Chapter 9 - Creating The Product Flashcards
Good
Tangible product we can see, touch, smell, hear, or taste.
Product
Everything a customer receives in an exchange.
- Core
- Actual
- Augmented layers
Core product
Consists of all the benefits the product will provide for consumers or business customers.
- About the benefits (customized - bells and whistles)
The Actual Product
The physical good or the delivered service that supplies the desired benefit.
- Washing machine = the large square apparatus.
- Consists of unique features of the product
The 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.
- High involvement products
Nondurable Goods
Consumer products that provide benefits for a short time because they are consumed (such as food) or are no longer useful (newspapers).
- Low involvement products.
- Based on past experience.
Convenience Product
A consumer good or service that is usually low priced, widely available, and purchased frequently with a minimum of comparison or effort.
Staples
- Convenience product
- Basic or necessary items that are available almost everywhere.
Impulse Product
- Convenience Product
- Something people often buy on the spur of the moment.
Emergency Product
- Convenience Product
- Purchased when people are in dire need.
- Price and quality are irrelevant
Shopping Product
A good or service for which consumers will spend time and effort gathering information on price, product attributes, and product quality.
Attribute-Based Shopping Products
- Shopping Product
- Party dress or designer jeans
- Time and energy used to find best.
Price-Based Shopping Products
- Products are considered shopping products because of differences in price.
Specialty Product
Good or service that has unique characteristics, is important to the buyer, and for which the buyer will devote significant effort to acquire.
- Loyal to specific brands and know a lot of info.
- Much consumer effort and extended problem solving.
Unsought Products
Good or service for which a consumer has little awareness or interest until the product or a need for the product is brought to his or her attention.
Equipment
Expensive goods an organization uses in its daily operations that last for a long time.
- Capital equipment (buildings and robots)
- Accessory equipment (shorter life span, lighter)
MRO Products (Maintenance, Repair, and Operating)
Goods that a business customer consumes in a relatively short time.
- Lightbulbs, small tools, paper and oil.
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.
Specialized Services
Services purchased from outside suppliers that are essential to the operation of an organization but are not part of the production of a product.
Component Parts
Manufactured goods or subassemblies of finished items that organizations need to complete their own products.
Innovation
A product that consumers perceive to be new and different from existing products.
- FTC (new = only six months, product must be changed significantly or really new)
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 a new system with greater benefits than its parts.
Discontinuous Innovations
A totally new product that creates major changes in the way we live.
- Consumers engage in a lot of learning
Phases In Development
- Idea Generation
- Product Concept Development and Screening
- Marketing Strategy Development
- Business Analysis
- Technical Development
- Market Testing
- Commercialization
Idea Generation
- 1st step of product development
- Marketers brainstorm for products that provide customer benefits and are compatible with the company mission.
Product Concept Development and Screening
- 2nd step of product development
- Marketers test product ideas for technical (is it feasible) and commercial (will anyone buy) success.
Business Analysis
Step in the product development process in which marketers assess a product’s commercial viability.
Technical Development
Step in the product development process in which a new product is refined and perfected by company engineers and the like.
Prototypes
Test versions of a proposed product.
Test Marketing
Testing the complete marketing plan in a small geographic area that is similar to the larger market the firm hopes to enter.
Commercialization
Final step in the product development process in which a new product is launched into the market.
Product Adoption
The process by which a consumer or business customer begins to buy and use a new good, service, or an idea.
Diffusion
The process by which the use of a product spreads throughout a population.
Stages of Customer Adoption
- Awareness (massive advertising)
- Interest (sees it satisfying needs)
- Evaluation (weighs cost and benefits)
- Trial (experience and use product)
- Adoption (chooses the product)
- Confirmation (weighs expected vs. actual)
Innovators
The first segment (2.5%) or a population to adopt a new product.
- Adventurous and take risks
- Introduction Phase
Early Adopters
Adopt an innovation early in the diffusion process but after the innovators (13.5%)
- Growth stage
Early Majority
Those whose adoption of a new product signals a general acceptance of the innovation (34%)
- Maturity phase
Late Majority
Willing to try new products when there is little or no risk associated, when the purchase becomes an economic necessity, or when there is social pressure to purchase (34%).
- Maturity Phase
Laggards
The last consumers to adopt an innovation (16%)
- Decline Phase
5 Characteristics of innovations that affect the rate of adoption.
- Relative Advantage
- Compatibility
- Complexity
- Trialability
- Observability
Relative Advantage
The degree to which a consumer perceives that a new product provides superior benefits.
Compatibility
The extent to which a new product is consistent with existing cultural values, customs, and practices.
Complexity
The degree to which consumers find a new product or its use difficult to understand.
Trialability
The ease of sampling a new product and its benefits.
Observability
How visible a new product and its benefits are to others who might adopt it.
