M9 L3 Classification of Products Services


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M9 L3 Classification of Products Services

  1. 1. Classification of Products/ Services
  2. 2. Goods used by consumers for personal, family, or household purposes. Examples: shampoo, notebook paper, picture frame, etc. Consumer Products
  3. 3. Activities purchased by a consumer for personal or family purposes. Examples: haircut, carwash Consumer Services
  4. 4. <ul><ul><li>Convenience goods - Inexpensive products that require little time and effort on the purchase decisions and are purchased regularly. </li></ul></ul>Staple goods - Used often/regularly and are kept on hand. Examples: bread, toilet paper Impulse goods - Unplanned purchases. Examples: magazine or candy in a grocery store check-out aisle Emergency goods - Purchased to satisfy an immediate need. Example: Medicine purchased on the way to a sporting event to sooth a headache. Classifications of Consumer Products/Services
  5. 5. 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. Clothing items and hardware or appliances are often considered shopping goods . Classifications of Consumer Products/Services
  6. 6. Specialty goods - Sought by a consumer who desires a specific brand or product. The consumer will not accept a substitute. The consumer may have saved money for long period of time before purchasing or may have to borrow money to purchase. Examples: Rolex watch, house, boat. Classifications of Consumer Products/Services
  7. 7. Pure services : Activities performed that do not include a tangible product. Non-good services - Personal/professional service for a fee. Example: tax preparation. Owned-good services - Activities that alter, improve, or repair products already owned. Example: dry cleaning, appliance repair service. Rented-good services - Provide a product to use for a brief period for a fee. Example: carpet cleaners, movie rental. Classifications of Consumer Products/Services
  8. 8. Product related services - Activities offered with or to compliment a product. Examples: warranties, alterations. Classifications of Consumer Products/Services
  9. 9. Industrial goods - Goods purchased by a business to produce other goods or to resell to consumers. Examples: assembly line machinery, rubber Industrial products/services
  10. 10. Industrial services - Activities used by a business to insure proper operation, or contracted by a business to perform a task. Examples: Copier or cleaning services for a business Industrial products/services
  11. 11. Installation and accessory equipment - Part of the production process used to make products. Examples: assembly line machinery, industrial sewing machines Raw materials, components, fabricated parts - Consumed to produce a product or become part of the final product. Examples: wood for paper, wheat for bread Classifications of Industrial Products/Services
  12. 12. Industrial supplies - Support or facilitate the use of industrial goods of the operation of the business. Examples: computers, cash registers, Maintenance and repair - Cleaning, repairing, painting, or decorating that is performed for or by a business. Example : janitorial services Classifications of Consumer Products/Services
  13. 13. Business advisory - Management consulting, legal, engineering, or accounting performed for or by a business. Classifications of Consumer Products/Services
  14. 14. Elements of the Product Mix <ul><li>Includes all the different products that a company makes or sells. </li></ul><ul><li>Product Line </li></ul><ul><li>Product Item </li></ul><ul><li>Product Width </li></ul><ul><li>Product Depth </li></ul>
  15. 15. Product Mix Strategies <ul><li>Deep mix - Many items offered in the same line; meets many needs. Example: Procter & Gamble makes several types of Crest toothpaste. </li></ul><ul><li>Shallow mix - Few items offered in the same line; specializes in meeting certain needs. Example: Croc only has a limited selection of shoe styles. </li></ul>Product length or depth
  16. 16. Product Mix Strategies <ul><li>Narrow mix - Limited number of product lines; focuses on a specific target market. Example: Zaxby’s only offers chicken dishes. </li></ul><ul><li>Broad mix - Many different product lines offered; focuses on one-stop shopping to meet many needs and wants. Example: Applebee’s or Chili’s has lots of meat dishes from which to choose. </li></ul>Product width or breadth
  17. 17. Product Mix Strategies <ul><li>The plan for how the business determines which products it will make or stock </li></ul><ul><li>May develop completely new products </li></ul><ul><li>May expand or modify their current product lines </li></ul><ul><li>May drop existing products </li></ul>
  18. 18. Elements of the product mix Product consistency The relationship of a business’s product line offerings in terms of use, price range, target market, and methods of distribution and production.
  19. 19. Importance of Product/Service Planning and Mix <ul><li>Competition - “”Beating” the competition; increasing the market share. </li></ul><ul><li>Direct competition – Same product is offered by like competitors. McDonald’s and Burger King are direct competitors </li></ul><ul><li>Indirect competition – Competitors offer similar or substitute products. Bath & Body Works and CVS are indirect competitors. </li></ul>Business must always be aware of what new products are available as well as what their competitors are offering.
  20. 20. Importance of Product/Service Planning and Mix <ul><li>Changes in the Market </li></ul><ul><ul><li>Observe changes in the product life cycle. </li></ul></ul><ul><ul><li>Observe changes in consumer preferences and trends. </li></ul></ul>