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Creating the Offering

Creating the Offering

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  • Build a Better Mousetrap: The value Proposition\nThe truth is, that just because a product is better is no guarantee it will succeed. Products must provide benefits that people seek. \n\nA product is anything tangible or intangible, that, through the exchange process, satisfies consumer or business customer needs. Products can be physical goods, services, ideas, people, or places. A good is a tangible product, something that we can see, touch, smell, hear, taste, or possess. In contrast, intangible products—services, ideas, people, places—are products that we can’t always see, touch, taste, smell, or possess.\n\nMarketers think of the products as more than the thing that comes in a package. They view a product as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical good. \n\nA large part of the marketer’s role is creating the value proposition to develop and market products appropriately.\nTroubleshooting Tip: Marketers think of the product as more than just a thing that comes in a package. They view it as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical\ngood. The key word is create, and a large part of the marketer’s role in creating the value proposition is to develop and market products correctly to meet the needs or their target.\n\n
  • Build a Better Mousetrap: The value Proposition\nThe truth is, that just because a product is better is no guarantee it will succeed. Products must provide benefits that people seek. \n\nA product is anything tangible or intangible, that, through the exchange process, satisfies consumer or business customer needs. Products can be physical goods, services, ideas, people, or places. A good is a tangible product, something that we can see, touch, smell, hear, taste, or possess. In contrast, intangible products—services, ideas, people, places—are products that we can’t always see, touch, taste, smell, or possess.\n\nMarketers think of the products as more than the thing that comes in a package. They view a product as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical good. \n\nA large part of the marketer’s role is creating the value proposition to develop and market products appropriately.\nTroubleshooting Tip: Marketers think of the product as more than just a thing that comes in a package. They view it as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical\ngood. The key word is create, and a large part of the marketer’s role in creating the value proposition is to develop and market products correctly to meet the needs or their target.\n\n
  • Build a Better Mousetrap: The value Proposition\nThe truth is, that just because a product is better is no guarantee it will succeed. Products must provide benefits that people seek. \n\nA product is anything tangible or intangible, that, through the exchange process, satisfies consumer or business customer needs. Products can be physical goods, services, ideas, people, or places. A good is a tangible product, something that we can see, touch, smell, hear, taste, or possess. In contrast, intangible products—services, ideas, people, places—are products that we can’t always see, touch, taste, smell, or possess.\n\nMarketers think of the products as more than the thing that comes in a package. They view a product as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical good. \n\nA large part of the marketer’s role is creating the value proposition to develop and market products appropriately.\nTroubleshooting Tip: Marketers think of the product as more than just a thing that comes in a package. They view it as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical\ngood. The key word is create, and a large part of the marketer’s role in creating the value proposition is to develop and market products correctly to meet the needs or their target.\n\n
  • Build a Better Mousetrap: The value Proposition\nThe truth is, that just because a product is better is no guarantee it will succeed. Products must provide benefits that people seek. \n\nA product is anything tangible or intangible, that, through the exchange process, satisfies consumer or business customer needs. Products can be physical goods, services, ideas, people, or places. A good is a tangible product, something that we can see, touch, smell, hear, taste, or possess. In contrast, intangible products—services, ideas, people, places—are products that we can’t always see, touch, taste, smell, or possess.\n\nMarketers think of the products as more than the thing that comes in a package. They view a product as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical good. \n\nA large part of the marketer’s role is creating the value proposition to develop and market products appropriately.\nTroubleshooting Tip: Marketers think of the product as more than just a thing that comes in a package. They view it as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in addition to a physical\ngood. The key word is create, and a large part of the marketer’s role in creating the value proposition is to develop and market products correctly to meet the needs or their target.\n\n
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  • Layers of the Product Concept\nA product is everything that a customer receives in an exchange. A product is made up of the core product, the actual product, and the augmented product. Marketers need to consider how to satisfy customers’ wants and needs at each of these three levels.\n\nThe Core Product\nThe core product consists of all the benefits the product will provide for consumers or business customers. A benefit is an outcome that the customer receives from owning or using a product. Marketing is about supplying benefits, not products. Many products actually provide multiple benefits.\n\n3.2The Actual Product\nThe actual product is the physical good or the delivered service that supplies the desired benefit. The actual product also includes the unique features of the product, such as its appearance or styling, the package, and the brand name.\n\n
  • Layers of the Product Concept\nA product is everything that a customer receives in an exchange. A product is made up of the core product, the actual product, and the augmented product. Marketers need to consider how to satisfy customers’ wants and needs at each of these three levels.\n\nThe Core Product\nThe core product consists of all the benefits the product will provide for consumers or business customers. A benefit is an outcome that the customer receives from owning or using a product. Marketing is about supplying benefits, not products. Many products actually provide multiple benefits.\n\n3.2The Actual Product\nThe actual product is the physical good or the delivered service that supplies the desired benefit. The actual product also includes the unique features of the product, such as its appearance or styling, the package, and the brand name.\n\n
  • Layers of the Product Concept\nA product is everything that a customer receives in an exchange. A product is made up of the core product, the actual product, and the augmented product. Marketers need to consider how to satisfy customers’ wants and needs at each of these three levels.\n\nThe Core Product\nThe core product consists of all the benefits the product will provide for consumers or business customers. A benefit is an outcome that the customer receives from owning or using a product. Marketing is about supplying benefits, not products. Many products actually provide multiple benefits.\n\n3.2The Actual Product\nThe actual product is the physical good or the delivered service that supplies the desired benefit. The actual product also includes the unique features of the product, such as its appearance or styling, the package, and the brand name.\n\n
  • Layers of the Product Concept\nA product is everything that a customer receives in an exchange. A product is made up of the core product, the actual product, and the augmented product. Marketers need to consider how to satisfy customers’ wants and needs at each of these three levels.\n\nThe Core Product\nThe core product consists of all the benefits the product will provide for consumers or business customers. A benefit is an outcome that the customer receives from owning or using a product. Marketing is about supplying benefits, not products. Many products actually provide multiple benefits.\n\n3.2The Actual Product\nThe actual product is the physical good or the delivered service that supplies the desired benefit. The actual product also includes the unique features of the product, such as its appearance or styling, the package, and the brand name.\n\n
  • Layers of the Product Concept\nA product is everything that a customer receives in an exchange. A product is made up of the core product, the actual product, and the augmented product. Marketers need to consider how to satisfy customers’ wants and needs at each of these three levels.\n\nThe Core Product\nThe core product consists of all the benefits the product will provide for consumers or business customers. A benefit is an outcome that the customer receives from owning or using a product. Marketing is about supplying benefits, not products. Many products actually provide multiple benefits.\n\n3.2The Actual Product\nThe actual product is the physical good or the delivered service that supplies the desired benefit. The actual product also includes the unique features of the product, such as its appearance or styling, the package, and the brand name.\n\n
  • Layers of the Product Concept\nA product is everything that a customer receives in an exchange. A product is made up of the core product, the actual product, and the augmented product. Marketers need to consider how to satisfy customers’ wants and needs at each of these three levels.\n\nThe Core Product\nThe core product consists of all the benefits the product will provide for consumers or business customers. A benefit is an outcome that the customer receives from owning or using a product. Marketing is about supplying benefits, not products. Many products actually provide multiple benefits.\n\n3.2The Actual Product\nThe actual product is the physical good or the delivered service that supplies the desired benefit. The actual product also includes the unique features of the product, such as its appearance or styling, the package, and the brand name.\n\n
  • Layers of the Product Concept\nA product is everything that a customer receives in an exchange. A product is made up of the core product, the actual product, and the augmented product. Marketers need to consider how to satisfy customers’ wants and needs at each of these three levels.\n\nThe Core Product\nThe core product consists of all the benefits the product will provide for consumers or business customers. A benefit is an outcome that the customer receives from owning or using a product. Marketing is about supplying benefits, not products. Many products actually provide multiple benefits.\n\n3.2The Actual Product\nThe actual product is the physical good or the delivered service that supplies the desired benefit. The actual product also includes the unique features of the product, such as its appearance or styling, the package, and the brand name.\n\n
