Product

Video Transcription

Hi, I'm Jeff. In this lesson, we'll explore how products are developed and classified. So let's get started.

In the last lesson, we learned about a marketing mix model called the four P's where the P's stood for product, price, place, and promotion. In this lesson, we're going to explore the first P, product, in more detail.

A product is a good service or idea that is sold by a business. One of the primary challenges facing any business is the development of a product. A product must be developed before a business can begin operation, but products must also continually evolve or be replaced to meet changing consumer needs.

And there are many challenges to developing a new product. Challenges can be social such as trend changes in societies or changes in accepted styles and designs. Technology changes can be a challenge, especially since these changes happen so often. There are challenges in the distribution of a product.

Sourcing the components of a product must be considered. And the actual physical transportation of the product to the consumer can be a challenge since transport is often impacted by changes in oil prices. And there are almost always legal challenges such as regulation and taxes. And if your business operates across international borders, these legal challenges are compounded.

But once you develop a product, then marketing can begin work. Marketing often depends on the product's classification, and there are three major classifications of products-- convenience goods, which are low-priced goods that are purchased typically as a routine or quickly without forethought. An example of convenience goods are paper towels or toothpaste.

Shopping goods, which have a more sophisticated choosing process that has the purchaser evaluating a variety of characteristics. Furniture is a good example of a shopping good. And specialty goods, which are high priced and that consumers spend considerable time and effort evaluating their choices. High end watches such as Omega or high-definition televisions are examples of specialty goods.

And products in each of these classifications are marketed differently. If you remember from the previous lesson, we talked about having the right product for the right price in the right place at the right time. How does this differ for each classification? Well, for each classification, all the rights are still important, but which should you focus on?

For convenience goods, the right place is generally the most important. Marketing will stress convenient locations or easy ordering. For shopping goods, consumers will accept substitutes more than other places, so the right product may not be as important. Marketing will focus less on the product attributes and more on the other three rights. And finally for specialty goods, the right product matters the most, so marketing must describe exactly why their product is the most desirable.

Excellent work. In this lesson, we briefly review the four P's and learned about product, the first P. We discussed the challenges of product development, and we talked about how products are classified and then marketed. Thanks for your time and have a great day.