Alex Hart Study Guide 2 Marketing 301 9 April 2014 Chapter 10 Developing New Products and Services 1 What is a product A good or service idea consisting of a bundle of tangible and intangible attributes that satisfies a consumers needs and is received in exchange for money or something of value The starting point in creating a marketing mix 2 What is the difference between a good a service and an idea a Good Has tangible attributes a consumers five senses can perceive b Service Intangible activities or benefits an organization provides c Idea A though that leads to a product or action or concept 3 What is the difference between a durable and nondurable good a Durable Lasts over many uses appliances cars phones etc b Nondurable An item consumed in one or a few uses Food Fuel etc 4 What are the various ways that products can be classified a Consumer Products Convenience Shopping Specialty Unsought b Business Products Products organizations buy that assist in providing other products for resale 5 What are the four types of consumer products and how do they differ a Convenience Product Buy all the time shampoo etc b Shopping Product Products to think about TV Phone etc c Specialty Product Unusual item Rolex watch specialty food etc d Unsought Product Spontaneous Chocolate you see at a store 6 What is the difference between a component product and support product a Component Product Items that become part of the final product raw materials b Support Product Items used to assist in producing other goods and services car parts etc Installations i ii Accessory equipment iii Supplies iv Industrial services 7 What is product item vs a product line vs a product mix Item A specific version of a product a b Line A group of closely related product items c Mix All products that an organization sells 8 How might marketing dashboards help improve new product performance They show how marketers measure actual market performance versus the goals set in new product planning 9 What are a new product and the various dimensions in defining the newness of a product a Newness Compared with Existing Products i New to the World b Newness from the Consumer s Perspective i Continuous Innovation Requires no new learning ii Dynamically Continuous Innovation Does not require totally new learning iii Discontinuous Innovation Requires new learning and consumption patterns c Newness in Legal Terms d Newness from the Organizations Perspective i New Product Lines ii Product Line Additions iii iv Repositioned Products v Lower Priced Products Improvements or Revisions 10 Why do new products succeed a b c Identifies a well defined target market Identifies specific customers needs wants and preferences Identifies what the product will be and do to satisfy consumers 11 Why do new products fail Incomplete market and product protocol a Insignificant point of difference b No economical access to buyers c d Not satisfying customer needs or critical factors e Bad timing f Poor product quality g Too little market attractiveness h Poor execution of the marketing mix 12 What are the 7 stages of the new product process and what occurs during each stage a New Product Strategy Development Defines the role for a new product in b Idea Generation Developing a pool of concepts to serve as candidates for new terms of the firms overall objectives using i SWOT Analysis ii Environmental Scan products building upon the previous stages results i Employee and Co Worker Suggestions ii Customer and Supplier Suggestions iii Research and Development Labs iv Competitive Products v Smaller Firms Universities and Inventors c Screening and Evaluation Internally and externally evaluates new product ideas to eliminate those that warrant no further effort d Business Analysis Specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections e Development The stage of the new product process that turns the idea on paper into a prototype f Market Testing Involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy i Standard Test Markets ii Controlled Test Markets iii Simulated Test Markets production and sales g Commercialization Positions and launches a new product in full scale Chapter 11 Managing Successful Products Services and Brands 1 What is the product life cycle PLC and the four stages associated with it The stages a new product goes through in the market place a Introduction When a new product is introduced to its intended target market i Sales grow slowly Profit is minimal due to large investment costs ii Heavy spending on advertising and other promotional tools to build awareness and stimulate product trial b Growth Characterized by rapid increases in sales i Competitors appear ii Product proliferation edits and alterations iii Important to broaden distribution for the product c Maturity A slowing of total industry sales or product class revenue i Profit declines due to price competition ii Cost of gaining new buyers rises iii Marketing attention is directed toward holding market share through further product differentiation and finding new buyers d Decline Occurs when sales drop i Environmental changes play a heavy role ii Products consume a disproportionate share of management and financial resources relative to their future worth iii Product deletion harvesting 2 What are four key aspects of the PLC and how do they relate to outcomes and products a Length There is no set time that it takes a product to move through the life cycle depends on innovation technology and the availability of mass communication b Shape Several different shapes depends on marketing strategies i High Learning ii Low Learning iii Fashion Product iv Fad Product c Class and Form i Class Refers to the entire product category or industry ii Form Pertains to variations within the product class d Consumer PLC The life cycle of a product depends on sales to consumers diffusion of innovation 3 What does one do to manage the PLC a Product Manager Manages the marketing efforts for a close knit family of products or brands i Responsible for managing existing products through the stages of the PLC ii Develop and execute a marketing program for the product line described in a marketing plan b Modify Product Altering one or more of a products characteristics quality performance or appearance to increase product value to customers and increase sales i Want to give