I Product Development and the Total Product Offer value good quality at a fair price a Distributed Product Development distributed product development handing off various parts of your innovation process often to companies in other countries b Developing a Total Product Offer total product offer everything consumers evaluate when deciding whether to buy something also called a value package basic product aka core product and total product offer aka augmented product c Product Lines and the Product Mix product line group of products that are physically similar or intended for a similar market product mix the combination of all product lines offered by a manufacturer II Product Differentiation product differentiation the creation of real or perceived product differences a Marketing Different Classes of Consumer Goods and Services 1 Convenience goods and services products the consumer wants to purchase frequently and with a minimum effort 2 Shopping goods and services products the consumer buys only after comparing value quality price and style from a variety of sellers 3 Specialty goods and services consumer products with unique characteristics and brand identity fine watches expensive wine fur coats jewelry 4 Unsought goods and services products consumers are unaware of haven t necessarily thought of buying or suddenly find they need to solve an unexpected candy snacks gas banking services clothing shoes appliances problem car towing burial services insurance b Marketing Industrial Goods and Services sold in business to business market III Packaging Changes the Product Packages must 1 Attract buyers attentions industrial good products used in the product of other products sometimes called business goods or B2B goods 2 Protect the goods inside stand up under handling and storage be tamperproof and deter theft 3 Be easy to open and use 4 Describe and give information about the contents 5 Explain the benefits of the good inside 6 Provide information on warranties warnings and other consumer matters 7 Give some indication of price value and uses Universal Product Codes UPCs help stores control inventory Radio Frequency Idendtification RFID chip tells company where product is at all times a The Growing Importance of Packaging The Fair Packaging and Labeling Act was passed to give consumers more quantity and value information on product packaging bundling combines goods and or services for a single price IV Branding and Brand Equity brand a name symbol or design or combination thereof that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors trademark brand that has exclusive legal protection for both its brand name and its design For buyer ensures quality reduces search time adds prestige to purchases For seller facilitates new product introductions help promotional efforts add to repeat purchases differentiate products so prices can be set higher a Brand Categories Manufacturers brands represent manufacturers that distribute products nationally Dealer private label brands products that don t carry the manufacturer s name but carry a distributor or retailer s name instead also known as house brands or distributor brands generic name name for a whole product category generic goods non branded products that usually sell at a sizable discount compared to national or private label brands knockoff brands illegal copies of national brand name goods b Generating Brand Equity and Loyalty brand equity the value of the brand name and associated symbols brand loyalty the degree to which customers are satisfied like the brand and are committed to further purchases brand awareness how quickly or easily a given brand name comes to ind when someone mentions a product category factors influencing perception of quality include price appearance and reputation brand preference consumers prefer one brand over another brand insistence consumers insists on a brand c Creating Brand Associations brand association the linking of a brand to other favorable images like famous product users a celebrity or a particular geographic area d Brand Management aka product manager brand manager has direct responsibility for one brand or product line and manages all the elements of its marketing mix product price place promotion V The New Product Development Process over 80 of products introduced in any year fail to reach their business objectives New product development for producers 1 Idea Generation based on consumer wants and needs 2 Product screening 3 Product analysis 5 Testing 4 Development including building prototypes 6 Commercialization bringing product to market a Generating New Product Ideas b Product Screening c Product Analysis product screening reduces the number of new product ideas a firm is working on at any not time so it can focus on the most promising product analysis making cost estimates and sales forecasts to get a feeling for the profitability of new product ideas d Product Development and Testing concept testing taking a product idea to consumers to test their reactions e Commercialization commercialization promoting a product to distributors and retailers to get wide distribution and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers product life cycle a theoretical model of what happens to sales and profits for a product class over time the four stages are introduction growth maturity and VI The Product Life Cycle decline a Example of the Product Life Cycle b Using the Product Life Cycle VII Competitive Pricing 3 Achieving greater market share 4 Creating an image 5 Furthering social objectives b Cost Based Pricing c Demand Based Pricing d Competition Based Pricing a Pricing Objectives 2 Building traffic 1 Achieving target return on investment or profit loss leaders certain products advertised at or below cost to attract people target costing designing a product so that it satisfies customers and meets the profit margins desired by the firm final price is an input to the product development process not an outcome of it competition based pricing a pricing strategy based on what all the other competitors are doing The price can be set at above or below competitors prices Price leadership the strategy by which one or more dominant firms set the pricing practices that all competitors in an industry follow e Break Even Analysis break even