Chap 10 develop new products and service Flashcards
Product Line
a group of products that are closely related as they satisfy a class of needs, are used together, are 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.
two ways to classify the products
i. type of users
ii. degree of tangibility
two types of users
customer goods and business goods
degree of tangibility in terms of product classification
i. durable goods
ii. services
4 types of customer goods
i,. convenience goods
ii. shopping goods
iii. specialty goods
vi. unsought goods
def. convenience goods
the goods purchased frequently with minimum shopping effort.
def. shopping goods
Consumers compare several alternatives on criteria such proce, quality or style.
def. specialty goods
Specialty goods are items for which the consumer makes a special effort to obtain.
def. unsought goods
those products which the consumer either does not know about; or knows about them and does not initially want to have them
what is the difference between production goods and support goods?
Production Goods: Items used in the manufacturing process that become a part of the final product.
Support Good:
Items purchased and used to assist in the production of the final product.
three uses of support goods
Installations (e.g., Buildings, Fixed equipments; Capital intensive; Price by Competitive Bidding
Accessory Equipment (e.g., Tools and Office Equipment; purchased from distributors)
Supplies (e.g., Frequently bought with minimum efforts)
Services to assist buyers.
Explain the difference between product mix and product line.
A product line is a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range. Each product line has its own marketing strategy, whereas a product mix is a number of product lines offered by a company.
To which type of good (business or consumer) does the term derived demand generally apply?
Derived demand generally applies to an organizational or business good.
how to define the newness of a new product? 4 aspects
- Newness Compared with Existing Products
- Newness in Legal Terms – 12 months
- Newness from the Company’s Perspective
- Newness from the Consumer’s Perspective (must involving substantive learning by the consumer)
the three levels of newness for a company
in three levels: Brand Extension (Min Risk); significant innovation; revolutionary product.
the three levels of newness for a customer:
- Continuous innovation: No new behavious must be learned
- Dynamically continuous innovation: Minor behavious are learned
- Discontinuous innovation: Entirely new behavious must be learned
what is the market emphasis on continuous innovation?
generate awareness among consumers and obtain widespread distribution
what is the market emphasis on dynamically continuous innovation?
advertising benefits to consumers , highlight point of differentiation and consumer advantages
what is the market emphasis on dynamically discontinuous innovation?
educate consumers through product trial and personal selling
what are 7 categories of new services
- Major service innovations
- Major process innovations
- Service-line extensions
- Process-line extensions
- Supplementary-service innovations
- Basic service improvements
- Style changes
ex. . Major service innovations
radically new services & processes
ex. Major process innovations
Major process change to deliver service in a new way (online services)
ex. Service-line extensions
: Service extensions by banks in offering insurance to their customers