  • Layers of the Product Concept\nA product is everything that a customer receives in an exchange. A product is made up of the core product, the actual product, and the augmented product. Marketers need to consider how to satisfy customers’ wants and needs at each of these three levels.\n\nThe Core Product\nThe core product consists of all the benefits the product will provide for consumers or business customers. A benefit is an outcome that the customer receives from owning or using a product. Marketing is about supplying benefits, not products. Many products actually provide multiple benefits.\n\n3.2The Actual Product\nThe actual product is the physical good or the delivered service that supplies the desired benefit. The actual product also includes the unique features of the product, such as its appearance or styling, the package, and the brand name.\n\n
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  • HOW MARKETERS Classify Products\nMarketers classify products into categories because the categories represent differences in how consumers and business customers feel about products and how they purchase different products. Such an understanding helps marketers develop new products and a marketing mix that satisfies customer needs.\n\nGenerally products are either consumer products or business-to-business products, although sometimes the same products—toilet paper, vacuum cleaners, and light bulbs—are bought by consumers and businesses.\n\n\n
  • How Long Does a Product Last?\nMarketers classify consumer goods as durable or nondurable depending on how long the product lasts. Durable goods are consumer products that provide benefits over a period of months, years, or even decades, such as cars, furniture, and appliances. Nondurable goods, such as newspapers and food, are consumed in the short term.\n\nDurable goods are more likely to be purchased under conditions of high involvement with the purchaser requiring a great deal of information. The purchases of nondurable goods are more likely to be low-involvement decisions, requiring little if any search for information or deliberation.\n\nTip: Marketers classify products into categories because the categories represent differences in how consumers and business customers feel about products and how they purchase different products. Such an understanding helps marketers develop new products and a marketing mix that satisfies customer needs.\n\n
  • How Do Consumers Buy the Product?\nBoth goods and services can be thought of as convenience products, shopping products, specialty products, or unsought products. Classifying products based on how consumers buy them is tied to these differences in consumer decision making.\n\nConvenience Products\nA convenience product typically is a nondurable good or service that consumers purchase frequently with a minimum of comparison and effort. Consumers expect these products to be handy and will buy whatever brands are easy to obtain. In general, convenience products are low priced and widely available. Consumers devote little effort to purchases, and are willing to accept alternative brands if their preferred brand is not available. The most important thing marketers need to consider is to make sure the product is in stores where it’s convenient for customers.\n\nStaples such as milk, bread, and gasoline are basic or necessary items that are available almost everywhere. Most consumers don’t perceive big differences among brands. Marketers must offer staples that consistently meet consumer’s expectations for quality and make sure it is available at a price comparable to the competition’s price.\n\nAn impulse product is something people buy on the spur of the moment.\n\nEmergency products are those products we purchase when we’re in dire need. Bandages, umbrellas, and something to unclog the bathroom sink are examples of emergency products. Because we need the product badly and immediately, price and sometimes product quality may be irrelevant to our decision to purchase. Emergency products must meet our needs and be offered in sizes customers want. Making emergency products available when and where an emergency is likely to occur is the real key to success.\n\nFast-moving consumer goods (FMCG) is a product that sells rapidly in the marketplace. Firms such a Proctor and Gamble refer to the majority of their products as FMCG.\n\nShopping Products\nA shopping product is a good or service for which consumers will spend time and effort gathering information on price, product attributes, and product quality. They are likely to compare alternatives before making a purchase. The purchase of shopping products is typically a limited problem-solving decision. Consumers are only moderately brand loyal. They may visit several stores and devote considerable effort to comparing products.\n\nSome shopping products have different characteristics. For these attribute-based shopping products, such as a new party dress or a pair of designer jeans, consumers spend time and energy finding the best possible product selection. At other times, when choices available in the marketplace are just about the same, products are considered shopping products because of differences in price. For these price-based shopping products, determined shoppers will visit numerous stores in hope of saving money.\n\nIn business-to-consumer e-commerce, shopping is easier when consumers use “shopbots” or “intelligent agents,” which are computer programs that find sites selling a particular product.\n\nSpecialty Products\nA specialty product has unique characteristics that are important to buyers at any price. Consumers usually know a good deal about specialty products and are loyal to specific brands. Generally, a specialty product is an extended problem-solving purchase that requires a lot of effort to choose. That means that firms selling these kinds of products need to create marketing strategies that make their product stand apart from the rest.\n\nUnsought Products\nUnsought products are goods or services (other than convenience products) for which a consumer has little awareness or interest until a need arises. It requires a good deal of advertising or personal selling to interest people in unsought products. Marketers are challenged to find convincing ways to interest consumers in unsought products.\n\n\n
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  • “New and Improved!”: The Process of Innovation\nThe Federal Trade Commission says that legally, 1) a product must be entirely new or changed significantly to be called new, and 2) a product may be called new for only six months.\n\nFrom a marketing perspective, a new product or innovation is anything that customers perceive as new and different. Innovations may be cutting-edge; may provide benefits never available before; or may simply be an existing product with a new style, in a different color, or with some new feature.\n\nIt’s Important to Understand How Innovations Work\nUnderstanding innovations can be critical to the success of firms for at least two reasons. First, technology is advancing at a dizzying pace. Products are introduced and become obsolete faster than ever before. \n\nAnother reason why understanding new products is important is the high cost of developing new products and the even higher cost of new products that fail.\n\nMarketers must understand what it takes to develop a new product successfully. \n\nNew-product development is an important contribution to society. \n\n
  • Types of Innovations\nMarketers classify innovations into three categories based on their degree of newness. These categories are based on the amount of disruption or change they bring to people’s lives.\nContinuous Innovations\nA continuous innovation is a modification to an existing product. This type of modification can set one brand apart from its competitors. The consumer doesn’t have to learn anything new to use a continuous innovation. From a marketing perspective, this means that it is far easier to convince consumers to adopt this kind of new product.\nDynamically Continuous Innovations\nA dynamically continuous innovation is a pronounced modification to an existing product that requires a modest amount of learning or change in behavior to use it. CDs have evolved from cassettes, from eight-track tapes, and from records.\n\n\n
  • Types of Innovations\nMarketers classify innovations into three categories based on their degree of newness. These categories are based on the amount of disruption or change they bring to people’s lives.\nContinuous Innovations\nA continuous innovation is a modification to an existing product. This type of modification can set one brand apart from its competitors. The consumer doesn’t have to learn anything new to use a continuous innovation. From a marketing perspective, this means that it is far easier to convince consumers to adopt this kind of new product.\nDynamically Continuous Innovations\nA dynamically continuous innovation is a pronounced modification to an existing product that requires a modest amount of learning or change in behavior to use it. CDs have evolved from cassettes, from eight-track tapes, and from records.\n\n\n
  • Types of Innovations\nMarketers classify innovations into three categories based on their degree of newness. These categories are based on the amount of disruption or change they bring to people’s lives.\nContinuous Innovations\nA continuous innovation is a modification to an existing product. This type of modification can set one brand apart from its competitors. The consumer doesn’t have to learn anything new to use a continuous innovation. From a marketing perspective, this means that it is far easier to convince consumers to adopt this kind of new product.\nDynamically Continuous Innovations\nA dynamically continuous innovation is a pronounced modification to an existing product that requires a modest amount of learning or change in behavior to use it. CDs have evolved from cassettes, from eight-track tapes, and from records.\n\n\n
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  • New-Product development\nProduct development can mean creating totally new products that have never before been on the market or looking for ways to make an existing product better.\n\nNew-product development is increasingly important to firms. Technology is changing at an ever-increasing rate so that products are developed, get adopted, and then are replaced by better products faster and faster. Competition in our global marketplace makes it essential for firms to continuously offer new choices for consumers if they are to compete with companies all around the world rather than just down the street. Firms need to stay on top of current developments in popular culture, religion, and politics, to develop products that are consistent with consumers’ mind-sets. Being at the right place at the right time doesn’t hurt.\n\nSuccessful new-product introductions are becoming more and more difficult. The costs of research and development are often so huge that firms must limit the number of new products in development. Because products are outdated faster than ever, firms have less time to recover their research-and-development costs. Products compete for limited shelf space and retailers often charge manufacturers exorbitant slotting fees to stock a new product, increasing manufacturers’ costs even more. Firms must reduce the time it takes to get good products to market and increase the speed of adoption to quickly recover these costs.\n\nNew-product development generally occurs in the following seven phases.\n
