14 Aug Product Development ProcessDo an internet search of the new product development

Product Development ProcessDo an internet search of the new product development process of any product of your choice, and analyze the process for developing the product. Review the reasons why new products fail and make two specific recommendations to improve the high failure rate of new products. Please use citations were necessary, Two references is a MUST in addition to the attached document. NO PLAGIARISM.Print10/27/14, 7:35 PMhttps://content.ashford.edu/print/AUBUS620.12.1?sections=front_mat…ontent&clientToken=14e7d2a3-03dc-b11c-287e-598d8e5e8cf2&np=sec1.1Page 1 of 70Print10/27/14, 7:35 PMCopyrightManagerial)Marke+ngJames&FinchUniversity*of*Wisconsin,*La*CrosseBridgepoint&Educa5on,&Inc.VP&of&Learning&Resources:& Beth,AguiarEditor?in?Chief/AVP:&Steve,WainwrightDirector&of&Editorial&Technology:& Peter,GaluardiSponsoring&Editor:& Mireille,YanowDevelopment&Editor:& Carrie,BrandtAssistant&Editor:& Kristle,MaglunobEditorial&Assistant:& Nicole,SanchezASullivanEditorial&Intern:& Lindsey,MessnerMedia&Editor:& Kim,PurcellPrin5ng&Services:& BordeauxComposi5on/Illustra5on:&Lachina,Publishing,ServicesCover&Image:& Hemera/ThinkstockISBN?10:&1621780082ISBN?13:&978A1A62178A008A3Published&by&Bridgepoint&Educa5on,&Inc.,&13500&Evening&Creek&Drive&North,&Suite&600,&San&Diego,&CA&92128Copyright,©,2012,,Bridgepoint,EducaTon,,Inc.All,rights,reserved.GRANT&OF&PERMISSION&TO&PRINT:& Bridgepoint,EducaTon,,Inc.,,the,copyright,owner,of,this,material,,hereby,grants,the,holder,of,this,publicaTon,the,right,to,print,thesematerials,for,personal,use.,The,holder,of,this,material,may,print,the,materials,herein,for,personal,use,only.,Any,print,,reprint,,reproducTon,,or,distribuTon,of,these,materialsfor,commercial,use,without,the,express,wriXen,consent,of,Bridgepoint,EducaTon,,Inc.,consTtutes,a,violaTon,of,the,Copyright,Law,of,the,United,States,of,1976,(P.L.,94A553).,,,,,,www.bridgepointeduca5on.com &(hYp://www.bridgepointeduca5on.com)& ,|,content.ashford.edu &(hYps://content.ashford.edu)https://content.ashford.edu/print/AUBUS620.12.1?sections=front_mat…ontent&clientToken=14e7d2a3-03dc-b11c-287e-598d8e5e8cf2&np=sec1.1Page 2 of 70Print10/27/14, 7:35 PMAcknowledgmentsThe,Editorial,team,would,like,to,thank,the,following,reviewers,for,their,feedback,and,guidance:Christopher,P.,Blocker,,Baylor,UniversityVictoria,L.,CriXenden,,Boston,CollegeJacqueline,Gilliard,,Ashford,UniversitySharif,Muhammad,,Ashford,UniversityM.,Joseph,Sirgy,,Virginia,Techhttps://content.ashford.edu/print/AUBUS620.12.1?sections=front_mat…ontent&clientToken=14e7d2a3-03dc-b11c-287e-598d8e5e8cf2&np=sec1.1Page 3 of 70Print10/27/14, 7:35 PMChapter 9Product and Service DecisionsIkon*Images/Ge9y*ImagesLearning&OutcomesBy&the&end&of&this&chapter,&you&should:Understand,basic,product,concepts,,and,be,able,to,idenTfy,how,each,of,four,different,product,levelscontributes,to,the,quality,and,value,that,buyers,receive,from,the,brands,they,purchase.Define,how,services,differ,from,goods,and,how,the,unique,features,of,services,pose,special,markeTngchallenges.Develop,a,pracTcal,understanding,of,how,the,new,product,development,process,shapes,the,course,ofinnovaTon,within,both,small,organizaTons,and,large,corporaTons.Recognize,the,Product,Diffusion,Curve,and,product,adopTon,process.Understand,the,Product,Life,Cycle,and,appreciate,its,value,and,limitaTons,in,guiding,the,development,of,brandstrategy.https://content.ashford.edu/print/AUBUS620.12.1?sections=front_mat…ontent&clientToken=14e7d2a3-03dc-b11c-287e-598d8e5e8cf2&np=sec1.1Page 