Chapter 7 Flashcards
Types of product development
New to-the-company
Improvement in existing
Extension of existing
New-to-the- market
Questions to ask when deciding what products to offer
What does my customer want to buy?
Utility
Products provide customers with 4 types of utility benefit
Types of Utility benefit
Time
Place
Ownership
Form
New-to-the-company product
Goat or service new to the company but has been sold by a competitor
Improvement in existing product
Enhancement of a product already on the market
Extension of existing product
New product developer as a variation of an already existing product
New-to-the-market product
Goat or service that has not been available to consumers or manufacturers in the past
Ext of time utility
Good or service that fits the situation at a perfect time
Ex) of place Utility
Good or service available in a convenient location
Ex) of ownership Utility
Transferring a products owner
Ext form Utility
Changing the composition of a product
Ask this to know if a product has utility
1 who would my customs be?
2 why will customers buy the product from me?
3 how will customers benefit from my product?
Segments of industry
Overall industry
Market
Market segment
Niche
Overall industry
Group of related businesses that do similar things and compete with each other
Market
Potential buyers who share a common need that can be met by a certain product
Market segment
Potential buyers w/ common characteristics that influence their buying decisions
Niche
Narrowly defined group of potential customers w/ a specific set of needs
When to develop and market a new product questions
1 who are my primary customers
2 will I sell to individuals, businesses or both?
3 if I sell to other businesses, who will be the actual end users?
Breakeven analysis
Method of determining the level of sales at which the company will break even
Fixed costs
Costs that don’t change when the amount of goods sold changes
Variable costs
Costs that vary, in total, as the quantity of goods self changes but stay constant on a per-unit basis
Why is product development so risky?
Trade-offs
Time pressure
Economics
Product development process
- Evaluate opportunities and select the best product idea
- Get feedback to refine the product concept
- Make sure the product performs and appeals to consumers
- Design w/ manufacturing in mind
- Built and test prototypes
- Ramp up production and run market tests
7, launch the product
