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Author: James Howard

This lesson explains the Product "P" of the 4 P's.

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Video Transcription

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Hello and welcome to this tutorial on product. So we've talked about marketing. We're right in the middle of our marketing discussion. So does the product that I'm marketing make a difference and how can I classify that?

Think about the products that you see advertised or marketed to you. Are there different approaches to how they do it? Are there different things you look for in each product in making your decision to buy it or not?

Well, during this lesson, we're going to be looking at product in the marketing mix. We're also going to be looking at new product development. And lastly, product classifications.

The key terms for this lesson are going to be convenience goods, shopping goods, and specialty goods. So let's start taking a look at the product. Now product as we remember is part of the four P's. Product, price, place, and promotion.

Now products can be goods. They can be services. Or they could be ideas. Basically, it's whatever I'm getting to the public. What's the focus of the marketing mix that I'm trying to sell?

New product development here can be a challenge. If you think about it, technically, socially, distribution, legal, all these different things that go into developing and bringing a new product to market. For instance, socially, we have changes in trends. We have changes in technology.

Does anyone remember MyPage or Myspace? It's kind of old. It's still around.

Or AOL. Things change. So Trends in society change and technology changes.

Distribution. Raising oil prices and gas prices. They have to try to find unique ways to bring that product to market and sourcing that transportation in ways that's going to be most efficient for me to get the product out.

And legally. New taxes, new regulations, new mandates that I have to comply with in order to keep my product on the market. And there's always this pressure to be innovative for the next big thing. In fact, Apple lately has come under a lot of pressure because people are wondering, what's the next big thing? Product classifications are the way that we classify a product that identifies between different types of products that we see marketed.

Now the first one we're going to look at is called a convenience good. Now convenience goods are low-priced goods that are purchased typically as a routine or quickly without forethought. You can think of things like food, milk, bread, carrots, things like that. Things that are everyday staples. There's not a lot of thought that's put into these.

And the right place here is going to be, generally, the biggest reason why we buy them. You'll see these placed in things where you're going to be an impulse buy, right next to the register and things. Convenience goods.

Next, we have shopping goods. Now shopping goods are defined as goods that have a more sophisticated choosing process that has a purchaser evaluating a variety of characteristics. And here, substitutes are acceptable. You'll see things like electronics and clothing fall into this where I have lots of substitutes, lots of different ways that I can go if things besides the product that I'm selling so I want to try to make it most appealing over my competition or my substitutes, in this case.

Now the last thing we have is specialty goods. And specialty goods are goods that are high priced and that consumers spend considerable time and effort evaluating their choices for. Here, the right product matters. Think about luxury, high-end items in this particular case.

They're worried about the product. Does it fit my individual taste? Price isn't so much of an issue. Place even isn't so much of an issue. If it's the right product in this high-end specialty goods category, I'm willing to shop and find that one product that works for me. Things like luxury cars or very, very high-end goods.

And here, we're getting almost into the price range of money is no object. If you look at this example of a Spyker automobile, this is not the kind of car where people are going to be haggling at the used car lot over. Now these are things that are going to be shipped and sourced from a different country, and they're worried about does this car fit me, not necessarily the price.

So what is it we talked about today? Well, we looked at the product in the marketing mix and its place in that mix of the four P's. We looked at new product development, that pressure to be the next big thing. And some of the challenges that can arise from getting that new product out there, things like social changes and distribution.

And lastly, we looked at product classifications. Those convenience goods, shopping goods, and specialty goods. And the things that we need to focus on to make marketing those products successful.

I want to thank you as always for spending some time with me. It's been fun. And I hope you guys have a great day.

Terms to Know
Convenience Goods

Low-priced goods that purchased typically as a routine or quickly without forethought.

Shopping Goods

Goods that have a more sophisticated choosing process that has the purchaser evaluating a variety of characteristics.

Specialty Goods

Goods that high-priced and that consumers spend considerable time and effort evaluating their choices.