by the ultimate consumer for personal use. Business Goods: Purchased by organizations for use within a business.
Product Classifications Terms Product Item: Individual good that satisfies consumer wants or needs Example: Nike produces the Air Pegasus 27 Running Shoe. Product Line: A group of closely related products manufactured and/or sold by a company. Example: Nike has a product line of running shoes. Product Mix: The total assortment of products that a company makes and/or sells. Example: Nike carries several lines of shoes to make up its shoe product mix.
A Companys Product Mix can be Broad or Narrow Companies with a Broad Product Mix Nike Sears Wal-mart Companies with a Narrow Product Mix Louisville Slugger The Sunglasses Company Taylor Made Broad Product Mix: Offers a lot of different types of product lines & items. Narrow Product Mix: Specializes in a particular type of product lines & items.
Shallow Vs. Deep Product lines Deep Product lines - Have a lot of different items within each product line. (Companies with a narrow product mix) Shallow Product Lines – Have a limited amount of items within each product line. (Companies with a broad product mix)
Product Extensions Having additional products in a product mix in relation to another product. Example: Carrying shoe strings with shoes that are for sale.
Product Life Cycle The lifespan of a products popularity that it goes through broken down into 5 stages..
Products Go Through a Product Life Cycle Introduction: Product is first introduced into the marketplace Growth: Product gains demand and other competitors enter the market. Maturity: Peak demand when sales begin to level off. Decline: Sales & profits drop. Obsolescence: Product has minimal demand in the marketplace.
It is Important for Marketers to Know What Stage of the Product Life Cycle Products are at to Determine Actions that Maximize Profits.
Product Strategies Used to Maximize a Products Profits Product Modification: Change a products characteristics in order to increase sales. Example: Sony Playstation 1, 2, & 3 Market Modification: Target new markets with a product. Example: Gatorade creates the Frost brand to target non- athletes Repositioning: Changing a products image in relation to its competitors image. New Balance offers a wider shoe than other shoe manufacturers to differentiate its product.