  • New-Product development\nProduct development can mean creating totally new products that have never before been on the market or looking for ways to make an existing product better.\n\nNew-product development is increasingly important to firms. Technology is changing at an ever-increasing rate so that products are developed, get adopted, and then are replaced by better products faster and faster. Competition in our global marketplace makes it essential for firms to continuously offer new choices for consumers if they are to compete with companies all around the world rather than just down the street. Firms need to stay on top of current developments in popular culture, religion, and politics, to develop products that are consistent with consumers’ mind-sets. Being at the right place at the right time doesn’t hurt.\n\nSuccessful new-product introductions are becoming more and more difficult. The costs of research and development are often so huge that firms must limit the number of new products in development. Because products are outdated faster than ever, firms have less time to recover their research-and-development costs. Products compete for limited shelf space and retailers often charge manufacturers exorbitant slotting fees to stock a new product, increasing manufacturers’ costs even more. Firms must reduce the time it takes to get good products to market and increase the speed of adoption to quickly recover these costs.\n\nNew-product development generally occurs in the following seven phases.\n
  • New-Product development\nProduct development can mean creating totally new products that have never before been on the market or looking for ways to make an existing product better.\n\nNew-product development is increasingly important to firms. Technology is changing at an ever-increasing rate so that products are developed, get adopted, and then are replaced by better products faster and faster. Competition in our global marketplace makes it essential for firms to continuously offer new choices for consumers if they are to compete with companies all around the world rather than just down the street. Firms need to stay on top of current developments in popular culture, religion, and politics, to develop products that are consistent with consumers’ mind-sets. Being at the right place at the right time doesn’t hurt.\n\nSuccessful new-product introductions are becoming more and more difficult. The costs of research and development are often so huge that firms must limit the number of new products in development. Because products are outdated faster than ever, firms have less time to recover their research-and-development costs. Products compete for limited shelf space and retailers often charge manufacturers exorbitant slotting fees to stock a new product, increasing manufacturers’ costs even more. Firms must reduce the time it takes to get good products to market and increase the speed of adoption to quickly recover these costs.\n\nNew-product development generally occurs in the following seven phases.\n
  • New-Product development\nProduct development can mean creating totally new products that have never before been on the market or looking for ways to make an existing product better.\n\nNew-product development is increasingly important to firms. Technology is changing at an ever-increasing rate so that products are developed, get adopted, and then are replaced by better products faster and faster. Competition in our global marketplace makes it essential for firms to continuously offer new choices for consumers if they are to compete with companies all around the world rather than just down the street. Firms need to stay on top of current developments in popular culture, religion, and politics, to develop products that are consistent with consumers’ mind-sets. Being at the right place at the right time doesn’t hurt.\n\nSuccessful new-product introductions are becoming more and more difficult. The costs of research and development are often so huge that firms must limit the number of new products in development. Because products are outdated faster than ever, firms have less time to recover their research-and-development costs. Products compete for limited shelf space and retailers often charge manufacturers exorbitant slotting fees to stock a new product, increasing manufacturers’ costs even more. Firms must reduce the time it takes to get good products to market and increase the speed of adoption to quickly recover these costs.\n\nNew-product development generally occurs in the following seven phases.\n
  • New-Product development\nProduct development can mean creating totally new products that have never before been on the market or looking for ways to make an existing product better.\n\nNew-product development is increasingly important to firms. Technology is changing at an ever-increasing rate so that products are developed, get adopted, and then are replaced by better products faster and faster. Competition in our global marketplace makes it essential for firms to continuously offer new choices for consumers if they are to compete with companies all around the world rather than just down the street. Firms need to stay on top of current developments in popular culture, religion, and politics, to develop products that are consistent with consumers’ mind-sets. Being at the right place at the right time doesn’t hurt.\n\nSuccessful new-product introductions are becoming more and more difficult. The costs of research and development are often so huge that firms must limit the number of new products in development. Because products are outdated faster than ever, firms have less time to recover their research-and-development costs. Products compete for limited shelf space and retailers often charge manufacturers exorbitant slotting fees to stock a new product, increasing manufacturers’ costs even more. Firms must reduce the time it takes to get good products to market and increase the speed of adoption to quickly recover these costs.\n\nNew-product development generally occurs in the following seven phases.\n
  • New-Product development\nProduct development can mean creating totally new products that have never before been on the market or looking for ways to make an existing product better.\n\nNew-product development is increasingly important to firms. Technology is changing at an ever-increasing rate so that products are developed, get adopted, and then are replaced by better products faster and faster. Competition in our global marketplace makes it essential for firms to continuously offer new choices for consumers if they are to compete with companies all around the world rather than just down the street. Firms need to stay on top of current developments in popular culture, religion, and politics, to develop products that are consistent with consumers’ mind-sets. Being at the right place at the right time doesn’t hurt.\n\nSuccessful new-product introductions are becoming more and more difficult. The costs of research and development are often so huge that firms must limit the number of new products in development. Because products are outdated faster than ever, firms have less time to recover their research-and-development costs. Products compete for limited shelf space and retailers often charge manufacturers exorbitant slotting fees to stock a new product, increasing manufacturers’ costs even more. Firms must reduce the time it takes to get good products to market and increase the speed of adoption to quickly recover these costs.\n\nNew-product development generally occurs in the following seven phases.\n
  • New-Product development\nProduct development can mean creating totally new products that have never before been on the market or looking for ways to make an existing product better.\n\nNew-product development is increasingly important to firms. Technology is changing at an ever-increasing rate so that products are developed, get adopted, and then are replaced by better products faster and faster. Competition in our global marketplace makes it essential for firms to continuously offer new choices for consumers if they are to compete with companies all around the world rather than just down the street. Firms need to stay on top of current developments in popular culture, religion, and politics, to develop products that are consistent with consumers’ mind-sets. Being at the right place at the right time doesn’t hurt.\n\nSuccessful new-product introductions are becoming more and more difficult. The costs of research and development are often so huge that firms must limit the number of new products in development. Because products are outdated faster than ever, firms have less time to recover their research-and-development costs. Products compete for limited shelf space and retailers often charge manufacturers exorbitant slotting fees to stock a new product, increasing manufacturers’ costs even more. Firms must reduce the time it takes to get good products to market and increase the speed of adoption to quickly recover these costs.\n\nNew-product development generally occurs in the following seven phases.\n
  • Phase 1: Idea Generation\nIn idea generation, marketers use a variety of sources to come up with great new-product ideas that provide customer benefits and that are compatible with the company mission. These ideas can come from customers, salespeople, service providers, etc. Research is often conducted to come up with new product ideas.\n\nPhase 2: Product Concept Development and Screening\nIn product concept development and screening, ideas are expanded into more complete product concepts. When screening, marketers and researchers examine the chances that the product concept might achieve technical and commercial success. Estimating technical success is assessing whether the new product is technologically feasible. Estimating commercial success is deciding whether anyone is likely to buy the product. \n
  • Phase 1: Idea Generation\nIn idea generation, marketers use a variety of sources to come up with great new-product ideas that provide customer benefits and that are compatible with the company mission. These ideas can come from customers, salespeople, service providers, etc. Research is often conducted to come up with new product ideas.\n\nPhase 2: Product Concept Development and Screening\nIn product concept development and screening, ideas are expanded into more complete product concepts. When screening, marketers and researchers examine the chances that the product concept might achieve technical and commercial success. Estimating technical success is assessing whether the new product is technologically feasible. Estimating commercial success is deciding whether anyone is likely to buy the product. \n
