Product Decisions

Question 1

Definition: Product

Answer 1

Anything that can be offered to a market to satisfy a want or a need

Question 2

Product Forms

Answer 2

Physical Goods
Services
Consumer Products
Business Products
Industrial Goods
Experiences
Events
Properties
Information
Ideas

Question 3

Product Level Definitions

Answer 3

Core: What the customer needs/wants
Actual: What the customer gets
Augmented: Services or secondary products for the actual product

Question 4

Product Level Descriptors

Answer 4

Core: desired benefit
Actual: Quality, Style, Color, Branding
Augmented: Warranty, Installation, Deliver, Finance, Service

Question 5

Product Classifications

Answer 5

Tangible Products (Smartphone, Cereal)
Intangible Products (Consultation, Stocks)
Durable Products (Washing machine)
Nondurable Products (Soda, cookies)

Question 6

Consumer Goods Classification

Answer 6

• Convenience (eggs, bread, tomato sauce)
• Shopping (Denim, clothes)
• Speciality (Cars, custom-tailored suit)
• Unsought (funeral services, encyclopedias)

Question 7

Product Differentiation

Answer 7

• Form
• Features
• Performance Quality
• Conformance Quality
• Durability
• Reliability
• Repairability
• Style
• Customization

Question 8

Services Differentiation

Answer 8

• Ordering ease
• Delivery
• Installation
• Customer Training
• Customer Consulting
• Maintenance and Repair
• Returns

Question 9

Definition: Product Design

Answer 9

Totality of features that affect the way a product looks, feels and functions to a consumer

Question 10

Characteristics of Product Design

Answer 10

• Emotionally powerful
• transmits brand / meaning / positioning
• important with durable goods
• facilitates manufacturing and distribution

Question 11

Environmental Issues

Answer 11

• play an increasing important role in product design and manufacturing
• e.g. Sigg bottles

Question 12

Product Strategy Decisions

Answer 12

An organization’s profitability depends on its product or service offering(s) and the strength of its brand(s)

Three product-related strategy decisions:

1) Modifying the product mix
2) Positioning products
3) Branding products

Question 13

Product Portfolio (Hierarchy)

Answer 13

Product Offering Mix/ Portfolio: The totality of an organization’s product/service offerings

Product Lines: Groups of products similar in usage, buyers marketed to or technical characteristics

Product Items: A specific product or service noted by a brand, size or price

Question 14

Product Mix/Portfolio Decisions

Answer 14

Width: Number of product lines
Depth: Number of items in each product line
Consistency: Extent to which offerings satisfy similar needs, appeal to similar buyer groups or use similar technologies

Question 15

Product Mix/Portfolio Decisions based on

Answer 15

• Organizational Resources
• Competitive Situation
• Marketing Strategy (One Offering, High Profit or High Volume Offerings, Complete Lines)

Question 16

Modifying the Product Mix: Product Mix Decisions

Answer 16

• Adding to the Product Mix –> New Product Development (Single Product or Entire Line?)
• Modifying the Product (Trading Up or Down?)
• Harvesting the Product (e.g. Diesel cars)
• Eliminating the Product

Question 17

BCG Portfolio Matrix

Answer 17

• Product Portfolio Decision Tools
• market growth rate (y-axis) & relative market share (x-axis)
• poor dog, cash cow, question mark, star

Question 18

Product Line Analysis

Answer 18

• analyze sales and profits

- product-item contributions to a product line’s total sales and profits

Question 19

Additions to Product Mix

Answer 19

• in the form of Single Offerings or Entire Lines
  Consistency: How consistent is the new product with existing offerings?
  Resources: Does the organization have the resources to introduce and sustain the product?
  Market: Is there a viable market for the product?