Exam 3 Review Product not just physical good we have services her teaching us concert ideas or philosophies madd mothers against drunk driving also supporting services like warranties and etc Consumer products products that go to people like you and I final consumer Convenience quick purchases not a lot of thought Soda coffee Shopping product little more time such as clothing Specialty product subset of shopping product ex Plasma TV Unsought products you don t look for them but they find you ex utilities and insurance Business products business to business sell to your supplier down stream or buy upstream manufacturer might buy resource from cocoa farmer Product hierarchy Core product basic need that the product fulfills ex Car Branded Product core product plus differentiation that separates the core products ex Toyota Augmented Product the little additional benefits ex Delivery insurance etc Product Mix every product the company sells ex Coke has one product line P G has a lot Product Line closely related products marketed by organizations ex Oreo tweak it a little Oreos the same but have a little difference Product Line Depth the number of items in a product line ex Diet coke 9 nine different diet cokes Product Line Breadth number of different product lines that a company or SBU markets Product Life Cycle Introductary Stage very risky very risky Growth Stage increasing rate of sales start to see competitiors Maturity Stage saturated markets ales increasing at decreasing rate new product every year ex Iphone 5 5s 6 Decline Stage sales dropping off long run drop in sales unsold items ex RC Cola Extending The PLC Product Line Cycle Selling to new segments football sold to women now Stimulate more use toothbrush on the go stimulate more uses Encourage more use for occasion supersized at mcdonalds buy in bulk at cosco Reposition and Improvements Repositioning ex Arm hammer reached out to people with refrigerator and freezer deodorizer Improvements improve product Wendy s using natural cut for fries taco bell using natural ingredients extension cored under rug Brand Extension product developed is not closely related to one or more products in existing line should be somewhat similar ex Starbucks Coffee ice cream Reeses creamy peanut butter New Product Development is RISKY Product modification modify product and old product is no longer sold ex Cars Come out with new model and company stops selling those cars May be resold but not from company themselves Quality Modification change the ingredients or way the product is made or make it cheaper ex Hamburger helper taking out ingredients of spices which allowed them to make more money of profit margin Functional Modification changes that impact versatility effectiveness convenience or safety of the product ex Ketchup packets changing to make it easier to use crystal light packets so you can put in water bottle Campell s soup to go New Product 80 of new products fail sometimes so fast that we do not even realize 5 steps of New Product Development 1 Idea Generation research and development team or company such as neurofocus that looks at brain waves while asked what they want in a product ex People wanted the orange residue on fingers from eating Cheetos Crowd sourcing consumers pick flavors and make them up to see what people may like lays chips and Mt dew Idea Screening get feedback from people where study groups would occur 2 3 Concept Analysis who is the target how much will it cost to produce how much will consumers pay for it 4 Test Marketing send it to a market that has similar demographics as America as a whole ex Jacksonville 15 best for similar demographics 5 Product Launch launching product ex Some products can make it through all steps then fail in this step ex Sun chips with loud bag Product Adoption Process 1 Awareness buyer becomes aware 2 3 Evaluation buyer considers products benefit and decides whether to buy it 4 Trial Buyer examines tests or tries the product to determine if it meets his or Interest buyer seeks information and is receptive to learning about the product her needs 5 Adoption Buyer purchases the product and is expected to use it again whenever the need for this general type of product arises New Product Adoption Innovators first to adopt new product Early adopters choose new products carefully help spread word of mouth Early majority adopt just prior to average person Late majority Skeptics who adopt new products when they feel it is necessary Laggards Last to adopt a new product ex forced to get Smartphone due to work Services services exist in all physical goods too ex Customer service in support of manufactured good ordering Services make up 82 off total U S employment Roughly 80 of GDP More developed countries usually have better services Services extremely important because 40 of brand switching is due to POOR SERVICE Intangibility lack of intangible assets which can be seen touched or smelled prior to purchase Perishability inability of a service to be inventoried or stored ex Flights cant refill empty seat once they are gone Inseparability simultaneous production and consumption of good ex Haircut you re interacting with the producer as you are consuming the haircut as the hairdresser is cutting it Heterogeneity variability unwanted or random levels of service quality consumers receive when they patronize a service form ex Hairdresser may be having a bad day and mess up Tangibility Spectrum Tangible dominant salt Intangible dominant teaching Middle even ground on spectrum fast food McDonalds Perishability need to manage supply and demand Inseparability employees and environment are key to keep customers happy and as the main factor Heterogeneity customize a physical good standardize a service Search Qualities product service attributes that can be evaluated before purchase ex Test drive Experience Qualities product service attributes that can be evaluated only after purchase ex Movie haircut Credence qualities product service attributes cannot be evaluated even after purchase ex Healthcare funeral services Service Marketing Mix Product Core vs Peripheral Place typically direct Promotion key sell expertise to reduce risk manage expectations Price denotes quality changes by the service expensive usually expected good service People functional quality ex Workers appearance on cruises Process the operational flow ex Delta vs southwest when obtaining seats on a plane Expectations Product failure
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