MGTA05 Lecture notes 2 PDF

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Essential notes for exams, just remember all the things and you will get a great mark. Important parts are marked by colors....

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MGTA05 - Review Note

02 - Profit Motive + Products + Product Life Cycle (What People Need and Want) 1. Product as Value Package (function + features + benefits) 2. Product: Different types (industrial vs. consumer) (convenience, shopping, specialty) 3. Product Life Cycle Theory (intro, growth, maturity, decline) Goods vs. Services Product: ● Definition: What purchaser hopes to get, or believes to be getting when they purchase a good or service ● A good or service that fills buyer’s need or satisfies a want ● (When a consumer needs or wants something, he places a value on it) Goods: Products you can see and touch Services: Products that are intangible Products you “experience” Services More Difficult ● Immediacy: Most services can’t be stored (customer wants them there and then) ● Customer involvement: Services often require the customer to be there (Not all service require customer involvement but most do) ● Customisation: attribute that each service customer requires something different “Value Package” ● The combination of three attributes that determine a product’s value ● function + features + benefits = “value package” ● The bundle of tangible and intangible functions, features and benefits that a business offers its customers Function: What product is intended to do: •Car provides transportation•Restaurant provides a meal Features＊特征: Specific, additional attributes which contribute improved usefulness or enhanced experience: •Car has convertible roof•Car has air conditioning •Restaurant has attractive décor•Restaurant has live music Benefits: Advantages derived from purchase Frequently these are intangible (status, image, reputation＊声誉) •Car gives you independence •Car gives you status with friends Classifying Products Value Package: Why It’s Important ● Business managers must understand what customers need and want & what customers are willing to pay for ● Some customers want function only ● Some customers want function + features ● Some want function + features + benefits(and are willing to pay for it!)

MGTA05 - Review Note Product Life Cycle Model ● Products, technologies, industries – like people - have finite lives: ● they begin small and weak, they grow quickly, they mature, and decline ● The model has two-dimensions: time & growth “Time” : ● can be measured several ways: weeks, months, years, decades ● Some products have very short lives:movies, fashions, technologies ● Some products have very long lives:coffee, bread, pencils “Growth” : ● can be measured many ways ● $$ volume of sales; number of customers; volume of production; number of units sold; number of stores; profits 4 Stages 1. Introduction [Oculus Rift virtual reality headsets] Product or technology is brand new,little known, expensive, hard to find ● Sales: low (product not well known) ● Price: high ● Profits: not yet, i.e loss ● Customers: a few innovators＊创新者 ● Competitors: few or none

2. Growth [electrical cars] Product or technology is better known,more popular, more available ● Sales: increasing quickly ● Price: beginning to fall ● Profits: begin and rise ● Customers: early adopters ● Competitors: new competitors enter

3. Maturity [laptops and desktops] Product or technology is standard, Everyone has one (or two), Market is “saturated” ● Sales: peak and flat ● Price: stable ● Profits: maximum, no more growth ● Customers: middle majority ● Competitors: stable, no change

4. Decline [Blackberry devices] Product or technology is old fashioned ● Sales: declining ● Profits: declining ● Customers: laggards ● Competitors: declining

Extending A Product’s Life when everyone knows about your product. Everyone already buys your product ● Launch a new variation*变异 or an update ● Any effort to re-package, re-launch or update a mature but well known product...