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  • PRODUCT LIFE CYCLES

  • Types of Goods and Services

     There are 4 classifications of G & S ◦  Industrial Goods ◦ Consumer Goods ◦  Industrial Services ◦ Consumer Services

    Don’t write

  • Definitions

      Industrial Good ◦ Raw materials, equipment, supplies used to

    make our consumer goods

     Consumer Good ◦  End products we (the consumer) buy to use

  • Definitions

      Industrial Service ◦  Service provided from one business to

    another

     Consumer Service ◦  Service provided to the final buyer

  • Industrial vs Consumer Goods  With a partner – Discuss the changes and/or

    give an example of the following industrial goods as they are converted from raw material to a processed good to a finished good. Describe whether your example of a finished good is still an industrial good or is now a consumer good.

    ◦  Tree ◦  Tomato ◦ Wheat ◦  Coal

    Don’t write

  • Answers Tree   Is cut down by a logging company, sold to a pulp mill

    who convert it into pulp, sold to a paper manufacturer who converts it into a paper product, sold to Office Depot. Is a consumer product at Office Depot.

    Tomato   Is harvested by a farmer, sold to a ketchup maker

    who converts it to ketchup. Is a consumer product at the grocery store.

      Or is harvested by a farmer and sold to a grocery store. Is a consumer product at the grocery store.

    Don’t write

  • Answers Wheat   Is harvested by a farmer, sold to a flour mill who

    converts it to flour, sold to a bread manufacturer who converts it to bread which is now a consumer product.

    Coal   Is mined by a mining company, sold to a Steel

    Factory who converts it to a steel product, sold to a car part maker who converts it to a car part, sold to a car manufacturer who makes it a component of a car, sold to a car dealership. Is a consumer product at the car dealership.

    Don’t write

  • Product Life Cycle  Demand for any product or service will

    change over time.

     Most things do not remain in demand forever. They experience periods where demand is impacted, causing companies to change up their marketing.

     A change in demand is an indicator to marketers to consider new strategies.

  • Product Life Cycle

  • 4 Stages of the Product Life Cycle

     1) Introduction ◦  Involves significant startup costs to research,

    manufacture, package and advertise your product. (Big Money Needed!)

    ◦  Product is launched into the market.

    ◦ Marketing/Sales – need to pull/create demand – have a strategy   Ideas?

  • 4 Stages of the Product Life Cycle   2) Growth ◦  Companies begin to grow their sales (hopefully)!

    Consumers start becoming aware of your product and begin to purchase.

    ◦  Marketing strategies – continue to work to locate retailers to carry your product – growing your business

    ◦  Might begin to see competitors coming out as well, using your idea and capitalizing on your marketing to sell their own product and take your share.

    Example: The Blackberry (email capable handhelds) comes out, then we see Nokia and Sony entering the marketplace

  • 4 Stages of the Product Life Cycle   Maturity ◦  Successful companies will have earned profits to cover

    start-up costs and begin to get themselves “into the black”

    ◦  Often there is a lot of competition at this stage – new marketing strategy – how to stay on top?

    ◦  Weaker competitors start to leave the market (failures) ◦  Begin to consider expanding into other markets, using

    their success in the market to build on their reputation and create success in other markets

    Example: Disney expansion into cruise holidays was helped by their reputation as a quality vacation destination for theme parks.

  • Non-Traditional Product Life Cycles

     We’re going to watch the following video on “Non-Traditional Life Cycles”

     You need to take notes for potential test questions, unless you have the mind of a steel trap J

     Video

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