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Value package
A product marketed as a bundle of value-adding attributes, including a reasonable cost, features, and benefits.
Product features
Tangible and intangible qualities that a company builds into its products.
Product benefits
The emotional or physical advantages that products can provide to consumers.
Industrial buyer
A company or organization that purchases products for use in producing other products.
Convenience goods
Inexpensive physical goods that are consumed rapidly and regularly.
Convenience services
Inexpensive services that are consumed rapidly and regularly.
Shopping goods
Moderately expensive, infrequently purchased physical goods such as appliances and mobile phones.
Shopping services
Moderately expensive, infrequently purchased services such as hotels and airfare.
Specialty goods
Expensive, rarely purchased physical goods such as wedding gowns and tuxedoes.
Specialty services
Expensive, rarely purchased services such as catering for wedding receptions and health care insurance.
Production items
Goods or services used in the conversion process to make other products, such as rubber and leather for cars.
Expense items
Industrial products purchased and consumed within a year by firms producing other products, such as rent, utilities, and wages.
Capital items
Expensive, long-lasting, infrequently purchased industrial products or services, such as tools, machinery, buildings, and vehicles.
Product mix
The group of products that a firm makes available for sale.
Product line
A group of closely related products that function similarly or are sold to the same customer group.
New product development process
A long, complex process involving risky commitments of time and resources.
Product mortality rates
It takes roughly 50 new product ideas to generate one product that reaches the marketplace.
Speed to market
The strategy of introducing new products quickly in response to customer or market changes.
Product ideas
Typically come from consumers, the sales force, R&D departments, suppliers, or engineering personnel.
Screening
The process of eliminating ideas that do not align with the firm's abilities or objectives, involving representatives from marketing, engineering, operations, and finance.
Concept testing
Using market research to gather consumers' input about benefits and prices.
Business analysis
Comparing production costs and benefits to determine whether the product meets minimum profitability goals after gathering consumer opinions.
Prototype development
Producing a prototype by engineering, R&D, or design groups, which incurs increased expenses.
Product testing and test marketing
Testing the product to see if it meets performance requirements, followed by limited production if successful. This is the most time-consuming step.
Commercialization
If test marketing proves positive, the company begins full-scale production and marketing. Timing is crucial for success.
Stages in the product life cycle
Introduction, Growth, Maturity, Decline.
Introduction (PLC)
The stage when the product enters the marketplace, focusing on making potential customers aware of the product and its benefits through heavy advertising.
Growth (PLC)
Sales and profits start to climb, with continued heavy advertising and pricing tactics to increase product adoption.
Maturity (PLC)
The longest stage with high profits, sales growth slows, and advertising decreases. Little price reductions occur.
Decline (PLC)
Sales and profits decline, advertising is nonexistent, but heavy price reductions and discounts are used to sell remaining products.
Product extension
Marketing an existing product globally instead of just domestically.
Product adaptation
Modifying an existing product to appeal to different countries or markets.
Product reintroduction
Reviving obsolete or older products for new markets.
Branding
Using symbols, names, logos, and colors to communicate the qualities and features of a product made by a particular producer.
Branding awareness
The extent to which a brand name comes to mind when a consumer considers a particular product category.
Product placement
A promotional tactic where characters in media use a real product with its brand visible to viewers.
National brands
Brand name products produced, widely distributed, and carrying the name of a manufacturer.
Licensed brands
Brand name products for which the seller has purchased the right to use the name from an organization or individual.
Private brand (or private label)
Brand name products commissioned by a wholesaler or retailer from a manufacturer.
Packaging
The physical container in which a product is sold, advertised, or protected.
Pricing
The process of determining what a company will receive in exchange for its products.
Pricing objectives
The goals that sellers hope to achieve in pricing products for sale.
Profit maximizing objectives
Pricing decisions critical for determining a firm's revenue, resulting from the selling price multiplied by the number of units sold.
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