Page 298 - Foundations of Marketing

Product, Branding, and Packaging Concepts | Chapter 10 265

Corn, for example, is a raw material that is found in many different products, including food,
beverages (as corn syrup), and even fuel (ethanol). Consider an unusual raw material—killer
wasps. Bug Agentes Biológicos produces wasps to combat larvae and stink bugs that threaten
sugarcane and soybean plants. The wasps are sprayed onto the fields via airplane just like a
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pesticide.
Component Parts

Component parts become part of the physical product and are either finished items ready for
assembly or products that need little processing before assembly. Although they become part
of a larger product, component parts often can be identified and distinguished easily. Spark
plugs, tires, clocks, brakes, and head lights are all component parts of an automobile. India-
based Dynamatic Technologies is a company that specializes in component parts for a variety
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of companies. Its clients include Airbus, Ford, Honeywell, and Cummins. Buyers purchase
such items according to their own specifications or industry standards. They expect the parts
to be of a specified quality and delivered on time so that production is not slowed or stopped.
Producers that are primarily assemblers, such as most lawn mower and computer manufactur-
ers, depend heavily on suppliers of component parts.

Process Materials

Process materials are used directly in the production of other products. Unlike component
parts, however, process materials are not readily identifiable. For example, a salad dressing
manufacturer includes vinegar in its salad dressing. The vinegar is a process material because
it is included in the salad dressing but is not identifiable. As with component parts, process
materials are purchased according to industry standards or the purchaser’s specifications.

MRO Supplies

MRO supplies are maintenance, repair, and operating items that facilitate production and component parts Items that
operations but do not become part of the finished product. Paper, pencils, oils, cleaning agents, become part of the physical
and paints are in this category. Although you might be familiar with Tide, Downy, and Febreze product and are either finished
items ready for assembly
as consumer products, to restaurants and hotels they are MRO supplies needed to wash dishes
or products that need little
and launder sheets and towels. Procter & Gamble is increasingly targeting business custom-
processing before assembly
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ers in the $ 3.6 billion market for janitorial and housekeeping products. MRO supplies are
process materials Materials
commonly sold through numerous outlets and are purchased routinely. To ensure supplies are
that are used directly in the
available when needed, buyers often deal with more than one seller.
production of other products
but are not readily identifiable
Business Services MRO supplies Maintenance,
repair, and operating items
Business services are the intangible products that many organizations use in their opera-
that facilitate production and
tions. They include financial, legal, marketing research, information technology, and janito- operations but do not become
rial services. Firms must decide whether to provide their own services internally or obtain part of the finished product
them from outside the organization. This decision depends on the costs associated with each
business services The
alternative and how frequently the services are needed. As an example, Accenture focuses intangible products that many
on services that help companies with business processes and management systems and with organizations use in their
integrating advanced technology into their operations. operations

PRODUCT LINE AND PRODUCT MIX LO 3 . Explain the concepts of
product line and product mix
and understand how they are
Marketers must understand the relationships among all the products of their organization
connected.
to coordinate the marketing of the total group of products. The following concepts help to
describe the relationships among an organization’s products.

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