  • Phase 1: Idea Generation\nIn idea generation, marketers use a variety of sources to come up with great new-product ideas that provide customer benefits and that are compatible with the company mission. These ideas can come from customers, salespeople, service providers, etc. Research is often conducted to come up with new product ideas.\n\nPhase 2: Product Concept Development and Screening\nIn product concept development and screening, ideas are expanded into more complete product concepts. When screening, marketers and researchers examine the chances that the product concept might achieve technical and commercial success. Estimating technical success is assessing whether the new product is technologically feasible. Estimating commercial success is deciding whether anyone is likely to buy the product. \n
  • Phase 1: Idea Generation\nIn idea generation, marketers use a variety of sources to come up with great new-product ideas that provide customer benefits and that are compatible with the company mission. These ideas can come from customers, salespeople, service providers, etc. Research is often conducted to come up with new product ideas.\n\nPhase 2: Product Concept Development and Screening\nIn product concept development and screening, ideas are expanded into more complete product concepts. When screening, marketers and researchers examine the chances that the product concept might achieve technical and commercial success. Estimating technical success is assessing whether the new product is technologically feasible. Estimating commercial success is deciding whether anyone is likely to buy the product. \n
  • Phase 1: Idea Generation\nIn idea generation, marketers use a variety of sources to come up with great new-product ideas that provide customer benefits and that are compatible with the company mission. These ideas can come from customers, salespeople, service providers, etc. Research is often conducted to come up with new product ideas.\n\nPhase 2: Product Concept Development and Screening\nIn product concept development and screening, ideas are expanded into more complete product concepts. When screening, marketers and researchers examine the chances that the product concept might achieve technical and commercial success. Estimating technical success is assessing whether the new product is technologically feasible. Estimating commercial success is deciding whether anyone is likely to buy the product. \n
  • Phase 1: Idea Generation\nIn idea generation, marketers use a variety of sources to come up with great new-product ideas that provide customer benefits and that are compatible with the company mission. These ideas can come from customers, salespeople, service providers, etc. Research is often conducted to come up with new product ideas.\n\nPhase 2: Product Concept Development and Screening\nIn product concept development and screening, ideas are expanded into more complete product concepts. When screening, marketers and researchers examine the chances that the product concept might achieve technical and commercial success. Estimating technical success is assessing whether the new product is technologically feasible. Estimating commercial success is deciding whether anyone is likely to buy the product. \n
  • Phase 3: Marketing Strategy Development\nIn the third phase, marketers must identify the target market, estimate its size, and determine how the product can be positioned to effectively address the target market’s needs. This stage includes planning for pricing, distribution, and promotion expenditures both for the introduction of the new product and for the long run.\n\nPhase 4: Business Analysis\nA business analysis is conducted to find out if a product can be a profitable contribution to the organization’s product mix. Questions to be considered include, how much potential demand is there for the product and does the firm have the resources that will be required for successful development and introduction of the product?\nThe business analysis begins with assessing how the product will fit into the firm’s total product mix. Will it increase overall sales or cannibalize existing sales?\n
  • Phase 3: Marketing Strategy Development\nIn the third phase, marketers must identify the target market, estimate its size, and determine how the product can be positioned to effectively address the target market’s needs. This stage includes planning for pricing, distribution, and promotion expenditures both for the introduction of the new product and for the long run.\n\nPhase 4: Business Analysis\nA business analysis is conducted to find out if a product can be a profitable contribution to the organization’s product mix. Questions to be considered include, how much potential demand is there for the product and does the firm have the resources that will be required for successful development and introduction of the product?\nThe business analysis begins with assessing how the product will fit into the firm’s total product mix. Will it increase overall sales or cannibalize existing sales?\n
  • Phase 3: Marketing Strategy Development\nIn the third phase, marketers must identify the target market, estimate its size, and determine how the product can be positioned to effectively address the target market’s needs. This stage includes planning for pricing, distribution, and promotion expenditures both for the introduction of the new product and for the long run.\n\nPhase 4: Business Analysis\nA business analysis is conducted to find out if a product can be a profitable contribution to the organization’s product mix. Questions to be considered include, how much potential demand is there for the product and does the firm have the resources that will be required for successful development and introduction of the product?\nThe business analysis begins with assessing how the product will fit into the firm’s total product mix. Will it increase overall sales or cannibalize existing sales?\n
  • Phase 5: Technical Development\nIn technical development, a firm’s engineers work with marketers in refining the design and production processes. Typically, a company’s research-and-development department will develop one or more physical versions or prototypes of the product, which may be evaluated by potential customers.\n\nIn this stage, the company must decide which parts of the finished goods the company will make and which parts will be purchased. \n\nTechnical development sometimes requires application for a patent.\n\nPhase 6: Test Marketing\nIn test marketing, the firm tries out the complete marketing plan—the distribution, advertising, and sales promotion—but in small geographic areas that are similar to the larger market it hopes to enter.\n\nThere are pluses and minuses to test marketing. On the negative side, it is expensive and competition can find out about your new product and develop strategies to thwart your efforts. On the positive side, marketers can evaluate and improve the marketing program—or find out if the product is a failure.\n\nBecause of the problems with test marketing, marketers sometimes conduct simulated test marketing that imitates the introduction of a product into the marketplace using special computer software. The test market simulation model uses that information to predict the product’s success much less expensively (and more discreetly) than a traditional test market.\n
  • Phase 5: Technical Development\nIn technical development, a firm’s engineers work with marketers in refining the design and production processes. Typically, a company’s research-and-development department will develop one or more physical versions or prototypes of the product, which may be evaluated by potential customers.\n\nIn this stage, the company must decide which parts of the finished goods the company will make and which parts will be purchased. \n\nTechnical development sometimes requires application for a patent.\n\nPhase 6: Test Marketing\nIn test marketing, the firm tries out the complete marketing plan—the distribution, advertising, and sales promotion—but in small geographic areas that are similar to the larger market it hopes to enter.\n\nThere are pluses and minuses to test marketing. On the negative side, it is expensive and competition can find out about your new product and develop strategies to thwart your efforts. On the positive side, marketers can evaluate and improve the marketing program—or find out if the product is a failure.\n\nBecause of the problems with test marketing, marketers sometimes conduct simulated test marketing that imitates the introduction of a product into the marketplace using special computer software. The test market simulation model uses that information to predict the product’s success much less expensively (and more discreetly) than a traditional test market.\n
  • Phase 5: Technical Development\nIn technical development, a firm’s engineers work with marketers in refining the design and production processes. Typically, a company’s research-and-development department will develop one or more physical versions or prototypes of the product, which may be evaluated by potential customers.\n\nIn this stage, the company must decide which parts of the finished goods the company will make and which parts will be purchased. \n\nTechnical development sometimes requires application for a patent.\n\nPhase 6: Test Marketing\nIn test marketing, the firm tries out the complete marketing plan—the distribution, advertising, and sales promotion—but in small geographic areas that are similar to the larger market it hopes to enter.\n\nThere are pluses and minuses to test marketing. On the negative side, it is expensive and competition can find out about your new product and develop strategies to thwart your efforts. On the positive side, marketers can evaluate and improve the marketing program—or find out if the product is a failure.\n\nBecause of the problems with test marketing, marketers sometimes conduct simulated test marketing that imitates the introduction of a product into the marketplace using special computer software. The test market simulation model uses that information to predict the product’s success much less expensively (and more discreetly) than a traditional test market.\n
  • Phase 5: Technical Development\nIn technical development, a firm’s engineers work with marketers in refining the design and production processes. Typically, a company’s research-and-development department will develop one or more physical versions or prototypes of the product, which may be evaluated by potential customers.\n\nIn this stage, the company must decide which parts of the finished goods the company will make and which parts will be purchased. \n\nTechnical development sometimes requires application for a patent.\n\nPhase 6: Test Marketing\nIn test marketing, the firm tries out the complete marketing plan—the distribution, advertising, and sales promotion—but in small geographic areas that are similar to the larger market it hopes to enter.\n\nThere are pluses and minuses to test marketing. On the negative side, it is expensive and competition can find out about your new product and develop strategies to thwart your efforts. On the positive side, marketers can evaluate and improve the marketing program—or find out if the product is a failure.\n\nBecause of the problems with test marketing, marketers sometimes conduct simulated test marketing that imitates the introduction of a product into the marketplace using special computer software. The test market simulation model uses that information to predict the product’s success much less expensively (and more discreetly) than a traditional test market.\n
