Monday, 6 April 2015

CHAPTER 5: Logistics/Supply Chain Products

DEFINITION OF CONSUMER PRODUCT
 Consumer product are product that are directed to ultimate consumers.

CONSUMER PRODUCT CLASSIFICATION

  1. CONVENIENCE   - Easy to get the produt at anywhere
                                        and anytime
                                     - Based on customer needs
                                     - Example : food, sugar and foodstuff
  2. SHOPPING           - The products that consumer would seek and
                                       compared in order terms.
                                     - Based on cutomer wants.
                                     - Example : fashion clothes, automobiles and
                                        furniture.
  3. SPECIALTY           - These are products that buyers are willing to
                                        make a significant efforts to acquire.
                                     - Based on customer request.
                                     - Example : exspensive watch, jewelry and
                                        fine foods.
DEFINITION OF BUSINESS
Product that are directed to organizations or individuals in order to be processed further as an output of the organization or to be resold to another market.

BUSINESS PRODUCT OF CLASSIFICATION
  1. Raw materials and component parts, that will be part of the finished products.
  2. Capital items, good that are used in the manufacturing process
    such as buildings and equipment.
  3. Business supplies and services, products that do not enter the process directly but is necessary in the business operation.
FOUR STAGES PRODUCT LIFE CYLE
Introduction stages :
- The product is newly introduced to the market.
- The physical distribution strategy is restricted to few locations.
- Products availability is limited.

Growth stages :
- The market accepts product thus the sales product increased.
- Product is available over a wide geographic area.
- Requires higher degree of distribution but is done manually as there is no
  sale history to guide inventory levels at stocking point.

Maturity stages :
- The sales growth is slow but is more stable.
- Product volume is undergoing rapid change.
- Assimilate distribution pattern of similar existing product as the product
  must be widely available.

Decline stages :
- Due to technological changes, competition or decreasing consumer interest      on the product.
- The number of stocking points is likely to reduce as product stocking drawn
   back toward regional stocking points or to the plants.

PRODUCT 'S CHARACTERISTIC
Weight - bulk ratio :
- Reffering to the ratio of weight to volume of the product.
- High density products.
- Low density products.

Value - weight ratio :
- Low inventory cost.
- Raw material it sell.

Substitutability :
- Very high degree substitutability.
- Consumer can switch products from one brand to another very
  easily.

Risk characteristic :
- Refer to the degree in which the product will be at risk.
- Restrict the distribution system.

PRODUCT PACKAGING
a) Facilitate storage and handling.
b) Promote better utilization of transport equipment.
c) Protect product.
d) Promote sale of products.
e) Change product density.
f) Facilitate use of product.
g) Provide reuse value for consumer.


                       TUTORIAL QUESTIONS 
               1. DEFINE A BUSINESS PRODUCT.
             2. IDENTIFY VARIOUS PURPOSE OF
                PRODUCT PACKAGING.
             3. DISCUSS A PRODUCT LIFE CYCLE.