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  • Chapter 11 Developing and Managing Products

Transcript

  • 1. Create the Product
  • 2. What is a Product?
    • Physical Objects
    • Services
    • Events
    • Persons
    • Places
    • Organizations
    • Ideas
    • Combinations of above
    • Anything that can be acquired, used, consumed, adopted or enjoyed to satisfy a want or need
    • The starting point of the Marketing Mix
  • 3. Build a Better Mousetrap
    • Value proposition: Benefits consumers receive when buying a good or service
      • Tangible vs. intangible
      • Durable vs. nondurable
  • 4. Product Layers Brand Name Quality Level Packaging Design Features Delivery & Credit Installation Warranty After- Sale Service Core Benefit or Service Actual Product Core Product Augmented Product
  • 5. Product Classifications
    • Unsought Products
    • New innovations
    • Little interest until need arises
    • Much advertising & personal
    • selling
    • Specialty Products
    • Special purchase efforts
    • High $/unique characteristics
    • Brand identification
    • Few purchase locations
    • Shopping Products
    • Buy less frequently
    • Higher price
    • Fewer purchase locations
    • Comparison shop
    • Convenience Products
    • Buy frequently & immediately
    • Low priced
    • Mass advertising
    • Many purchase locations
  • 6. Product Group Activity
    • Unsought products often call to mind situations that a consumer would like to ignore.
    • Break into small groups and select an example of an unsought product.
    • Suggest a Marketing approach to get consumers interested in, and ultimately purchase, such a product?
    • How does ethics factor in to promoting this product?
  • 7. Business-to-Business Produc ts
    • Classified by how organizations use them
    • Equipment
    • Maintenance, repair & operating (MRO)
    • Raw materials
    • Processed materials
    • Specialized services
    • Component parts
  • 8. Other Marketable Entities Profit (businesses) & nonprofit (schools & churches) Public health, environmental, family planning, etc. Politicians, entertainers, sports figures, doctors & lawyers Organizations Persons Places Business sites & tourism Ideas
  • 9. “ New and Improved”
    • Innovation: A product that customers perceive to be new & different from existing products
    • The Federal Trade Commission says:
      • A product must be entirely new or changed significantly to be called “new” and
      • May be called “new” for only six months
    • New products are expensive to develop & even more costly if they fail
  • 10. Causes of New Product Failures
    • As many as 80% of new consumer products fail
    • Only 40% are around 5 years after introduction
    • Why?
      • Overestimation of market size
      • Product design problems
      • Product incorrectly positioned, priced, advertised
      • Launched despite poor M/R findings
      • Competitive actions
  • 11. Continuous Innovation
    • A modification to an existing product
    • Most common form of innovation
    • Learning & change are minimal
    • Examples: brand extensions, line extensions
    • Knockoffs copy (with slight modification) the design of an original product
  • 12. Dynamically Continuous Innovation
    • A pronounced modification to an existing product
    • Requires a modest amount of learning or behavior change
    • Convergence: The coming together of 2 or more technologies to create a new system with greater benefits than its parts
  • 13. Discontinuous Innovation
    • A totally new product
    • Creates major changes in the way we live
    • Significant new learning required
    • Examples: microwave ovens, cell phones
  • 14. Innovation Individual Activity
    • Think about 5 new products introduced over the last year.
    • Classify each as a continuous, dynamically continuous or discontinuous innovation.
    • Why did you select those classifications?
  • 15. New Product Development
    • Continuous search for entirely new products or ways to make existing products better
    • Successfully new product introduction is becoming more difficult
      • R&D costs are enormous
      • Products become obsolete faster
      • Slotting fees are high
  • 16. Product Development Phases
    • Phase 1: Idea generation
      • Brainstorm about & systematically search for new products compatible with the firm’s mission
    • Phase 2: Concept development & screening
      • Test ideas for technical & commercial success
      • Choose one(s) with strongest appeal & potential
    • Phase 3: Marketing strategy development
      • Objectives & tactics
  • 17. Product Development Phases
    • Phase 4: Business analysis
      • Assess the product’s commercial viability
    • Phase 5: Technical development
      • Refine & perfect the new product
      • Design prototypes or test versions of the proposed product
  • 18. Product Development Phases
    • Phase 6: Test marketing
      • Test marketing mix in a small geographic area
    • Phase 7: Commercialization
      • Launch the new product
      • Begin full-scale production, distribution, advertising & sales promotion
  • 19. Adoption & Diffusion
    • Product adoption
      • Consumers or businesses begin to buy & use a new product
    • Diffusion
      • Product use spreads throughout a population
      • The tipping point
  • 20. Adoption Pyramid
  • 21. Product Adoption Stages
    • Awareness:
      • Mass advertising generates product awareness
    • Interest:
      • Prospective adopters open to product info
      • Teaser ads used to stimulate interest
    • Evaluation:
      • Consumers weigh costs/benefits or may even make impulse purchases
  • 22. Product Adoption Stages
    • Trial:
      • Sales promotions & product demos critical
    • Adoption:
      • Goes beyond trial use
    • Confirmation:
      • Consumer weighs expected vs. actual benefits & costs
      • Reinforce consumer choice via reminder IMC
  • 23. Categories of Product Adopters
  • 24. Innovation & Adoption Observability Relative Advantage Compatibility Complexity Trialabilty Factors Affecting Consumer Adoption
  • 25. B2B Product Adoption
    • Innovators
      • New, smaller or younger firms
    • Early-adopter firms
      • Market-share leaders
    • Late-majority firms
      • Prefer status quo & have large investments in existing production technology
    • Laggard firms
      • Already losing money
  • 26. Improving New Product Success
    • A successful new product should offer:
      • A superior product (one with higher quality, features & value in use)
      • A well-defined concept (an identified target market, product requirements & benefits)
  • 27. New Product Class Discussion
    • Not all new products are perceived to benefit consumers or society.
    • What are some examples of new products that have made our lives better? Why?
    • Give some examples of products that are harmful to consumers or society. Why?
    • Should there be a way to monitor or police new products that may be harmful?
  • 28. Key Concepts Review
    • Product
    • Core Product
    • Actual Product
    • Augmented product
    • Convenience Product
    • Shopping Product
    • Specialty Product
    • Unsought Product
    • “ New” Product
    • Types of Innovations
    • Product Adoption
    • Product Diffusion
    • Adoption Categories
    • Test Marketing