Lesson 21.2 Product Planning

Introduction

• Focus on how companies organize inventory into categories.
• Importance in exams: District, state, international.
• Topics covered:
  • Product Strategy
  • Product Mix
  • Consumer vs. Business Products
  • Product Service Management

Product Strategy

• Refers to decisions made about a product.
• Essential for business success.
• Product Planning:
  • Deciding which products to include for target market appeal.
  • Distinguishes products from competitors.
• Businesses can offer:
  • Single good/service.
  • Variety of goods/services.

Product Mix

• Definition: Overall assortment of products a company offers.
• Example: Staples' product mix includes paper, pens, binders, etc.
• Product Lines: Groups of closely related products.
• Product Items: Specific models, colors, sizes within a line.
  • Example: Size 8 blue women's basketball shoe.
  • Quantity vs. distinct product items.
• Technical Terms:
  • Product Width: Number of product lines.
  • Product Depth: Number of product items within a line.

Consumer vs. Business Products

Consumer Products

• Sold to consumers for personal use (B2C).
• Categories:
  • Convenience Goods: Bought with little effort, e.g., groceries.
  • Shopping Goods: Compared by consumers on price/quality, e.g., appliances.
  • Specialty Goods: Unique, high-cost items, e.g., sports cars.

Business Products

• Sold to businesses for operational needs (B2B).
• Categories:
  • Raw Materials: Natural/man-made materials, e.g., wood.
  • Processed Materials: Used in manufacturing, not visible in final product.
  • Component Parts: Assembled from raw materials, e.g., computer chips.
  • Major Equipment: Large production machines.
  • Office Equipment/Supplies: Essential for office use, e.g., computers.
  • Business Services: Tasks needed for business operation.

Product Service Management

• Manages development, marketing, and sale of products.
• Constant review of product mixes to meet market demands.
• Roles:
  • Product Manager: Oversees product line selection, marketing, sales.
  • Category Manager: Oversees entire category of products.
• Collaborations:
  • Accounting for profit analysis.
  • Sales teams for market selling.
  • Advertising for promotion strategies.

Review and Assessment

• Example DECA question on product depth.
• Reference to previous lesson on inventory management.

---

Conclusion

• Summary of Lesson 21.2.
• Encouragement to engage with additional resources if needed.