Assignment

Submitted To: Sir Sana-ur-Rehman

Submitted By: Hassnain siddiqui
Roll No: 2k16-BBA-40

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Product and Level of product

Consumers often think that a product is simply the physical item that he or she buys. In order to
actively explore the nature of a product further, let’s consider it as three different products –
the CORE product, the ACTUAL product, and finally the AUGMENTED product. This concept
is known as the Three Levels of a Product.

 The CORE product is NOT the tangible physical product. You can’t touch it. That’s
because the core product is the BENEFIT of the product that makes it valuable to you. So
with the car example, the benefit is convenience i.e. the ease at which you can go where
you like, when you want to. Another core benefit is speed since you can travel around
relatively quickly.

 The ACTUAL product is the tangible, physical product. You can get some use out of it.
Again with the car, it is the vehicle that you test drive, buy and then collect. You can
touch it. The actual product is what the average person would think of under the generic
banner of product.

 The AUGMENTED product is the non-physical part of the product. It usually consists of

lots of added value, for which you may or may not pay a premium. So when you buy a
car, part of the augmented product would be the warranty, the customer service support
offered by the car’s manufacturer and any after-sales service.

Classification of Products 

1. Convenience Goods
These are products that consumers purchase often and habitually, without much thought given.
Convenience goods usually are low-cost items with little differentiation between brands, and
therefore customers often pick a brand one time and then remain with that brand without
reconsidering. Examples include toothpaste, ketchup, soap, and candy.
2. Shopping Goods
In contrast, consumers looking to purchase shopping goods are more willing to do research and
compare different product options. The reason for this is because shopping goods are higher-
priced or more important items within a person’s life and therefore it is a more economic use of
consumers’ time to compare products. Examples can include extremely large purchases like
houses and cars or more modest items like clothing. Take cars– people are willing to exert
significant time and resources looking online, visiting multiple dealerships, and test-driving
different vehicles to find the best car for the price.

3. Specialty Goods
Specialty goods are products are so unique or have such a loyal following that consumers will go
to extensive lengths to seek them out. Rather than comparing brands looking for an attractive
value, buyers of specialty goods focus on seeking out the one specific product they are looking
for. Examples include Ferraris, GoPro cameras, and iPhones.

The new product development process in 6 steps

New product development is the process of bringing an original product idea to market.
Although it differs by industry, it can essentially be broken down into five stages: ideation,
research, planning, prototyping, sourcing, and costing.

1. Ideation
Many aspiring entrepreneurs get stuck on ideation, often because they’re waiting for a stroke of
genius to reveal the perfect product they should sell. While building something fundamentally
"new" can be creatively fulfilling, many of the best ideas are the result of iterating upon on an
existing product.

2. Research
With your product idea in mind, you may feel inclined to leapfrog ahead to production, but that
can become a misstep if you fail to validate your idea first.
Product validation ensures you’re creating a product people will pay for and that you won’t
waste time, money, and effort on an idea that won't sell. 

3. Planning
Since product development can quickly become complicated, it’s important to take the time to
plan before you begin to build your prototype.
When you eventually approach manufacturers or start looking for materials, if you don’t have a
concrete idea of what you want your product to look like and how it will function, it’s easy to get
lost in the subsequent steps.

4. Prototyping
The goal of the prototyping phase during product development is to create a finished product to
use as a sample for mass production.
It’s unlikely you will get to your finished product in a single attempt—prototyping usually
involves experimenting with several versions of your product, slowly eliminating options and
making improvements until you feel satisfied with a final sample.
5. Sourcing
Once you have a product prototype you’re satisfied with, it is time to start gathering the materials
and securing the partners needed for production. This is also referred to as building your supply
chain: the vendors, activities, and resources that are needed to create a product and get it into a
customers’ hands.

6. Costing
After research, planning, prototyping, and sourcing is done, you should have a clearer picture of
what it will cost to produce your product. Costing is the process of taking all of the information
gathered thus far, and adding up what your cost of goods sold (COGS) will be, so that you can
determine a retail price and gross margin.