  • Phase 5: Technical Development\nIn technical development, a firm’s engineers work with marketers in refining the design and production processes. Typically, a company’s research-and-development department will develop one or more physical versions or prototypes of the product, which may be evaluated by potential customers.\n\nIn this stage, the company must decide which parts of the finished goods the company will make and which parts will be purchased. \n\nTechnical development sometimes requires application for a patent.\n\nPhase 6: Test Marketing\nIn test marketing, the firm tries out the complete marketing plan—the distribution, advertising, and sales promotion—but in small geographic areas that are similar to the larger market it hopes to enter.\n\nThere are pluses and minuses to test marketing. On the negative side, it is expensive and competition can find out about your new product and develop strategies to thwart your efforts. On the positive side, marketers can evaluate and improve the marketing program—or find out if the product is a failure.\n\nBecause of the problems with test marketing, marketers sometimes conduct simulated test marketing that imitates the introduction of a product into the marketplace using special computer software. The test market simulation model uses that information to predict the product’s success much less expensively (and more discreetly) than a traditional test market.\n
  • Phase 5: Technical Development\nIn technical development, a firm’s engineers work with marketers in refining the design and production processes. Typically, a company’s research-and-development department will develop one or more physical versions or prototypes of the product, which may be evaluated by potential customers.\n\nIn this stage, the company must decide which parts of the finished goods the company will make and which parts will be purchased. \n\nTechnical development sometimes requires application for a patent.\n\nPhase 6: Test Marketing\nIn test marketing, the firm tries out the complete marketing plan—the distribution, advertising, and sales promotion—but in small geographic areas that are similar to the larger market it hopes to enter.\n\nThere are pluses and minuses to test marketing. On the negative side, it is expensive and competition can find out about your new product and develop strategies to thwart your efforts. On the positive side, marketers can evaluate and improve the marketing program—or find out if the product is a failure.\n\nBecause of the problems with test marketing, marketers sometimes conduct simulated test marketing that imitates the introduction of a product into the marketplace using special computer software. The test market simulation model uses that information to predict the product’s success much less expensively (and more discreetly) than a traditional test market.\n
  • Phase 5: Technical Development\nIn technical development, a firm’s engineers work with marketers in refining the design and production processes. Typically, a company’s research-and-development department will develop one or more physical versions or prototypes of the product, which may be evaluated by potential customers.\n\nIn this stage, the company must decide which parts of the finished goods the company will make and which parts will be purchased. \n\nTechnical development sometimes requires application for a patent.\n\nPhase 6: Test Marketing\nIn test marketing, the firm tries out the complete marketing plan—the distribution, advertising, and sales promotion—but in small geographic areas that are similar to the larger market it hopes to enter.\n\nThere are pluses and minuses to test marketing. On the negative side, it is expensive and competition can find out about your new product and develop strategies to thwart your efforts. On the positive side, marketers can evaluate and improve the marketing program—or find out if the product is a failure.\n\nBecause of the problems with test marketing, marketers sometimes conduct simulated test marketing that imitates the introduction of a product into the marketplace using special computer software. The test market simulation model uses that information to predict the product’s success much less expensively (and more discreetly) than a traditional test market.\n
  • Phase 7: Commercialization\nCommercialization means the launching of a new product, and it requires full-scale production, distribution, advertising, and sales promotion. A launch requires planning and careful preparation. A launch involves a huge element of risk.\n\n
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  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • Stages in Consumer Adoption of a New Product\nA person typically goes through six stages of the adoption process. At every stage, people drop out of the process, so the proportion of consumers who wind up using the innovation on a consistent basis is a fraction of those who are exposed to it.\n\n7.1.1Awareness\nTo make consumers aware of a new product, marketers may conduct a massive advertising campaign called a media blitz. This strategy works for new products when consumers see a new product as something they want and need and just can’t live without.\n\n7.1.2Interest\nInterest means that a prospective adopter begins to see how a new product might satisfy an existing or newly-realized need. Interest also means that consumers look for and are open to information about the innovation. Marketers often design teaser advertisements that give prospective customers just enough information about the new product to make them curious and to stimulate their interest. Some consumers drop out of the process at this point.\n\n7.1.3Evaluation\nIn the evaluation stage, a prospect weighs the costs and benefits of the new product. Marketers often build interest for a product or service by showing how it will benefit customers.\n\nLittle evaluation occurs with an impulse purchase. An impulse purchase is a purchase made without any planning or search effort. \n\nAgain, some potential adopters will drop out at this stage.\n\n7.1.4Trial\nTrial means the potential adopters will actually experience or use the product for the first time. Often marketers stimulate trial by providing opportunities for consumers to sample the product. \n\nAs in the other stages, some consumers will move on in the process and others will drop out.\n\n7.1.5Adoption\nIn the adoption stage, a prospect actually buys a product. This does not mean that all organizations or individuals who first choose an innovation are permanent customers. Marketers need to provide follow-up contacts and communications with adopter to ensure they are satisfied and remain loyal to the new product over time.\n\n7.1.6Confirmation\nAfter adopting an innovation, a customer weighs expected versus actual benefits and costs. Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation. Marketers feel that reselling the customer in the confirmation stage is important as loyal customers may decide that a new product is not meeting expectations.\n\n
  • 1.Product adoption is the process by which a consumer or business customer begins to buy and use a new good, service, or idea. Diffusion describes how the use of a product spreads throughout a population. After months or years spent developing a new product, the real challenge to firms is getting consumers to buy and use the product and to do so quickly to recover the costs of product development and launch. A tipping point occurs when a product’s sales spike from a slow climb to unprecedented new levels—often accompanied by steep price declines.\n\n
  • 1.Product adoption is the process by which a consumer or business customer begins to buy and use a new good, service, or idea. Diffusion describes how the use of a product spreads throughout a population. After months or years spent developing a new product, the real challenge to firms is getting consumers to buy and use the product and to do so quickly to recover the costs of product development and launch. A tipping point occurs when a product’s sales spike from a slow climb to unprecedented new levels—often accompanied by steep price declines.\n\n
  • The Diffusion of Innovations\nDiffusion describes how the use of a product spreads throughout a population. Based on adopters’ roles in the diffusion process, experts have classified them into five categories.\n\nAdopter Categories\nInnovators are roughly the first 2.5 percent of adopters. This segment is extremely adventurous and willing to take risks with new products. Innovators are typically well educated, younger, better off financially than others in the population and worldly. Innovators pride themselves on trying new products.\n\nEarly adopters, approximately 13.5 percent of adopters, buy product innovations early in the diffusion process but not as early as innovators. Unlike innovators, early adopters have greater concern for social acceptance. Typically, they are heavy media users and often are heavy users of a new-product category. Others in the population often look to early adopters for their opinions on various topics, making early adopters key to a new product’s success. For this reason, marketers often target them in developing advertising and other communications efforts. \n\nThe early majority, roughly 34 percent of adopters, avoids being either first or last to try an innovation. They are typically middle-class consumers and are deliberate and cautious. Early majority consumers have slightly above-average education and income levels. When the early majority adopts a product, it is no longer considered new or different—it is, in essence already established.\n\nLate majority adopters, about 34 percent of the population, are older, more conservative, and typically have lower-than-average levels of education and income. The late majority adopters avoid trying a new product until it is no longer risky. By that time, the product has become an economic necessity or there is pressure from peer groups to adopt.\n\nLaggards, about 16 percent of adopters, are the last in a population to adopt a new product. Laggards are typically lower in social class than other adopter categories and are bound by tradition. By the time laggards adopt a product, it may already be superseded by other innovations.\n\nBy understanding these adopter categories, marketers are able to better develop strategies that will speed the diffusion or widespread use of their products.\n
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Chapter 8 Chapter 8 Presentation Transcript

  • Chapter 8Creating the “offering”
  • Module 1
  • Chapter Objectives1. Articulate the value proposition.2. Explain the layers of a product.3. Describe how marketers classify products.4. Understand the importance and types of product innovations.5. Show how firms develop new products.6. Explain the process of product adoption and the diffusion of innovations.
