D. MARKETING A
SMALL BUSINESS
7.00 Identify product decisions necessary
for a small business.
7.01 Explain products/services that
make up the product mix.
(The logos used in this PowerPoint were copied directly from corporate websites.
They have not been altered in any way.)
Terms related to
product/service planning
Product/service planning: Process of developing the
product/service mix for a business by incorporating
decisions relating to market opportunities.
Product mix: All the products a business makes
or sells.
Goods: Tangible, physical products that satisfy a
want or need.
Services: Intangible or conceptual products
produced to satisfy a want or need; tasks performed
for the customer for a fee.
Product/Service Considerations
•New product/idea development:
Development of products/ideas that have
not been offered on the market or which
modify what is presently on the market.
Steps – Generate ideas
Screen ideas
Make prototype and develop business proposal
Develop new product
Test market the product
Introduce product
Product/Service Considerations
•Product selection: Choosing products
for the business that meet needs or
wants for the area and target market.
--Monitoring existing products
--Eliminating weak products
SUPPLIERS
Manufacturers
Wholesalers
Tradeshows
Classifications
of
products/services
Consumer products: Goods used by
consumers for personal, family, or
household purposes.
Consumer services: Activities
purchased by a consumer for
personal or family purposes.
Convenience goods: Inexpensive products
that require little time and effort on the
purchase decisions and are purchased
regularly.
•Staple goods
•Impulse goods
•Emergency goods
Shopping goods: Products that usually
require a great deal of time and effort for
the purchase decision. Consumers search
and compare similar products prior to
purchase.
Specialty goods: Sought by a consumer
who desires a specific brand or product.
Pure services: Activities performed that
do not include a tangible product.
•Non-good services: Personal/professional
service for a fee.
•Owned-good services: Activities that alter,
improve, or repair products already owned.
•Rented-good services: Provide a product to
use for a brief period for a fee.
Product related services: Activities offered
with or to compliment a product.
Industrial goods:
Goods purchased by a
business to produce
other goods or to resell
to consumers.
Installation and accessory
equipment: Part of the
production process used to
MAKE products.
Raw materials,
components, fabricated
parts: CONSUMED to
produce a product or
become part of the final
product.
Industrial supplies:
SUPPORT or FACILITATE
the use of industrial goods of
the operation of the
business.
Maintenance and repair:
Cleaning, repairing,
painting, or decorating
that is performed for or
by a business.
Business advisory:
Management
consulting, legal,
engineering, or accounting
performed for or by a
business.
Elements of the product mix
Product line: A group of closely related
products manufactured and/or sold by a
business.
Elements of the product mix
Product item: A specific model, brand or
size of product within a product line.
Elements of the product mix
Product length or depth: The number of
product items offered within a product line;
an assortment of sizes, colors, and models.
•Deep mix: Many items offered in the
same line; meets many needs.
•Shallow mix: Few items offered in
the same line; specializes in meeting
certain needs.
Elements of the product mix
Product width or breadth:
The number of different product lines
a business manufactures or sells.
•Narrow mix: Limited number of
product lines; focuses on a specific
target market.
•Broad mix: Many different product
lines offered; focuses on one-stop
shopping to meet many needs and
wants.
Elements of the product mix
Product consistency:
The relationship of a business’s product line
offerings in terms of use, price range, target
market, and methods of distribution and
production.
Importance of Product/Service
Planning and Mix

Competition - “”Beating” the competition;
increasing the market share.

Direct competition – Same product is offered by
like competitors.

Indirect competition – Competitors offer similar or
substitute products.
Importance of Product/service
Planning Mix

Changes in the Market:

Observe changes in the product
life cycle.

Observe changes in consumer
preferences and trends.