4 of 70Print10/27/14, 7:35 PMCh.,9,IntroducTonIn,previous,chapters,,we,have,been,systemaTcally,developing,our,understanding,of,products,and,services,in,conjuncTon,with,the,invesTgaTon,of,other,topics,in,markeTngmanagement.,The,overall,plan,of,aXack,for,this,chapter,is,to,briefly,consider,a,few,addiTonal,core,concepts,about,products,and,services,before,examining,the,strategicsignificance,of,three,criTcal,processes:,new,product,development,,product,diffusion,and,adopTon,,and,the,Product,Life,Cycle.***Some;mes*the*new*product*development*process*doesn’t*go*precisely*the*way*it*is*described*in*the*books.*Consider*the*case*of*a*toy*company*that*was*evalua;ng*the*financialpoten;al*of*a*project*called*My*First*RC.*The*RC*in*ques;on*was*an*inexpensive*remote*control*helicopter*intended*for*children*12*years*of*age*and*younger.*The*remote*controltechnology*itself*was*just*a*simplied*version*of*the*scheme*used*in*advanced*models.*However,*the*product*design*team*had*worked*for*nearly*two*years*to*develop*ahelicopter*prototype*that*was*sturdy*enough*to*withstand*the*demands*of*younger*children*playing*with*it*outdoors*across*a*diverse*range*of*wind*and*weather*condi;ons.*Tomake*the*small*copter*heavy*enough*to*be*stable*in*outdoor*flight,*the*final*model*was*a*li9le*clunkier*and*less*maneuverable*than*the*team*would*have*liked.The*plan*was*to*build*future*product*sales*in*the*company’s*highly*profitable*remote*control*products*division*by*introducing*the*base*technology*to*a*rela;vely*young*market.The*concept*had*passed*the*ini;al*screening*process*and*preliminary*business*analysis.*The*next*step*in*concept*tes;ng*was*to*solicit*the*reac;ons*of*a*focus*group*to*aworking*prototype*of*My*First*RC.*Less*than*a*week*before*the*focus*group*mee;ng,*the*market*research*team*sent*a*request*to*the*designers.*"We’d*like*to*demo*this*productindoors*.*.*.*at*the*conference*facility.*Could*you*possibly*replace*the*copter*blades*with*new*ones*made*from*a*safer*material?"*The*new*blades*were*provided*six*hours*beforethe*mee;ng.*They*were*less*rigid*and*less*bri9le*than*the*hard*plas;c*ones*on*the*original*model.*They*were*lighter,*more*flexible,*and*not*as*sharpSedged.The*response*by*parents*invited*to*par;cipate*in*the*focus*group*was*enthusias;c.*.*.*.*they*loved*the*idea*of*a*safe,*indoor*RC*helicopter.*Even*when*the*focus*group*moderatortried*to*push*them*toward*evalua;ng*the*concept*as*an*outdoor*toy,*they*were*adamant*that*this*was*a*great,*ac;ve*toy*for*indoor*use.*A*second,*unintended*consequencethe*new*blades*was*that*the*copter*was*now*lighter*and*more*maneuverable*than*the*ini;al*prototype.*Sales*in*the*first*two*years*of*this*product*introduc;on*were*540percent*higher*than*ini;ally*projected*for*the*outdoor*model.https://content.ashford.edu/print/AUBUS620.12.1?sections=front_mat…ontent&clientToken=14e7d2a3-03dc-b11c-287e-598d8e5e8cf2&np=sec1.1Page 5 of 70Print10/27/14, 7:35 