  • Make Marketing Value DecisionsUnderstand Customers’ Value Needs Create the Value PropositionCommunicate the Value Proposition Deliver the Value Proposition
  • Theme: Build products with the benefits that people seek.
  • Value PropositionTheme: Build products with the benefits that people seek.
  • The value proposition is the customer’s perception of the benefits received if the product is purchased. Value PropositionTheme: Build products with the benefits that people seek.
  • The valueWhat is the the customer’s perception of the benefits proposition is true benefit of the mousetrap?? received if the product is purchased. Value PropositionTheme: Build products with the benefits that people seek.
  • The valueWhat is the the customer’s perception of the benefits proposition is true benefit of the mousetrap?? received if the product is purchased. Value PropositionTheme: Build products with the benefits that people seek.
  • rch mers d ata sea cu sto e rn e t re w patt ark r vie seM Inte rcha d tan nces Pu ers flue nd In U al ltur Cu age How do we know f us no what atio s ervbenefits people seek? Ob Theme: Build products with the benefits that people seek.
  • rch mers d ata sea cu sto e rn e t re w patt ark r vie seM Inte rcha d tan nces Pu ers flue nd In U al ltur Cu age How do we know f us no what atio s ervbenefits people seek? ObCustomers cannot always explain the benefits they seek Theme: Build products with the benefits that people seek.
  • Understand Customers’ Value Needs rch mers d ata sea cu sto e rn e t re w patt ark r vie se M Inte rcha d tan nces Pu ers flue nd In U al ltur Cu age How do we know f us no what atio s erv benefits people seek? Ob Customers cannot always explain the benefits they seek Theme: Build products with the benefits that people seek.
  • Product Value Price Value Customers seek value in each element of the Promotion marketing mix. Place Value Value Theme: Build products with the benefits that people seek & offer value propositions better than competitors.
  • Product Value Price Value Features, attributes of the product, Customers seek product carries meaning value in each element of the Promotion marketing mix. Place Value Value Theme: Build products with the benefits that people seek & offer value propositions better than competitors.
  • Product Value Price Value Features, attributes of the product, Good deals, low prices, Customers seek product carries meaning price=quality value in each element of the Promotion marketing mix. Place Value Value Theme: Build products with the benefits that people seek & offer value propositions better than competitors.
  • Product Value Price Value Features, attributes of the product, Good deals, low prices, Customers seek product carries meaning price=quality value in each element of the Promotion marketing mix. Place ValueAvailability, ease of purchase Value Theme: Build products with the benefits that people seek & offer value propositions better than competitors.
  • Product Value Price Value Features, attributes of the product, Good deals, low prices, Customers seek product carries meaning price=quality value in each element of the Promotion marketing mix. Place ValueAvailability, ease of purchase Value Coupons, awareness Theme: Build products with the benefits that people seek & offer value propositions better than competitors.
  • Product Value Price Value Features, attributes of the product, Good deals, low prices, Customers seek product carries meaning price=quality value in each element of the Promotion marketing mix. Place Value Availability, ease of purchase Value Coupons, awarenessTheme: Build products with the benefits that people seek & offer value propositions better than competitors.
  • Can you spot the value proposition(s)? iPod: Video 1
  • Can you spot the value proposition(s)? iPod: Video 2
  • Can you spot the value proposition(s)? iPod: Video 3
  • Chapter 8Module 2
  • If you build it they will come. Creating products with value
  • The Product Concept
  • The Product Concept Core Product
  • The Product Concept Core Product Actual Product
  • The Product Concept Core Product Actual Product Augmented Product
  • The Product ConceptBasic Benefits: foot covering. Protection for feet,safety needs Core Product Actual Product Augmented Product
  • The Product ConceptBasic Benefits: foot covering. Protection for feet,safety needsFeatures: a sneaker, cushioned sole, waterprooffabric, no-slip lacing, etc... (supplies the desiredbenefit) Core Product Actual Product Augmented Product
  • The Product ConceptBasic Benefits: foot covering. Protection for feet,safety needsFeatures: a sneaker, cushioned sole, waterprooffabric, no-slip lacing, etc... (supplies the desiredbenefit)Added-value: The Nike Guarantee, brandrecognition, customized colors & sizing, 30-daymoney back, wide availability & distribution Core Product Actual Product Augmented Product
  • The Product ConceptBasic Benefits: foot covering. Protection for feet,safety needsFeatures: a sneaker, cushioned sole, waterproof Product: is everything a customer receives infabric, no-slip lacing, etc... (supplies the desired the exchangebenefit)Added-value: The Nike Guarantee, brandrecognition, customized colors & sizing, 30-daymoney back, wide availability & distribution Core Product Actual Product Augmented Product
  • Pause: Quick Exercise.What is something you purchased in the last week?Describe the product/service by its 3 layers. Core Product
  • Pause: Quick Exercise.What is something you purchased in the last week?Describe the product/service by its 3 layers. Core Product Actual Product
  • Pause: Quick Exercise.What is something you purchased in the last week?Describe the product/service by its 3 layers. Core Product Actual Product Augmented Product
  • Classify the Product Consumer Products Business Products Durable EquipmentProduct Life NonDurable Maintenance, Repair, Operations Convenience Raw Materials Usage Shopping Processed MaterialsPurchase Style Specialty Specialized Services Unsought Component Parts
  • Consumer Products Durable Higher Involvement: providing Furniture, Cars, product benefit & value-added Clothing, CD’s Affects information is key.Product Behavior Life Lower Involvement: use of habit NonDurable and heuristics, distribution and Food, newspaper, availability is key tanning, etc..
