what is the maximum price consumers are willing to pay for a product in goventure ceo?

Creating Products and Pricing Strategies to Meet Customers' Needs

96 What Is a Product?

6. What is a product, and how is it classified?

The goal of marketing research is to create products that are desired by the target market place(s) chosen as strategic markets in line with the system's goals. In marketing, a product (a proficient, service, or idea), along with its perceived attributes and benefits, creates value for the customer. Attributes tin can exist tangible or intangible. Amid the tangible attributes are packaging and warranties as illustrated in (Figure). Intangible attributes are symbolic, such as brand epitome. Intangible attributes can include things like image as well every bit the depth of the human relationship between a service provider and a customer. People brand decisions nigh which products to buy after considering both tangible and intangible attributes of a product. For example, when a consumer buys a pair of jeans, he or she considers cost, brand, store image, and style before making the purchase. These factors are all part of the marketing mix.

Tangible and Intangible Attributes of a Production Create Value

(Attribution: Copyright Rice Academy, OpenStax, under CC Past 4.0 license.)

Classifying Consumer Products

Consumers are really ownership packages of benefits that deliver value, which always includes some tangible aspects and some intangible aspects. The person who buys a plane ride on United Airlines is looking for a quick mode to become from one city to another (the benefit). Providing this do good requires a tangible part of the product (a plane) and an intangible part of the product (ticketing, maintenance, and piloting services). A person who purchases accounting services buys the benefit of having taxes completed on the correct tax form (tangible part of the service) and having the taxes prepared correctly by a trusted person (intangible part of the service).

Marketers must know how consumers view the types of products their companies sell then that they can design the marketing mix to appeal to the selected target market. To aid them define target markets, marketers have devised production categories. Products that are bought by the cease user are chosen consumer products. They include electric razors, sandwiches, cars, stereos, magazines, and houses. Consumer products that get used up, such every bit Nexxus shampoo and Lay's potato chips, are called consumer nondurables. Those that last for a long time, such as Whirlpool washing machines and Apple computers, are consumer durables.

Another way to classify consumer products is by the amount of effort consumers are willing to make to acquire them. The four major categories of consumer products are unsought products, convenience products, shopping products, and specialty products, equally summarized in (Figure). Unsought products are products unplanned by the potential heir-apparent or known products that the buyer does not actively seek.

Convenience products are relatively inexpensive items that require picayune shopping effort. Soft drinks, candy bars, milk, bread, and small hardware items are examples. Consumers buy them routinely without much planning. This does not mean that such products are unimportant or obscure. Many, in fact, are well known by their brand names—such as Pepsi-Cola, Pepperidge Subcontract breads, Domino'southward pizza, Sure deodorant, and UPS shipping.

In dissimilarity to convenience products, shopping products are bought only later on a brand-to-make and store-to-store comparison of price, suitability, and way. Examples are furniture, automobiles, a vacation in Europe, and some items of clothing. Convenience products are bought with little planning, just shopping products may exist purchased after months or fifty-fifty years of search and evaluation.

Specialty products are products for which consumers search long and hard and for which they refuse to accept substitutes. Expensive jewelry, designer wear, country-of-the-art stereo equipment, limited-production automobiles, and gourmet restaurants autumn into this category. Because consumers are willing to spend much time and effort to find specialty products, distribution is ofttimes express to one or two sellers in a given region, such as Neiman-Marcus, Gucci, or a Porsche dealer.

Classification of Consumer Products past the Endeavour Expended to Buy Them
Consumer	Product Examples	Degree of Effort Expended by Consumer
Unsought products	Life insurance	No endeavor
	Burial plots	Some to considerable endeavor
	Time-share condos	Some to considerable effort
Convenience products	Soft drinks	Very little or minimum effort
	Breadstuff	Very little or minimum effort
	Milk	Very little or minimum try
	Coffee	Very fiddling or minimum attempt
Shopping products	Automobiles	Considerable effort
	Homes	Considerable effort
	Vacations	Considerable effort
Specialty products	Expensive jewelry	Maximum effort
	Gourmet restaurants	Maximum try
	Express-production automobiles	Maximum endeavour

Ferrari Targets Successful Consumers

Kevin Crowder walked onto the famed Monza, Italia, race runway, climbed into a Ferrari F2000 racer, and circled the course with a Thou Prix champion. Mr. Crowder, a Texas businessman who earned millions when he sold a software company he cofounded, isn't himself a professional commuter. He'due south a customer of one of Ferrari's marketing programs: the F-1 Clienti plan, under which Ferrari resurrects quondam race cars that would otherwise exist headed for the scrap heap. Instead, information technology sells them for $1 million or more, along with the adventure to drive them with a professional pit crew's help.

Ferrari has long congenital its business organisation effectually exclusivity. It limits production to around 4,500 to 5,000 cars a twelvemonth at around $180,000 and up. Some customers pay additional coin to race these street cars confronting young man owners at visitor-sponsored Ferrari Challenge events. The F-1 Clienti program adds a super-premium service by giving people a take chances to drive the aforementioned Ferraris used in Formula One, a series of auto races that are especially popular among Europeans.

