Class 9 - March 17, 2011

This week we discussed Chapter 10, Developing and Managing Products.

The thing I thought was most interesting in this chapter was learning the product life cycles.  The product life cycle is a biological metaphor that traces the stages of a product's acceptance, from its introduction (birth) to its decline (death).  The amount of time a product spend in each life cycle can vary dramatically. 

First is the introductory stage.  This stage represents the full-scale launch of a new product into the marketplace.  A high failure rate, little competition, frequent product modification, and limited distribution typify the introductory stage of the product life cycle.  During this stage, sales normally increase slowly, and profits are usually negative due to R & D costs, factory tooling, and high introduction costs.  The promotional strategy focuses on developing product awareness and informing customers about the product's potential benefits.

The second stage is the growth stage.  If a products survives the introductory stage, it advances into the growth stage.  In this stage, sales typically grow at an increasing rate, many competitors enter the market, and large companies may start to acquire small pioneering firms.  Profits rise rapidly, reach their peak, and begin declining as competition intensifies.  The promotional strategy switches to aggressive brand advertising and communication of the differences between brands.  Distribution becomes a major key to success during the growth stage.

The third stage is the maturity stage.  This is the period which sales begin to increase at a decreasing rate.  Normally, this is the longest stage of the product life cycle.  It is during this stage that appliances begin to release a yearly model.  Product lines are lengthened to appeal to additional market segments.  Marginal competitors begin dropping out of the market.  Promotion increases with dealers and consumers to maintain loyalty and market share.

The final stage is the decline stage.  This stage is signified by a long-run drop in sales.  During this stage, companies must learn to develop strategies specific for this stage; to eliminate all nonessential marketing expenses and let sales decline as more and more customers discontinue buying their products. 


While my business is more of a service business rather than a products business, I still think it is important to understand how this works - just in case I am ever involved in a product based company.

Class 8 - March 3, 2011

This week was the Midterm. 

I got a 92%! 

Whoo Hoo!!

Class 7 - February 24, 2011

This week we discussed Chapter 9, Product Concepts.

First of all, you need to know what a product is.  A product may be defined as everything both favorable and unfavorable that a person receives in an exchange.  Typical product features are the packaging, style, color, options, and size.  A product can be a tangible good, a service, an idea, or some combination of these. 

There are six major types of products:

1. Business product - used to manufacture other goods or services, to facilitate an organization's operations, or to resell to other customers.
2. Consumer product - is bought to satisfy an individuals personal wants.
3. Convenience product - a relatively inexpensive item that merits little shopping effort - a customer is unwilling to shop extensively for such an item.
4. Shopping product - usually more expensive than a convenience product and is found in fewer stores - consumers usually compare several brands or stores on style, practicality, price, and lifestyle compatibility.
5. Specialty products - consumers search extensively for a particular item and are very reluctant to accept substitutes.
6. Unsought products - a product unknown to the potential buyer or a known product that the buyer does not actively seek - new products, insurance, burial plots.

Rarely does a company sell only one single product, they usually sell a variety of products.  A product item is a specific version of a product that can be designated as a distinct offering among an organization's products.  A product line is a group of closely related product items.  An organization's product mix includes all the products it sells.

We also discussed branding.  A brand is a name, term, symbol, design, or combination thereof that identifies a seller's products.  A brand name is that part of a brand that can be spoken, including letters (GM, YMCA), words (Chevrolet), and numbers (WD-40, 7-Eleven).  The elements of a brand that cannot be spoken are called the brand mark, such as the Mercedes Benz symbol.  A trademark is the exclusive right to use a brand or part of a brand.  Others cannot use the brand without permission. 


I learned that my product mix will include all of the services that my company offers.  It was good to learn the correct terminology for each of these.