Product Management: Understanding Different Types of Products and Product Classification -, Study notes of Principles of Marketing

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Product … a good, service or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money

• tangible attributes
• intangible attributes PM Ch 10 Kerin Product Classification ♦ Consumer Products ♦ Business Products PM Ch 10 Kerin Product Categories ♦ Depending on tangibility

1. Nondurable goods
2. Durable goods
3. Services PM Ch 10 Kerin Product Item

… a specific version of a product that is distinct from others

• SKU … Stock Keeping Unit PM Ch 10 Kerin Product Line … a group of products that are closely related because they:
• satisfy a class of needs;
• are used together;
• are sold to the same customer group;
• are distributed thru the same type of outlets OR (not and)
• fall within a given price range

Product Mix ♦ All the products a company offers

• Width -- # of product categories
• Depth -- # of product lines in a category PM Ch 10 Kerin Consumer Products ♦ 4 Types

1. Convenience goods
2. Shopping goods
3. Specialty goods
4. Unsought goods PM Ch 10 Kerin Convenience Goods

• inexpensive
• low margin
• frequently bought
• routinized decision
• easily substituted
• wide distribution
• high inventory turnover

Shopping Goods

• infrequently purchased
• extended problem solving
• less distribution than convenience good
• slower inventory turnover … higher margin
• purchased versus “set criteria”
• low brand loyalty PM Ch 10 Kerin Specialty Goods
• unique products
• infrequently purchased
• brand loyal
• limited distribution
• high margins with low inventory turnover

Unsought Goods

• not impulse … situation caused
• unexpected “find”
• unplanned purchase
• “unknown” or undesired product PM Ch 10 Kerin Consumer Products ♦ 4 Types

1. Convenience goods
2. Shopping goods
3. Specialty goods
4. Unsought goods Business Products ♦ 2 Types
5. Components
6. Support goods

Line Extension … the development of a product that is closely related to one or more products in an existing product line Concept Test … an external evaluation of the idea by the target market

• uses words and/or pictures or mock-ups to describe the idea … generally not an actual product
• better suited for modifications of existing products than for innovations PM Ch 10 Kerin Reasons for Failure

1. Insignificant point of difference
2. Too little market attractiveness
3. Poor execution of 4-Ps
4. Poor product quality
5. Bad timing
6. Misinterpreting the data