The plan gives customers "an experience they can't get elsewhere," says Ferrari CEO Dieter Knechtel. Mr. Knechtel says that the "brand experience is very much related to the ownership experience: It's near driving and the experience of the car while doing it in a customs of agreeing people. This is why, we organise rails days and tours in Italy with road tours in different countries, we can organise about whatever experience with the machine—what we offer to our customers is often a 'money tin can't buy' experience."

Critical Thinking Questions

1. For Mr. Crowder, the Ferrari is a specialty good. What kind of product would it be for you? Why?
2. Do you retrieve that Ferrari has washed a practiced chore of building brand loyalty? Could Ford do the same affair?

Sources: "Corse Clienti: Overview," http://races.ferrari.com, accessed October eight, 2017; James Allen, "Ferrari's F1 Clienti Is the World's Ultimate Used Car Buying Plan," Car Buzz, http://www.carbuzz.com, accessed October eight, 2017; Jonathan Ho, "Ferrari Celebrates 70 Years," Luxuo, http://www.luxuo.com, July 13, 2017; Jonathan Welsh, "Checkered-Flag Past Helps Ferrari Unload a Armada of Used Cars," The Wall Street Periodical, January 11, 2005, pp. A1, A10.

Classifying Business organisation Products

Products bought past businesses or institutions for use in making other products are chosen business products. These products tin be commercial, industrial, or services products. A commercial production would be an 18-wheeler truck used by a major transportation visitor as function of the business. An industrial product might exist a major robotics installation in a country-of-the-art manufacturing facility. A services product (for business) might be telecommunications consulting for a large corporation setting upwards offices in Singapore. Business products are classified as either capital products or expense items. Capital products are ordinarily large, expensive items with a long life span. Examples are buildings, big machines, and airplanes. Expense items are typically smaller, less expensive items that usually have a life span of less than a yr. Examples are printer cartridges and paper. Industrial products are sometimes farther classified in the post-obit categories:

1. Installations: These are large, expensive capital items that determine the nature, scope, and efficiency of a company. Capital letter products such as General Motors' truck assembly institute in Fort Wayne, Indiana, represent a big commitment against time to come earnings and profitability. Buying an installation requires longer negotiations, more planning, and the judgments of more than people than buying whatever other type of product.
2. Accessories: Accessories do not take the aforementioned long-run impact on the firm as installations, and they are less expensive and more standardized. Only they are still capital products. Minolta photocopy machines, HP laptops, and smaller machines such as Black & Decker table drills and saws are typical accessories. Marketers of accessories often rely on well-known brand names and extensive advertising besides equally personal selling.
3. Component parts and materials: These are expense items that are built into the end product. Some component parts are custom-made, such every bit a drive shaft for an auto, a instance for a figurer, or a special pigment for painting U.S. Navy harbor buoys; others are standardized for sale to many industrial users. Intel'south Pentium chip for PCs and cement for the construction merchandise are examples of standardized component parts and materials.
4. Raw materials: Raw materials are expense items that take undergone little or no processing and are used to create a terminal product. Examples include lumber, copper, and zinc.
5. Supplies: Supplies exercise not get office of the final product. They are bought routinely and in fairly large quantities. Supply items run the gamut from pencils and paper to pigment and machine oil. They have little impact on the business firm's long-run profits. Bic pens, Champion copier paper, and Pennzoil automobile oil are typical supply items.
6. Services. These are expense items used to program or support visitor operations—for case, janitorial cleaning and management consulting services.

1. What is a product?
2. What are the classes of consumer products?
3. Explain how business products are classified.

Summary of Learning Outcomes

6. What is a product, and how is it classified?

A product can be a good, service, or idea, along with its perceived attributes and benefits, that creates customer value. Tangible attributes include the adept itself, packaging, and warranties. Intangible attributes can include the brand'southward epitome or relational attributes such as the credibility of its service providers. Products are categorized equally either consumer products or business-to-business organization products, which tin be commercial, industrial, or services products. Consumer products are bought and used by the end user, sometimes chosen "the ultimate consumer." They tin can be classified as unsought products, convenience products, shopping products, or specialty products, depending on how much endeavor consumers are willing to exert to get them.

Business organisation-to-business organization products are those bought past organizations for use in making other products or in rendering services to other organizations and include capital products and expense items.

Glossary

uppercase products

Large, expensive items with a long life span that are purchased by businesses for apply in making other products or providing a service.

convenience products

Relatively inexpensive items that crave trivial shopping attempt and are purchased routinely without planning.

expense items

Items (purchased past businesses) that are smaller and less expensive than capital products and commonly accept a life bridge of less than one year.

product

In marketing, a good, service or idea, along with its perceived attributes and benefits, that creates value for the customer.

shopping products

Items that are bought later considerable planning, including make-to-make and store-to-store comparisons of toll, suitability, and style.

specialty products

Items for which consumers search long and hard and for which they turn down to accept substitutes.

unsought products

Products that either are non planned as a buy past a potential buyer or are known simply the buyer does not actively seek them, such as funeral services.

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Source: https://opentextbc.ca/businessopenstax/chapter/what-is-a-product/

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