  • Consumer Products Low Involvement: little thought, consumers will buy what is easy. Generally low priced, Convenience/FMCG habitual, emergency, or impulse purchase patterns. Milk, Gum, Bread, Soda Key: distribution Shopping High Involvement: use many evaluativePurchase Affects criteria, many alternatives, high effort & info Style: House, Car, College Behavior gatheringwhere and Key: ease of information, cust service how Specialty High Involvement: Extended P.S., Customers products Roomba, air corks, seek them out, will spend time searching,are bought organic food pay premium prices Key: creating a USP Unsought Tires, Extended warranty, Customers are unaware until a need arises. Life Insurance, Key: create awareness & convince ???
  • So, what’s a new product? Touch WoodProduct from the TechnologyPerspectiveInventions (Devices, Raw Technology) Who makes inventions? Inventions are not products! Xeros Waterless nPower PersonalInnovations (Products) Washing Machine Energy Generator Continuous versus Discontinuous Incremental versus Disruptive Who makes innovations?
  • So, what’s a new product? Touch WoodProduct from the TechnologyPerspectiveInventions (Devices, Raw Technology) Who makes inventions? Inventions are not products! Xeros Waterless nPower PersonalInnovations (Products) Washing Machine Energy Generator Continuous versus Discontinuous Incremental versus Disruptive Who makes innovations? The type of innovation will determine how fast people will adopt it
  • Dynamically Continuous Discontinuous Continuous Innovation Innovation Innovation Brand new- Creates Modification of an Modification of an major changes in the existing product existing product way we do things Requires some learning Consumer does not Consumers must learn or changes in behavior :learn a new way of using to use the new product - core benefit is the product may be intensive improvement
  • Dynamically Continuous Discontinuous Continuous Innovation Innovation Innovation Brand new- Creates Modification of an Modification of an major changes in the existing product existing product way we do things Requires some learning Consumer does not Consumers must learn or changes in behavior :learn a new way of using to use the new product - core benefit is the product may be intensive improvementDifferentiation
  • Dynamically Continuous Discontinuous Continuous Innovation Innovation Innovation Brand new- Creates Modification of an Modification of an major changes in the existing product existing product way we do things Requires some learning Consumer does not Consumers must learn or changes in behavior :learn a new way of using to use the new product - core benefit is the product may be intensive improvementDifferentiation TRIAL!!
  • Dynamically Continuous Discontinuous Continuous Innovation Innovation Innovation Brand new- Creates Modification of an Modification of an major changes in the existing product existing product way we do things Requires some learning Consumer does not Consumers must learn or changes in behavior :learn a new way of using to use the new product - core benefit is the product may be intensive improvementDifferentiation TRIAL!!The type of innovation will determine how fast people will adopt it - and if they might resist it. How far out are profits??
  • Think....What is the type ofinnovation?Identify the core, actual, andaugmented aspects of each.What is the Value Propositionfor each??
  • End Module 2
  • Chapter 8Module 3
  • NPD, Adoption, & Diffusion
  • NPD New Product DevelopmentIdea GenerationConcept Development/ScreeningMarketing Strategy DevelopmentBusiness AnalysisTechnical DevelopmentTest MarketingCommercialization
  • NPD New Product Development Identify ideas that will provide benefits to customers & beIdea Generation compatible with company missionConcept Development/ScreeningMarketing Strategy DevelopmentBusiness AnalysisTechnical DevelopmentTest MarketingCommercialization
  • NPD New Product Development Identify ideas that will provide benefits to customers & beIdea Generation compatible with company missionConcept Development/Screening Turn Ideas into concepts & estimate commercial success.Marketing Strategy DevelopmentBusiness AnalysisTechnical DevelopmentTest MarketingCommercialization
  • NPD New Product Development Identify ideas that will provide benefits to customers & beIdea Generation compatible with company missionConcept Development/Screening Turn Ideas into concepts & estimate commercial success.Marketing Strategy Development Preliminary marketing plan (4 p’s)Business AnalysisTechnical DevelopmentTest MarketingCommercialization
  • NPD New Product Development Identify ideas that will provide benefits to customers & beIdea Generation compatible with company missionConcept Development/Screening Turn Ideas into concepts & estimate commercial success.Marketing Strategy Development Preliminary marketing plan (4 p’s)Business Analysis Estimate profit potential. Demand & cost estimatesTechnical DevelopmentTest MarketingCommercialization
  • NPD New Product Development Identify ideas that will provide benefits to customers & beIdea Generation compatible with company missionConcept Development/Screening Turn Ideas into concepts & estimate commercial success.Marketing Strategy Development Preliminary marketing plan (4 p’s)Business Analysis Estimate profit potential. Demand & cost estimatesTechnical Development the product and manufacturing/production specs DesignTest MarketingCommercialization
  • NPD New Product Development Identify ideas that will provide benefits to customers & beIdea Generation compatible with company missionConcept Development/Screening Turn Ideas into concepts & estimate commercial success.Marketing Strategy Development Preliminary marketing plan (4 p’s)Business Analysis Estimate profit potential. Demand & cost estimatesTechnical Development the product and manufacturing/production specs DesignTest Marketing Will the NP succeed?Commercialization
  • NPD New Product Development Identify ideas that will provide benefits to customers & beIdea Generation compatible with company missionConcept Development/Screening Turn Ideas into concepts & estimate commercial success.Marketing Strategy Development Preliminary marketing plan (4 p’s)Business Analysis Estimate profit potential. Demand & cost estimatesTechnical Development the product and manufacturing/production specs DesignTest Marketing Will the NP succeed?Commercialization Market and Sell the product. Cross your fingers!!
  • Idea GenerationI want my Starbucks anywhere I go Concept Development/Screening Technical success: Can the idea be manufactured to work the way we envision it? Commercial success: Would anyone buy this product?
  • Idea GenerationI want my Starbucks anywhere I go Concept Development/Screening Technical success: Can the idea be manufactured to work the way we envision it? Commercial success: Would anyone buy this product?
  • Idea Generation I want my Starbucks anywhere I goStarbucks celebrates the ritual preparation of coffee, and the sense of comfort, indulgence, and sometimes community that its customers experience. Concept Development/Screening Technical success: Can the idea be manufactured to work the way we envision it? Commercial success: Would anyone buy this product?
  • Idea Generation Compatible with the mission?? I want my Starbucks anywhere I goStarbucks celebrates the ritual preparation of coffee, and the sense of comfort, indulgence, and sometimes community that its customers experience. Concept Development/Screening Technical success: Can the idea be manufactured to work the way we envision it? Commercial success: Would anyone buy this product?
  • Idea Generation Compatible with the mission?? I want my Starbucks anywhere I goStarbucks celebrates the ritual preparation of coffee, and the sense of comfort, indulgence, and sometimes community that its customers experience. Concept Development/Screening Technical success: Can the idea be manufactured to work the way we envision it? Commercial success: Would anyone buy this product?
  • Idea Generation Compatible with the mission?? I want my Starbucks anywhere I goStarbucks celebrates the ritual preparation of coffee, and the sense of comfort, indulgence, and sometimes community that its customers experience. Concept Development/Screening Ideal for currenteconomic Technical success: Can the idea be manufactured toconditions work the way we envision it? Commercial success: Would anyone buy this product?
  • Idea Generation Compatible with the mission?? I want my Starbucks anywhere I goStarbucks celebrates the ritual preparation of coffee, and the sense of comfort, indulgence, and sometimes community that its customers experience. Concept Development/Screening Ideal for current “Instanteconomic Technical success: Can the idea be manufactured to coffeeconditions work the way we envision it? technology exists, but its not good enough for Commercial success: Would anyone buy this product? us!”
  • Marketing Strategy Development • Who is my target market? • How big is it really? • How should we position this product? • How should we price the product? • Where should we sell it? • How should we promote it? Business Analysis • Can I make a profit? • How long will that take? • Do we have the needed resources to meet the needs of the marketing strategy? Schultz said that due to the higher • Will this product increase our overallquality of Via, it would not compete market share, or cannibalize our own existingwith existing instant coffee products. product line?
