Chapter 8 Create the Product Product a tangible good service idea or some combination of these that satisfies consumer or business customer needs through the exchange process it is a bundle of attributes including features functions benefits and uses good A tangible product that we can see touch smell hear or taste attributes Include features functions benefits and uses of a product Marketers view products as a bundle of attributes that includes the packaging brand name benefits and supporting features in addition to a physical good Layers of the Product Process core product All the benefits the product will provide for consumers or business customers actual product The physical good or the delivered service that supplies the desired benefit augmented product The actual product plus other supporting features such as a warranty credit delivery installation and repair service after the sale durable goods Consumer products that provide benefits over a long period of time such as cars furniture and appliances nondurable goods Consumer products that provide benefits for a short time because they are consumed such as food or are no longer useful such as newspapers Classification of Products convenience product A consumer good or service that is usually low priced widely available and purchased frequently with a minimum of comparison and effort Staple products Basic or necessary items that are available almost everywhere impulse products A product people often buy on the sput of the moment emergency products Products we purchase when we re in dire need shopping products Goods or services for which consumers spend considerable time and effort gathering information and comparing alternatives before making a purchase intelligent agents Computer programs that find sites selling a particular product specialty products Goods or services that has unique characteristics and is important to the buyer and for which she will devote significant effort to acquire unsought products Goods or services for which a consumer has little awareness or interest until the product or a need for the product is brought to her attention B2B Products equipment Expensive goods that an organization uses in its daily operations that last for a long time maintenance repair and operating MRO products Goods that a business customer consumes in a relatively short time raw materials Products of the fishing lumber agricultural and mining industries that organizational customers purchase to use in their finished products processed materials Products created when firms transform raw materials from their original state component parts Manufactured goods or subassemblies of finished items that organizations need to complete their own products 1 Chapter 8 Create the Product The Process of Innovation innovation A product that consumers perceive to be new and different from existing products continuous innovation A modification of an existing product that sets one brand apart from its competitors knockoff A new product that copies with slight modification the design of an original product dynamically continuous innovation A change in an existing product that requires a moderate amount of learning or behavior change Convergence the coming together of two or more technologies to create new systems that provide greater benefit than the original technologies alone discontinuous innovation A totally new product that creates major changes in the way we live Convergence The coming together of two or more technologies to create a new system with greater benefits than its separate parts How Do We Measure Innovation Firm Strategy How aware are organization members of a firm s goals for innovation How committed is the firm and its leadership to those goals How actively does the firm support innovation among its organization members Are there rewards and other incentives in place to innovate Is innovation part of the performance evaluation process To what degree do organization members perceive that resources are available for innovation money and otherwise Firm Culture Does the organization have an appetite for learning and trying new things Do organization members have the freedom and security to try things fail and then go forward to try different things Outcomes of Innovation Does the organization have an appetite for learning and trying new things Do organization members have the freedom and security to try things fail and then go forward to try different things Number of innovations launched in the past three years Percentage of revenue attributable to launches of innovations during the past three years New product development NPD The phases by which firms develop new products including idea generation product concept development and screening marketing strategy development business analysis technical development test marketing and commercialization Phase 1 idea generation The first step of product development in which marketers brainstorm for products that provide customer benefits and are compatible with the company mission Phase 2 product concept development and screening The second step of product development in which marketers test product ideas for technical and commercial success Phase 3 Marketing Strategy Development Marketers must identify the target market estimate its size determine how they can effectively position the product to address the target market s need planning for pricing distribution and promotion expenditures both for the introduction of the new product for the long run Phase 4 business analysis The step in the product development process in which marketers assess a product s commercial viability Phase 5 technical development The step in the product development process in which company engineers refine and perfect a new product Test versions of a proposed product A legal mechanism to prevent competitors from producing or selling an Prototypes patent invention aimed at reducing or eliminating competition in a market for a period of time Phase 6 test marketing Testing the complete marketing plan in a small geographic area that is similar to the larger market the firm hopes to enter Phase 7 commercialization The final step in the product development process in which a 2 new product is launched into the market Adoption and Diffusion of Chapter 8 Create the Product New Products product adoption The process by which a consumer or business customer begins to buy and use a new good service or idea diffusion The