LO1 Recognize the various terms that pertain to products and services.
A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or something else of value.

   A good has tangible attributes that a consumer's five senses can perceive and intangible ones such as warranties; a laptop computer is an example. Goods can also be divided into nondurable goods, which are consumed in one or a few uses, and durable goods, which usually last over many uses. Services are intangible activities or benefits that an organization provides to satisfy consumer needs in exchange for money or something else of value, such as an airline trip. An idea is a thought that leads to a product or action, such as eating healthier foods.

LO2 Identify the ways in which consumer and business products and services can be classified.
By type of user, the major distinctions are consumer products, which are products purchased by the ultimate consumer, and business products, which are products that assist in providing other products for resale.

Consumer products can be broken down based on the effort involved in the purchase decision process, marketing mix attributes used in the purchase, and the frequency of purchase: (a) convenience products are items that consumers purchase frequently and with a minimum of shopping effort; (b) shopping products are items for which consumers compare several alternatives on selected criteria; (c) specialty products are items that consumers make special efforts to seek out and buy; and (d) unsought products are items that consumers do not either know about or initially want.

Business products can be broken down into (a) components, which are items that become part of the final product, such as raw materials or parts, and (b) support products, which are items used to assist in producing other goods and services and include installations, accessory equipment, supplies, and industrial services.

Services can be classified in terms of whether they are delivered by (a) people or equipment, (b) business firms or nonprofit organizations, or (c) government agencies.

Firms can offer a range of products, which involve decisions regarding the product item, product line, and product mix.

LO3 Describe four unique elements of services.
The four unique elements or services—the four I's—are intangibility, inconsistency, inseparability, and inventory. Intangibility refers to the tendency of services to be a performance that cannot be held or touched, rather than an object. Inconsistency is a characteristic of services because they depend on people to deliver them, and people vary in their capabilities and in their day-to-day performance. Inseparability refers to the difficulty of separating the deliverer of the services (hair stylist) from the service itself (hair salon). Inventory refers to the need to have service production capability when there is service demand.

LO4 Explain the significance of "newness" in new products and services as it relates to the degree of consumer learning involved.
From the important perspective of the consumer, "newness" is often seen as the degree of learning that a consumer must engage in to use the product. With a continuous innovation, no new behaviors must be learned. With a dynamically continuous innovation, only minor behavioral changes are needed. With a discontinuous innovation, consumers must learn entirely new consumption patterns.

LO5 Describe the factors contributing to a new product's or service's success or failure.
A new product or service often fails for these marketing reasons: (a) insignificant points of difference, (b) incomplete market and product definition before product development starts, (c) too little market attractiveness, (d) poor execution of the marketing mix, (e) poor product quality, (f) not satisfying customer needs on critical factors, (g) bad timing, and (h) no economical access to buyers.