Developing New Products o Goals of product development Understanding New Product Development from the Firm s Perspective and New Product Adoption from the Customer s Perspective The Swiffer Example o Five steps to developing a new product o Idea Generation Neurofocus found Cheetos lovers like orange mess on hands Screening Doggie air conditioner ex Concept analysis Who is target market how much will it cost to produce How much will consumer pay for it focus group Test Markets Then test in areas Jacksonville 15 Albany Schenectady Troy NY 1 Launch Qwikster worst ever o Product adoption Awareness Interest Buyer becomes aware of the product Buyer seeks information and is receptive to learning about the product Evaluation Buyer considers product s benefits and decides whether to try it Buyer examines tests or tries the product to determine if it meets his or her needs Trial Adoption Buyer purchases product and is expected to use it again whenever need for type of product arises o Categories of Adopters Innovators First to adopt new product Early adopters mouth Early Majority Choose new products carefully help spread word of Adopt just prior to average person Skeptics adopt new products when they feel it is Late Majority necessary Laggards Last to adopt new product Managing Existing Products o What is a product A good service or idea received in an exchange Includes supporting services installations guarantees warranties o IPod concert MADD o Different product types Goods Services a tangible physical entity mechanical efforts to people or objects hybrids Ideas concept philosophy image or issue an intangible result of application of human and o Core product versus a brand Core product physical or intangible service that the customer receives Branded products that allow consumer to differentiate it from similar products the core products plus the characteristics o Product life cycle goal is to maintain products and drop unprofitable products Introduction stage initial stage of product s life cycle first appearance in marketplace when sales start at zero and profits are negative High fail rates little competition negative profits Growth stage the product life cycle stage when sales rise rapidly profits reach peak and then start to decline enter competitors prices normally fall Maturity stage stage of life cycle when sales curve peaks and starts to decline and profits continue to fall Lengthened product lines prices and profits fall niche market emerge Decline stage stage when sales fall rapidly o Alternative life cycles High technology products fads and styles or fashions o Product line depth versus product breadth consists of closely related products marketed Product line Product Breadth by an organization all the Excedrin pain meds markets All different drinks Coke makes different types of Diet Cokes Product Depth number of different lines a company number of items in a product line many o Brand extensions BBQ restaurant selling bottled versions of its sauce versus product line extensions services like all different Marriots and needs each meets physical like different beers Down versus up market extensions o o Product modifications Changes to one or more characteristics of a product different looks of the Corvette Repositioning Arm Hammer products Improvements modifications to product formula or service process new Wendy s homestyle fries The Power of Branding and Packaging o Best global brands Coke IBM Microsoft GE Nokia McDonalds o What is a brand Name term design symbol or other feature that identifies marketer s product as distinct from those of other markets Coke Microsoft IBM Mercedes o Brandmark vs trademark part of a brand that is not made up of words Brandmark such as symbol or design FS FSU logo registered trademark R Trademark legal designation of exclusive use of brand TM o Levels of brand loyalty Recognition buyer is aware that a brand exists and considers it as an alternative if preferred brand unavailable Preference Insistence substitute buyer prefers product over competitive offerings product is strongly preferred buyer will accept no o Brand equity and equity as benefit vs burden Brand equity the marketing and financial value associated with a brand s strength in a market Sometimes measured as difference in price between branded and unbranded greater negative disconfirmation example of Nike and now stand alone swoosh Disconfirmation is raised expectations lead to As benefit Burden Brands change perceptions alter views of reality and add value where doesn t really exist o Manufacturer vs store brands All products are about same accept for beverages o Branding strategies Brand Extension Product line Extension same product category new flavors colors ingredients package sizes to go pens market success Yamaha piano fail Hooters drink when 2 brands are presented together using an established brand in unrelated different product category Tide and Tide Brand Stretching Co Branding Sometimes from different companies often same though Lunchables Hershey brownies Genercized Brands name of product is its name White out Band Aid o Brand counterfeits o Packaging Estimated losses 250 350 billions Most targets are mass market products or products with high profitability Abercrombie and Fitch Rolex Development of a container and graphic design for a product Gets attention and sends signals about product attributes and quality o Tropicana redesign sales drop 20 and change back o Heinz new packets o Attention grabbers Addidas shoes in container o Green washing and unique tiffany box o Utility Stride gum chips ahoy cookies Managing Service Products o Services vs Physical goods Service a deed process or performance Customer service in support of manufactured goods Dell reps Distribution of Physical goods Even bulk goods have service o Examples of service industries Health Care Hospital medical practice dentistry eye care Professional Services Accounting legal architectural Financial Services Banking investment advising insurance Hospitality Travel Other Restaurant hotel motel bed breakfast ski resort Airlines travel agencies theme park rental cars Hair styling pest control plumbing lawn maintenance o Why good service o Where are services Poor service 1 reason customers switch 91 in Hong Kong 79 USA 77 France China 40 last o Factors contributing to growth Aging population Baby Boomers Longer life expectancies Movement to information age Changing social and cultural values Increased
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