• Chapter 10 - Developing New Products and Services
• Key terms (page 239)
• Product decisions
  • product item = a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value = SKU = stock keeping unit
  • product line = a group of products that are closely related because they satisfy a class of needs, are used together, and sold to the same customer group, are distributed through the same outlets, or fall within a given price range.
  • product mix = the number of product lines offered by a company
• Product classifications
  • by User
    • Consumer goods = products purchased by the ultimate consumer
      • convenience products = items that the consumer purchases frequently and with a minimum  of shopping effort
      • shopping products = items for which the consumer compares several alternatives on criteria such as price, quality, or style.
      • specialty products = items that a consumer makes a special effort to search out and buy
      • unsought products = items that the consumer either does not know about or knows about but does not initially want
    • Business goods = products that assist directly or indirectly in providing products for resale = B2B goods = industrial goods = organizational goods
      • production products = items used in the manufacturing process that become part of the final product
      • support products = items used to assist in producing other goods and services
        • installations, accessory equipment, supplies, services
  • by Degree of tangibility
    • nondurable goods = items consumed in one or a few uses
    • durable goods =  items that last over an extended number of uses
    • services = activities, deeds, or other basic tangibles
• New product (= What is a new product?)
  • degree of degree of distinction from existing products
  • time base (defined by government)
  • company's perspective
  • effect on a consumer's usage pattern (= degree of learning required by a consumer in order to use the product properly)
    1. continuous innovation = the least change in the product (= no new behaviours must be learned by the consumer)
    2. dynamically continuous innovation (= only minor changes in behaviour are required to use these new products)
    3. discontinuous innovation = the greatest change in the product (= consumers must learn entirely new behaviours or consumption patterns in order to use the product)
• New Product Process
  1. New-Product Strategy Development
  2. Idea Generation
  3. Screening and Evaluation
  4. Business Analysis
  5. Development
  6. Market Testing
  7. Commercialization
• Failure
  • insignificant point of difference
    • points of difference = those characteristics of a product that make it superior to competitive substitutes.
  • incomplete market and product definition before product development begins
    • protocol = a statement that, before product development begins, identifies (1) a well-defined target market; (2) specific customers' needs, wants and preferences; and (3) what the product will be and do.
  • too little market attractiveness
    • high growth, real buyer need
  • poor execution of the marketing mix
  • poor product quality on critical factors
  • bad timing
    • too early, too late, at a time when consumer tastes are shifting dramatically
  • no economic access to buyers

Resources

• Chapter 10 - Kerin (Canada)
  • Chapter 10 - Kerin (USA)
  • Chapter 10 - Berkowitz
• Student Centre - Kerin (Canada)
  • Student Centre - Kerin (USA)
  • Student Centre - Berkowitz
• Marketing: The CORE - Kerin  (McGraw-Hill Ryerson ) (Canada)
  • Marketing: The Core with PowerWeb - Kerin  (McGraw-Hill Ryerson )
  • Marketing - Fifth Canadian Edition - Berkowitz  (McGraw-Hill Ryerson)