PM9.1,Basic,Product,ConceptsA,product&can,be,defined,in,mulTple,ways.,In,Chapter,1,,we,iniTally,idenTfied,the,product,as,one,of,four,variables,in,the,markeTng,mix,,related,to,both,the,tangible,andintangible,dimensions,of,ideas,,goods,,services,,or,some,combinaTon,of,the,three.,We,explicitly,recognized,the,role,of,products,in,the,markeTng,concept,as,the,means,ofsaTsfacTon,of,customers’,wants,and,needs.,That,is,,products,are,developed,specifically,"for,the,purpose,of,exchange,in,the,saTsfacTon,of,individual,and,organizaTonalobjecTves",(American,MarkeTng,AssociaTon,,2011).At,several,later,points,in,the,discussion,of,consumer,behavior,,brand,management,,market,segmentaTon,,and,product,posiToning,,we,idenTfied,products,as,bundles,ofaXributes.,Although,the,most,important,of,these,aXributes,are,the,benefits,that,consumers,derive,from,using,the,product,,other,features,,funcTons,,and,alternaTve,uses,canalso,be,included,in,this,definiTon.,It,is,what,the,organizaTon,has,to,offer,the,intended,target,market,as,a,means,of,saTsfying,customer,needs.,It,is,also,the,element,of,themarkeTng,mix,that,ulTmately,generates,revenue,for,the,company.Two,addiTonal,terms,oken,encountered,within,the,domain,of,product,management,are,product,mix,and,product,line.,A, product&mix& is,simply,the,complete,collecTon,or,setof,products,offered,for,sale,by,an,organizaTon.,It,is,inclusive,of,all,product,lines.A,product&line& is,most,oken,used,in,reference,to,a,group,of,products,that,are,related,to,each,other,by,virtue,of,sharing,a,common,target,market.,However,,lines,can,also,bedefined,as,sets,of,products,that,share,similar,uses,,technologies,,distribuTon,channels,,or,other,relevant,features.To,complete,our,understanding,of,products,,we,need,to,add,a,few,addiTonal,dimensions,of,this,concept,to,the,foundaTons,established,thus,far.Product&LevelsRecognizing,that,products,can,be,beXer,understood,as,bundles,of,aXributes,or,benefits,is,a,criTcal,insight,for,markeTng,managers.,However,,the, total&product& consists,ofmore,than,what,is,consumed,or,uTlized,by,the,buyer.,Products,are,composed,of,four,levels,,each,of,which,contributes,uniquely,to,the,value,that,customers,receive.,Theselevels,are,referred,to,as,the,core,benefit,,secondary,benefits,,basic,product,,and,augmented,product.Core&benefit& represents,the,primary,or,essenTal,value,that,the,customer,derives,from,the,product,being,purchased.,When,renTng,a,car,,for,example,,the,core,benefit,to,thedriver,is,transportaTon.Secondary&benefits,are,provided,by,features,of,the,product,that,enhance,the,primary,value,provided,by,the,product.,An,automaTc,transmission,,cruise,control,,and,a,GPSnavigaTon,system,are,features,that,make,the,customer’s,driving,experience,more,pleasant,and,efficient.,Although,the,car,would,sTll,provide,the,renter,with,basictransportaTon,if,these,features,were,absent,,their,presence,enhances,the,value,of,the,rental,purchase.Basic&product,refers,to,the,tangible,components,and,features,that,consTtute,the,product,being,purchased.,In,simplest,terms,,it,is,the,sum,of,the,physical,characterisTcs,of,thegood,being,sold.,Using,the,auto,rental,example,,the,physical,characterisTcs,of,the,car,itself,make,up,the,basic,product,being,acquired,for,a,limited,Tme.,In,the,case,of,itemsfrequently,purchased,at,a,drugstore,,for,example,,the,actual,products,are,the,items,in,the,shopping,bag,at,the,end,of,the,trip.Augmented&product,refers,to,addiTonal,features,and,benefits,that,provide,added,value,to,products,even,though,they,may,not,be,the,primary,drivers,or,core,benefits,in,thepurchase,decision.,Providing,online,checkAin, ,perks,for,frequent,customers,,and,special,concierge,services,at,popular,desTnaTons,would,be,elements,of,the,augmentedproduct,for,car,rental,companies.,Although,the,specific,features,of,the,augmented,product,will,necessarily,differ,from,one,type,of,product,to,the,next,,there,are,severalelements,common,to,many,types,of,B2B,and,B2C,purchases.,These,include,excepTonal,customer,service,and,sales,support,,product,guarantees,and,warranTes,,andaccessibility.,Accessibility,relates,to,how,easy,the,product,or,service,is,to,obtain.,Maintaining,adequate,inventories,,sameAday ,delivery,,and,24Ahour ,availability,are,all,elementsof,product,accessibility.Although,marketers,oken,focus,on,the,quality,of,the,actual,product,being,sold,,each,of,these,four,product,levels,makes,important,contribuTons,to,the,overall,value,enjoyedby,purchasers.,Consequently,,markeTng,managers,must,recognize,that,the,final,product,that,reaches,the,customer,is,derived,from,many,decisions,not,directly,related,toproduct,design.,The,criTcal,importance,of,branding,,for,example,,was,invesTgated,at,length,in,Chapter,7.,Two,addiTonal,areas,of,importance,to,successful,product,markeTngare,packaging,and,labeling.Product&PackagingA,package,is,defined,as,the,container,used,to,protect,,promote,,transport,,and/or,idenTfy,a,product.,It,may,be,primary,(containing,the,product),,secondary,(containing,onemore,primary,packages),,or,terTary,(containing,one,or,more,secondary,packages)., Packaging&generally,refers,to,the,process,by,which,packages,are,created,,although,it,can,besynonymous,with,package,(American,MarkeTng,AssociaTon,,2011).,Most,tangible,consumer,products,are,sold,within,a,package,that,serves,several,purposes.,Although,theprimary,funcTon,of,packaging,is,to,protect,its,contents,,the,manner,in,which,a,product,is,packaged,can,also,enhance,the,convenience,of,using,the,product,or,deliver,apromoTonal,message.,Packaging,decisions,generally,fall,into,one,of,two,categories:,packaging,for,distribuTon,and,packaging,for,final,customers.Packaging)for)Distribu+onPackaging&for&distribu5on& includes,the,acTviTes,involved,in,designing,and,creaTng,the,containers,for,a,product,during,its,transportaTon,from,the,manufacturer,,through,thechannels,of,distribuTon,,to,the,point,of,retail,sale,or,purchase.,It,typically,contains,mulTple,packages,for,individual,resale.,Since,it,is,usually,subjected,to,significant,physicalhttps://content.ashford.edu/print/AUBUS620.12.1?sections=front_mat…ontent&clientToken=14e7d2a3-03dc-b11c-287e-598d8e5e8cf2&np=sec1.1Page 6 of 70Print10/27/14, 7:35 PMstress,as,it,passes,through,the,distribuTon,channel,,it,needs,to,be,designed,to,withstand,these,forces.,Depending,on,the,distribuTon,path,,products,may,require,specificprotecTon,from,being,crushed,,wide,temperature,variaTons,,vibraTons,,water,,and,other,threats.,As,a,general,principle,,this,type,of,transport,packaging,needs,to,providemore,effecTve,protecTon,against,damageArelated ,losses,than,packaging,for,final,customers.Packaging)for)Final)CustomersPackaging&for&final&customers& is,primarily,the,container,that,the,final,buyer,receives,at,the,Tme,of,purchase.Packaging,at,this,retail,level,of,markeTng,oken,makes,the,product,more,appealing,and,also,protects,it,fromdamage.,In,this,sense,,retail,packaging,can,contribute,to,the,value,offered,by,a,product,in,four,disTnct,ways:Image:,The,graphic,elements,of,a,package,as,well,as,its,physical,design,may,aXract,aXenTon,to,the,brand,andpromote,a,specific,brand,image.,It,can,also,contribute,to,the,brand’s,visibility,within,the,store.,As,noted,inChapter,7,,imageAspecific ,elements,of,markeTng,communicaTons,can,shape,percepTons,of,brands.Convenience:,Many,containers,have,features,that,add,convenience,in,product,handling,,storage,,opening,resealing,,dispensing,,and,disposal.,In,addiTon,,some,containers,add,value,and,convenience,for,consumers,byenabling,easier,porTon,control.,SingleAserving ,containers,,for,example,,hold,an,amount,of,the,product,suitablefor,individual,use.Retailers &seeking &to &reduce &shopli^ing &some5mes &rely &on &RFID &tags &likethis &one &that &can &be &detected &by &devices &at &store &exits.Hemera/ThinkstockProduct*Integrity*and*Security:,The,design,of,containers,can,significantly,reduce,the,risks,posed,by,bothintenTonal,product,tampering,and,unintenTonal,product,damage,from,rouTne,handling.,AddiTonally,,someproduct,packages,are,designed,to,minimize,the,potenTal,for,pilferage,through,the,use,of,anTAthek ,devices,such,as,radioAfrequency ,idenTficaTon,(RFID),tags,that,can,be,detected,by,devices,at,retail,store,exits.Informa;on:,Packages,communicate,informaTon,on,the,proper,use,and,disposal,of,the,package,or,product.,This,is,parTcularly,criTcal,with,packaged,foods,,pharmaceuTcals,and,medical,products.The,specific,informaTon,included,on,a,product’s,package,can,make,significant,contribuTons,to,the,successful,execuTon,of,a,markeTng,plan,for,many,types,of,products.,Thefollowing,secTon,briefly,considers,the,role,of,labeling,in,package,design.Product&LabelingThe,term, label,refers,to,any,informaTon,aXached,to,a,product,for,the,purpose,of,naming,it,and,describing,its,use,,its,dangers,,its,ingredients,,its,manufacturer,,and,the,like.Package,labeling,typically,includes,more,informaTon,than,simply,the,brand,name.,Most,distribuTon,and,final,consumer,containers,include,printed,informaTon,to,assist,theintermediary,or,end,customer.,For,consumer,products,,label,features,serve,several,important,purposes.Most,importantly,,labels,idenTfy,the,product,and,brand,being,purchased.,As,noted,in,the,previous,discussionof,brand,idenTty,,the,brand,name,conveys,the,percepTon,of,a,brand,in,the,minds,of,current,and,prospecTvebuyers.,Consequently,,a,package,label,can,communicate,a,composite,impression,of,what,the,brand,means,tobuyers,in,terms,of,their,antudes,and,expectaTons.The,design,elements,and,features,of,product,labels,also,serve,to,capture,the,aXenTon,of,shoppers.,The,use,ofcolor,,shape,,and,highAimpact ,words,and,phrases,can,lead,prospecTve,firstATme ,buyers,to,pause,long,enoughto,evaluate,the,product.,This,is,parTcularly,important,since,the,label,is,oken,the,first,thing,a,shopperLabeling &requirements &for &consumer &products &are &established,encounters.,Both,the,appearance,of,the,label,and,its,informaTon,content,will,shape,first,impressions.regulated, &and &enforced &by &the &FDA &and &the &FTC &with &the &authoritygranted &to &them &by &Congress.Labels,also,include,informaTon,related,to,environmental,issues,and,legal,disclosure,requirements.,Increasingly,Associated*Presslabels,provide,informaTon,that,assists,potenTal,buyers,in,assessing,the,environmental,impact,of,the,productand,its,eventual,disposal.,For,many,categories,of,products,,sellers,of,food,and,pharmaceuTcal,products,arerequired,by,law,to,list,ingredients,,nutriTonal,data,,and,usage,warning,informaTon.,However,,food,marketers,also,use,labels,to,provide,consumers,with,recipes,and,productusage,suggesTons,to,promote,saTsfacTon,with,the,product,and,addiTonal,sales.Since,the,late,1970s,,labels,for,most,products,sold,in,retail,outlets,have,been,required,to,include,a,Universal,Product,Code,(UPC),to,help,sellers,speed,up,the,checkout,processand,improve,inventory,management.,And,for,companies,selling,into,internaTonal,markets,or,domesTc,markets,with,diverse,cultural,roots,,bilingual,or,mulTlingual,labels,maybe,needed.Think&About&ItFor,one,eightAhour ,period,,make,it,a,point,to,be,aware,of,all,the,labels,you,encounter.,Consider,the,labelAmaker’s ,intenTon,for,each,of,them.,Consciously,categorize,eachthe,labels,according,to,the,funcTon,or,purpose,it,is,intended,to,serve.https://content.ashford.edu/print/AUBUS620.12.1?sections=front_mat…ontent&clientToken=14e7d2a3-03dc-b11c-287e-598d8e5e8cf2&np=sec1.1Page 7 of 70Print10/27/14, 7:35 PMWhich,category,did,you,encounter,the,most?Is,almost,every,label,a,part,of,that,category,in,some,way?,Why?What,did,you,learn,about,the,way,in,which,you,noTce,or,fail,to,noTce,the,informaTon,provided,by,labels,on,a,regular,basis?Classifica5ons&for&GoodsThere,are,substanTal,differences,in,how,marketers,approach,strategy,development,for,consumer,and,industrial,markets.,Individual,consumers,who,purchase,goods,forthemselves,spend,far,less,each,year,than,the,average,industrial,customer,,but,each,individual,among,the,7,billion,people,worldwide,may,act,as,an,independent,decisionmaker.,Decision,making,in,industrial,senngs,,as,we,saw,in,Chapter,5,,oken,depends,on,input,from,mulTple,sources,within,the,organizaTon.Consumer)Goods)ClassesConsumer,goods,can,be,classified,according,to,the,way,in,which,individuals,shop,for,them.,Specifically,,most,products,intended,for,sale,in,B2C,markets,are,categorized,bywhere,and,how,frequently,they,are,purchased.,There,are,four,primary,classes,of,consumer,goods:,convenience,,shopping,,specialty,,and,emergency,goods.Convenience&goods& are,products,that,appeal,to,a,very,large,porTon,of,the,B2C,market.,They,are,typically,consumed,and,purchased,frequently.,Examples,include,food,beverages,,household,cleaning,products,,and,personal,care,items.,These,products,are,sold,in,very,high,volume,,and,the,unit,price,per,item,tends,to,be,relaTvely,low.Consequently,,buyers,see,liXle,value,in,comparison,shopping,on,price,since,such,effort,will,yield,insignificant,savings.,Unit,margins,are,typically,low,due,to,compeTTve,pricingpressures.,Companies,need,to,sell,large,product,volume,to,realize,substanTal,levels,of,profitability.,As,a,direct,consequence,of,this,dynamic,,firms,seek,to,distribute,theirproducts,through,as,many,retail,outlets,as,possible.Shopping&goods,are,products,purchased,and,consumed,less,frequently,than,convenience,goods.,These,are,more,expensive,purchases;,buyers,are,willing,to,invest,more,Tmecomparison,shopping,across,brands,and,between,retailers,to,locate,the,best,values.,These,products,are,usually,higher,involvement,purchases,than,convenience,goods,,butless,involving,than,specialty,goods.,Examples,include,consumer,electronics,,clothing,,home,decor,,and,household,furnishings.,Since,the,market,for,these,goods,is,substanTallysmaller,and,sales,volumes,lower,than,for,convenience,goods,,marketers,are,more,selecTve,when,recruiTng,distribuTon,outlets,to,sell,their,products.Specialty&goods,are,products,that,are,relaTvely,expensive,and,infrequently,purchased.,Consumers,are,deliberate,and,selecTvewhen,making,these,high,involvement,decisions.,In,the,absence,of,prior,experience,or,brand,loyalty,,consumers,may,comparisonshop,extensively,before,reaching,a,decision,on,which,brand,provides,the,best,value,relaTve,to,their,wants,and,needs.,Examplesinclude,highAend ,automobiles,,fine,wines,,and,designer,clothing.,The,target,market,for,each,class,of,specialty,products,is,typicallysmall,,and,the,number,of,outlets,selling,the,products,is,limited.Emergency&goods,are,products,that,a,consumer,may,seek,due,to,sudden,,unexpected,events.,Buyers,oken,rush,to,select,the,firstviable,opTon,encountered.,For,example,,when,confronTng,an,unexpected,snowstorm,in,October,,a,consumer,who,needs,a,snowshovel,will,not,typically,shop,around,to,find,the,best,price.Industrial)Goods)ClassesIndustrial,goods,can,be,classified,according,to,the,way,in,which,they,enter,the,producTon,process,and,their,cost,to,acquire.,Theseitems,are,used,directly,or,indirectly,in,the,transformaTon,of,materials,to,create,products,for,resale.,The,purchase,paXerns,andbehavior,governing,industrial,buying,were,discussed,in,Chapter,5.,There,are,four,basic,classes,of,industrial,goods:,materials,,parts,capital,goods,,and,operaTng,and,business,supplies.Luxury &cars, &like &Audi’s &A6, &are &classified &asspecialty&goods &since &they &are &expensive &andinfrequently &purchased. &Buyers &tend &todevote &substan5al &5me &and &energy &tomaking &the &best &choice.Materials,include,both,basic,raw,materials,and,processed,or,manufactured,materials.,Raw,materials,are,products,obtained,throughdigging,,mining,,harvesTng,,drilling,,and,fishing.,These,are,the,essenTal,ingredients,in,the,producTon,of,higherAorder ,manufacturedgoods.,Processed,materials,include,goods,created,through,the,processing,or,refinement,of,basic,raw,materials.,Corn,,for,example,can,be,transformed,by,refining,processes,to,create,ethanol,,which,in,turn,can,be,used,to,power,producTon,equipment,andAssociated*Pressmanufacturing,faciliTes.,Price,,reliable,supply,,and,onATme ,delivery,are,major,consideraTons,when,companies,are,evaluaTngpotenTal,suppliers.,If,the,supply–demand ,balance,in,materials,markets,is,subject,to,significant,changes,over,Tme,,the,purchase,process,will,most,closely,resemble,themodified,rebuy,situaTon.Parts,are,finished,goods,that,enter,the,manufacturing,process,for,other,products,without,any,further,change,in,their,basic,form.,Basic,components,are,products,used,withinmore,advanced,components,such,as,electrical,wire.,Advanced,components,are,finished,goods,that,can,be,combined,with,basic,components,to,produce,intermediate,piecesa,larger,product.,The,circuit,boards,in,consumer,electronics,,for,example,,only,have,funcTonal,value,when,used,to,combine,component,parts,in,accord,with,precise,technicalspecificaTons.,Finding,a,reliable,source,for,parts,tends,to,be,less,difficult,than,securing,reliable,sources,for,raw,materials,in,many,instances.,Consequently,,many,buyingsituaTons,for,parts,conform,to,the,straight,rebuy,model,of,industrial,purchasing,once,relaTonships,with,good,suppliers,have,been,established.Capital&goods,are,longAlasTng ,installaTons,and,equipment,that,are,used,in,the,producTon,or,management,of,finished,products.,Equipment,includes,portable,items,such,ashttps://content.ashford.edu/print/AUBUS620.12.1?sections=front_mat…ontent&clientToken=14e7d2a3-03dc-b11c-287e-598d8e5e8cf2&np=sec1.1Page 8 of 70Print10/27/14, 7:35 PMfactory,machinery,,tools,,computers,,and,forkliks,that,facilitate,producTon,and,operaTons,acTviTes.InstallaTons,include,office,buildings,,factories,,and,fixedAlocaTon ,equipment,(e.g.,,power,plants).,InstallaTonsare,among,the,most,expensive,capital,purchases,that,any,organizaTon,can,make.,This,purchasing,processalways,corresponds,to,the,new,task,buying,situaTon,and,procedures,described,in,previous,chapters.Opera5ng&and&business&supplies,are,shortAlived ,goods,used,to,support,the,rouTne,operaTons,of,the,firm.OperaTng,supplies,such,as,lubricaTng,oil,for,machine,tools,are,products,specifically,used,to,support,theproducTon,funcTon.,Business,supplies,are,those,items,used,to,support,the,maintenan

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