Module 3 Exam 3 Study Guide Lecture 1 Product Concepts Product A product is a good service or idea or a combination of two or more of these Products Defined Goods a tangible physical entity Services an intangible result of application of human and mechanical efforts to people or objects hybrids Ideas concept philosophy image or issue Product Types Consumer Products Purchased to satisfy personal and family needs and are classified according to how buyers generally behave wen purchasing them Convenience products Shopping Products Specialty Products Unsought Products Business Products Purchased to use for operations to resell or to use in manufacture of other products Product Hierarchy Core products are the physical or intangible service that the customer receives Branded products are the core products plus the characteristics that allow the consumer to differentiate it from similar products Augmented products have characteristics that enhance value beyond that of the core and branded product Strategic Product Management Product mix is all of the products a company sells Product lines consists of the closely related products marketed by an organization like oreos double stuffed peanut butter reduced fat Depth The number of items in a product line diff types of diet coke Breadth The number of different lines that a company or SBU markets diff types of soda rather than diff types of diet coke Extensions up down PLC Products are introduced to the market then they grow or don t Then they reach maturity where they flatten out then they go into decline phase Extending the PLC o Selling to new segments Harley Davidson reached out to women o Stimulated more frequent use tooth product companies created togo brushes o Encourage more per use per occasion Mcdonalds supersize o Promoting more varied use dryer sheets for nat repellent Modifications o Reposition Arm and Hammer started to focus more on fridge deodorizer than its uses for baking o Improvements Modifications to product formulas or service processes like how Wendy s changed their fries to natural cut New Product Development is Risky Less risky alternatives include line extensions and product modifications Line extensions product developed is closely related to one or more successful products in existing product line but specifically designed to meet a somewhat different need o Down Market Extensions Mercedes made a B class car o Up market Extensions Hershey s made extra dark line with premium ingredients Brand extensions product developed is not closely but should still be somewhat related to one or more products in existing product line Product modifications product modification means changing one or more of the product s characteristics different from line extensions because the original product is removed from product line o Changes to one or more characteristics of a product The old version usually doesn t stay in the line like the corvette Cost Reduction Quality Modification o Products at a lower price o Products at Same Price at Lower Manufacturing Costs Functional Modifications o Generally modifications on packaging like crystal light s individual togo packets or cambell s soup at hand product Lecture 2 Developing New Products a ton of videos that he said is testable Videos on New Products Watercar https www youtube com watch v 2150iFXF5Vc Scuba https www youtube com watch v xsGfje jNcs iCycle http www macorg net future apple products 2013 Edison Awards 2012 http edisonawards com BestNewProduct 2012 php The Future of Glass https www youtube com watch v 6Cf7IL eZ38 Bell Labs http www cbsnews com news the spirit of invention continues at bell labs Wendy s http www cbsnews com news columbus ohio test market of the usa New Products 80 of new products fail Two Goals for NPD The Business side of NPD 5 Steps to Develop New Products 1 Understanding New Product Development from the Firm s Perspective 2 Understanding New Product Adoption from the Customer s Perspective 1 Idea Generation whats the idea of the project Neurofocus rap video https www youtube com watch v qZKHpTet4Ds Product Innovation Ted Talk a robot bird http www ted com talks a robot that flies like a bird 2 Idea Screening screen ideas to filter bad ones Doggie Air Conditioner https www youtube com watch v HT n1C7QwGA p 33606164BCC3B00F playnext 1 index 3 3 Concept Analysis analyze in a specific way Who is the target market How much will it cost to produce How much will consumer pay for it Focus Group video https www youtube com watch v p8A4yqN4 9A 4 Beta and Market Testing prototype step before launch Test market cities need diverse population Product Adoption Process consumer 1 Awareness Buyer becomes aware of the product Buyer seeks information and is receptive to learning about the product 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 2 Interest 3 Evaluation 4 Trial needs 5 Adoption Buyer purchases the product and is expected to use it again whenever the need for this general type of product arises 5 different types of product adopters Innovators o First to adopt new product Early Adopters o Choose new products carefully help spread word of mouth o Adopt just prior to average person o Skeptics who adopt new products when they feel it is necessary Early Majority Late Majority Laggards o Last to adopt a new product Lecture 3 Managing Service Products Services What are They A deed process or performance Some Overlap Service Exists in ALL Physical Goods too o Customer Service in support of manufactured goods Dell reps Ordering o Distribution of Physical Goods even bulk goods have service o Return of Defective Goods Why Are They Important Approximately 82 of Total U S Employment 55 in 1929 Roughly 80 of GDP 85 Billion Trade Surplus o McDonald s AMEX FedEx o Trade deficit is Huge see the exact figure New U S Job Growth o 91 of new jobs from 1992 to 2005 All Factors Contributing to Growth Aging population Baby Boomers o Longer life expectancies o Implications Movement to information age o Implications Increased leisure time High per capita income o discretionary income Changing social and cultural values Characteristics of Services The Big Four Intangibility Lack of tangible assets which can be seen touched or smelled prior to purchase o They stress tangible cues o Price is related to quality more expensive better quality o Customer referrals are important Perishability
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