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M9 L1 Products and Services That Make Up the Product Mix


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M9 L1 Products and Services That Make Up the Product Mix

  1. 1. Identifying Products and Services that Make Up the Product Mix Product Planning
  2. 2. Terms related to product/service planning <ul><li>Product/service planning : Process of developing the product/service mix for a business by incorporating decisions relating to market opportunities. </li></ul><ul><li>Product mix : All the products a business makes or sells. </li></ul><ul><li>Goods : Tangible, physical products that satisfy a want or need. </li></ul><ul><li>Services : Intangible or conceptual products produced to satisfy a want or need ; tasks performed for the customer for a fee. </li></ul>
  3. 3. Product/Service Planning Involves making decisions about those features that are needed to sell a business’s products, services, or ideas.
  4. 4. <ul><li>If your company is a manufacturing or production company, one major consideration is: </li></ul><ul><li>New product/idea development Development of products/ideas that have not been offered on the market or which modify what is presently on the market </li></ul>Product/Service Considerations
  5. 5. <ul><li>Generate ideas </li></ul><ul><li>Screen ideas </li></ul><ul><li>Make prototype and develop business proposal </li></ul><ul><li>Develop new product </li></ul><ul><li>Test market the product </li></ul><ul><li>Introduce product </li></ul>Steps in New Product Development
  6. 6. Product/Service Considerations Product selection - Choosing products for the business that meet needs or wants for the area and target market. -- Monitoring existing products – Watch for changes in the product life cycle, update to “new and improved” products, and stock according to demand -- Eliminating weak products – Watch for declining sales, identify products no longer in demand or not preferred by target market, and phase out or drop immediately.
  7. 7. <ul><ul><li>Another major consideration is who will you get the products from if you are a retailer. Options may include </li></ul></ul><ul><ul><li>Manufacturers – producers </li></ul></ul><ul><ul><li>Wholesalers – intermediaries between manufacturer and retailers </li></ul></ul><ul><ul><li>Tradeshows – exhibitions allowing vendors and manufacturers to introduce new items and promote established products and services </li></ul></ul>Product/Service Considerations
  8. 8. Product Mix Includes all the different products that a company makes or sells.
  9. 9. Product Line A group of closely related products manufactured and/or sold by a business.
  10. 10. Product Item A specific model, brand, or size of a product within a product line.
  11. 11. Product Width Oral Care Blades & Razors Personal Care Batteries Appliances Width of the Gillette Product Mix The number of different product lines a business manufactures or sells.
  12. 12. Product Depth Oral Care Blades & Razors Personal Care Batteries Appliances The number of product items offered within each product line.
  13. 13. 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>
  14. 14. Developing New Products <ul><li>Generating Ideas </li></ul><ul><ul><li>Come from a variety of sources </li></ul></ul><ul><ul><li>Creativity is essential </li></ul></ul><ul><li>Screening Ideas </li></ul><ul><ul><li>Ideas are evaluated and matched against the company’s overall objectives. </li></ul></ul>
  15. 15. Developing New Products <ul><li>Developing a Business Proposal </li></ul><ul><ul><li>Consider a product’s potential sales, costs, and production requirements. </li></ul></ul><ul><li>Developing the Product </li></ul><ul><ul><li>The new idea takes physical shape </li></ul></ul><ul><ul><li>Marketers develop a marketing strategy. </li></ul></ul><ul><li>Testing the Product with consumers </li></ul>
  16. 16. Developing New Products <ul><li>Introducing the Product </li></ul><ul><ul><li>The product has been researched successfully </li></ul></ul><ul><ul><li>This stage also is called commercialization. </li></ul></ul><ul><li>Evaluating Customer Acceptance </li></ul><ul><ul><li>Marketers track new product performance. </li></ul></ul>
  17. 17. Developing Existing Products <ul><li>Companies constantly review their product mix to see if they can further expand their product lines or modify existing products. </li></ul><ul><li>Two ways to do this: </li></ul>
  18. 18. Developing Existing Products Original Product Newer Products Line Extensions – new product lines, items, or services
  19. 19. Developing Existing Products Product Modifications – an alteration in a company’s existing product
  20. 20. Deleting a Product or Product Line <ul><li>Obsolescence </li></ul><ul><li>Loss of appeal </li></ul><ul><li>Conflict with current company objectives </li></ul><ul><li>Replacement with new products </li></ul><ul><li>Lack of profit </li></ul><ul><li>Conflict with other products in the line </li></ul>