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The four classifications of consumer products
*Convenience Product: Little shopping effort, inexpensive
*Shopping Product: Requires comparison shopping, more expensive, in fewer stores.
*Specialty Product: Requires extensive search and can't be substituted.
*Unsought Product: Product is unknown to buyer isn't sought out.
Product Line vs Product Mix
Product Line- A group of closely related product items. Defined by merketer.
Product Mix- All products that an organization sells.
A company releasing a new product that just moves some previous customers to the new product without getting more.
New Product Development Process
- 1. Have a new product strategy
- 2. Idea Genereation
- 3. Idea Screening
- 4. Business Analysis
- 5. Development
- 6. Test Marketing
- 7. Commercialization
- 8. New product!
Product Life Cylcle
A concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death).
Product characteristics and their effect on the rate of adoption
*Complexity- less is better
*Compatibility- Fitting in lifestyle/meeting needs
*Relative Advantage- Significantly better than previous product
*Observability- Do you see the product in use? (Public use)
*Trialability- Can you try out the product before purchase?
How services differ from goods
Intangible: No physical object makes it hard to communicate benefits.
Inseparable: Production and consumption are simultaneous, meaning the consumer takes part in production.
Heterogenous: Services depend on their employees for quality, which makes consistency difficult.
Perishable: Services cannot be saved, and it is challenging to synchronize supply and demand.
Search vs. experience vs. credence qualities
Search: Product attributes that can be judged before purchase.
Experience: Attributes that can only be judged after consumption of the service. (most applicable to services)
Credence: Attributes that can't even be fully judged after consumption. You have to trust.
Merchant Wholesaler vs Agents and Brokers
Merchant Wholesaler- An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them.
Agents and Brokers- Intermediaries who facilitate the sale of a product by bringing together buyers and sellers. They do not own the goods.
Types of wholesalers
*Full Service Wholesalers- provide most of the channel functions.
*Rack Jobbers- Own and maintain racks of product in retail stores.
*Cash and Carry Wholesalers- Own and resell goods to businesses, but do little else. Often used by small retailers.
*Truck Jobbers- Visit retailers with stock in their truck for retailer to choose from.
*Drop Shippers- Take title to the goods, but never have physical possession of them. They just arrange shipment directly from the producer to the customer.
*Mail Order Wholesalers- Sell to small, often remotely located retailers through a catalog.
Backward vs Forward Vertical integration
Backward: When a channel member downstream acquires or takes on the duties of an upstream channel member.
Forward: When a channel member upstream (usually the producer) acquires or takes on the functions of a downstream member.