  • Marketing Strategy Development • Who is my target market? Instant coffee is a $21billion • How big is it really? global market • How should we position this product? • How should we price the product? • Where should we sell it? • How should we promote it? Business Analysis • Can I make a profit? • How long will that take? • Do we have the needed resources to meet the needs of the marketing strategy? Schultz said that due to the higher • Will this product increase our overallquality of Via, it would not compete market share, or cannibalize our own existingwith existing instant coffee products. product line?
  • Marketing Strategy Development • Who is my target market? Instant coffee is a $21billion • How big is it really? global market • How should we position this product? • How should we price the product? • Where should we sell it? • How should we promote it? 3-packs of Via are priced at $2.95; An aggressive television & print ad campaign is planned. The products are considered for sale in company owned stores and other retail distributors Business Analysis • Can I make a profit? • How long will that take? • Do we have the needed resources to meet the needs of the marketing strategy? Schultz said that due to the higher • Will this product increase our overallquality of Via, it would not compete market share, or cannibalize our own existingwith existing instant coffee products. product line?
  • Marketing Strategy Development • Who is my target market? Instant coffee is a $21billion • How big is it really? global market • How should we position this product? • How should we price the product? • Where should we sell it? • How should we promote it? 3-packs of Via are priced at $2.95; An aggressive television & print ad campaign is planned. The products are considered for sale in company owned stores and other retail distributors Business Analysis • Can I make a profit? • How long will that take? • Do we have the needed resources to meet the needs of the marketing strategy? Schultz said that due to the higher • Will this product increase our overallquality of Via, it would not compete market share, or cannibalize our own existingwith existing instant coffee products. product line?
  • Technical Development • Spend time creating the technology • Make prototypes • Let customers evaluate prototypes and continue with those that fare best • Estimate costs of new machinery/capital assets • Consider patents Test Marketing• Use small geographic area to estimate success• Make sure the area is representative of the largerpopulation• Use a small-scale marketing plan in the testmarkets - allows revisions to broad marketing plan• TM is expensive, but can shield the firm fromlarge scale failures.
  • 2 decades of development: Technical Development A microgrinding technique • Spend time creating the technology • Make prototypes • Let customers evaluate prototypes and continue with those that fare best • Estimate costs of new machinery/capital assets • Consider patents Test Marketing• Use small geographic area to estimate success• Make sure the area is representative of the largerpopulation• Use a small-scale marketing plan in the testmarkets - allows revisions to broad marketing plan• TM is expensive, but can shield the firm fromlarge scale failures.
  • 2 decades of development: Technical Development A microgrinding technique • Spend time creating the technology • Make prototypes • Let customers evaluate prototypes and continue with those that fare best • Estimate costs of new machinery/capital assets • Consider patents Test Marketing• Use small geographic area to estimate success• Make sure the area is representative of the largerpopulation• Use a small-scale marketing plan in the testmarkets - allows revisions to broad marketing plan• TM is expensive, but can shield the firm fromlarge scale failures.
  • 2 decades of development: Technical Development A microgrinding technique • Spend time creating the technology • Make prototypes • Let customers evaluate prototypes and continue with those that fare best • Estimate costs of new machinery/capital assets • Consider patents Test markets: New York, Chicago, London In Chicago, people noticed but Test Marketing didn’t buy it. The revised media campaign was to give a free pack• Use small geographic area to estimate success away.• Make sure the area is representative of the largerpopulation• Use a small-scale marketing plan in the testmarkets - allows revisions to broad marketing plan• TM is expensive, but can shield the firm fromlarge scale failures.
  • 2 decades of development: Technical Development A microgrinding technique • Spend time creating the technology • Make prototypes • Let customers evaluate prototypes and continue with those that fare best • Estimate costs of new machinery/capital assets • Consider patents Test markets: New York, Chicago, London In Chicago, people noticed but Test Marketing didn’t buy it. The revised media campaign was to give a free pack• Use small geographic area to estimate success away.• Make sure the area is representative of the largerpopulation “take the taste challenge” and see if you• Use a small-scale marketing plan in the test can tell Via from Starbucks’ fresh-brewedmarkets - allows revisions to broad marketing plan coffee. Additional incentives include a• TM is expensive, but can shield the firm from coupons for a free coffee on your next visit and $1 off your purchase of Via.large scale failures.
  • 2 decades of development: Technical Development A microgrinding technique • Spend time creating the technology • Make prototypes • Let customers evaluate prototypes and continue with those that fare best • Estimate costs of new machinery/capital assets • Consider patents IN taste tests, Test markets: New York, Chicago, people could not Londontell the difference! In Chicago, people noticed but Test Marketing didn’t buy it. The revised media campaign was to give a free pack• Use small geographic area to estimate success away.• Make sure the area is representative of the largerpopulation “take the taste challenge” and see if you• Use a small-scale marketing plan in the test can tell Via from Starbucks’ fresh-brewedmarkets - allows revisions to broad marketing plan coffee. Additional incentives include a• TM is expensive, but can shield the firm from coupons for a free coffee on your next visit and $1 off your purchase of Via.large scale failures.
  • 2 decades of development: Technical Development A microgrinding technique • Spend time creating the technology • Make prototypes • Let customers evaluate prototypes and continue with those that fare best • Estimate costs of new machinery/capital assets • Consider patents He added that Via did not cannibalize Starbucks main business in markets where it was tested. IN taste tests, Test markets: New York, Chicago, people could not Londontell the difference! In Chicago, people noticed but Test Marketing didn’t buy it. The revised media campaign was to give a free pack• Use small geographic area to estimate success away.• Make sure the area is representative of the largerpopulation “take the taste challenge” and see if you• Use a small-scale marketing plan in the test can tell Via from Starbucks’ fresh-brewedmarkets - allows revisions to broad marketing plan coffee. Additional incentives include a• TM is expensive, but can shield the firm from coupons for a free coffee on your next visit and $1 off your purchase of Via.large scale failures.
  • Commercialization• Launch the product• Initiate marketing plan• Takes careful planning and execution that ismonitored constantly• Timing is KEY• Measure success at many points along the way... Starbucks Via Video
  • End Module 3
  • Chapter 8Module 4
  • The product is launched... Now what?
  • Adoption & Diffusion of New Products• Product Adoption: The process by which a consumer or business customer begins to buy and use a new product.• Diffusion: How the use of a product spreads through a population.
  • Stages in Consumer Adoption Process Awareness
  • Stages in Consumer Adoption Process Awareness Interest
  • Stages in Consumer Adoption Process Awareness InterestEvaluation
  • Stages in Consumer Adoption Process Awareness InterestEvaluation Trial
  • Stages in Consumer Adoption Process Awareness InterestEvaluation Trial Adoption
  • Adoption & Diffusion
  • Adoption & DiffusionAdoption is the process by which consumers/businesses begin to buy and use a new product, service or idea.
  • Adoption & DiffusionAdoption is the process by which consumers/businesses begin to buy and use a new product, service or idea. The adoption rate is determined by diffusion: the process by which the product spreads through a population.
  • Early majority: Signals general acceptance of the product, Late majority: deliberate/ ready to try when Early cautious, risk is very low, adopters: product is no purchase is concerned longer “new” or socially with social “different” pressured... acceptance, Laggard: want to be Lower socialInnovators: “cutting class, noadventurous, edge”, are choice left,risk-taking, high targeted product isincome, “in the heavily succeeded byknow” new technologies
  • Recap• Products must provide a value proposition• Managers must understand the product interms of core, actual, augmented• Firms must be able to communicate thisvalue• Degree of Innovation affects the manner inwhich consumers adopt products• Creating new products is systematic andthoughtful process
  • Next: Manage the Product & the PLC
  • End Chapter 8