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Product Decision Making for Small Businesses

Learn about the important factors and considerations that influence the selection and success of products/services in small businesses. Topics include product life cycle, market research, market share, market position, branding, packaging, and labeling.

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Product Decision Making for Small Businesses

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  1. D. MARKETING A SMALL BUSINESS 7.00 Identify product decisions necessary for a small business. 7.02 Identify factors that contribute to the selection of products/services in small business.

  2. Important terms to know... Product life cycle: The evolution of a product/service on the market; stages include introduction, growth, maturity, and decline. Product mix strategy: A plan of action taken in selecting an appropriate product/service mix to achieve the goals of the business.

  3. Important terms to know... Market research: Gathering and analyzing data about factors which influence the potential success of a product or service. Market share: The business’s portion of the total sales in a specific market; expressed as a percentage. Market position: The image a product or business has in relation to its competition.

  4. Categories/Factors That Influence Product/Service Selection Business Considerations: Factors influencing the success of a selected business in relationship to the competition. • Size of business • Goals of business • Competition • Image • Location

  5. Categories/Factors That Influence Product/Service Selection Consumer Considerations: Factors influencing the success of a selected business in relationship to the potential market. • Consumer preferences • Consumer response • Sales promotion • Market Trends

  6. Categories/Factors That Influence Product/Service Selection Product/service considerations: Factors influencing the success of a selected business in relationship to new or existing product/idea/service selection and mix.

  7. Product/service considerations Branding Packaging Labeling

  8. BRANDING • Selecting products/services that have a name, symbol, or design for identification. • Manufacturer brands • Private brands • Generic brands

  9. Manufacturer brands Easily recognized as a result of national advertising; standard quality and price.

  10. Private Brands Owned and introduced by wholesalers and retailers; offered by department stores and chain stores; easy to control profits and consumer loyalty since the products are not sold by competitors.

  11. Generic Brands For the price conscious customer; offered by discount stores and supermarkets; little or no promotion of the product.

  12. Packaging Physical appearance of a product, container, or wrapper; important in promotion to the market; provides information and offers safety to the consumer.

  13. Labeling Presents information about product contents, directions for use, and safety; protects the business from legal liability for mishaps involving its product.

  14. Product life cycle • Introduction: Product is introduced to the market; attracts customers because it is new or different. • Growth: Becomes popular; sales increase; customer satisfaction is important. • Maturity: Peak; competition high; promotion costs high. • Decline: Loses popularity; sales fall; consideration is given to other strategies.

  15. Market/Product Position *Quality and price *Features and benefits *Relation to competition *Relation to other products in the product line

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