Product and New Product Design Flashcards
What are prototypical products? What are some non-prototypical products?
-Prototypical products are material or tangible like shoes, cars, technology devices, jewelry, or home appliances.
-Non-prototypical products include services and experiences. Services may be phone services or dry cleaning. Experiences may be restaurants, cinemas, and theme parks.
What do marketers understand about experiences?
-Marketers understand that experiences are products, and experiences are the way marketers create value for customers.
-Customers are buying more than just products and services.
-They are buying the end benefit-what the product or service will do for them and the utility or enjoyment they will derive from it.
-With a PS4, they aren’t selling plastic, they are selling a gaming console and the hours of enjoyment they’d get.
-With a mattress, they aren’t just selling foam and feathers, they are selling a good night’s sleep.
What is a product? What do products include.
-A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.
-A product includes: goods, services, experiences, people, ideas.
-On the people side of things, it even includes politicians who are trying to get people to vote for them.
-Celebrities who want to grow their social media following are also products.
-On the ideas side of things, messages like reduce, reuse, and recycle are also products.
What are the two broad classifications for products?
1) B2B-Business to Business Products
-Purchased by individuals and organizations for further processing for use in conducting a business.
-E.g., raw materials; office equipment; consulting, legal, or advertising services.
2) B2C-Business to Consumer Products
-Bought by final consumers for personal consumption.
What are the four categories of consumer products?
1) Convenience
2) Shopping
3) Specialty
4) Unsought
What are convenience consumer products?
-Convenience consumer products that consumers buy frequently, immediately, and with minimal effort.
-The products have widespread distribution, low price, and have mass promotion.
-Examples include toothpaste, soft drinks, and dishwashing detergent.
What are shopping consumer products?
-Shopping consumer goods are compared by consumers carefully on attributes like quality, price, and style before buying.
-Buyers take time to make informed decisions.
-Available in fewer places; consumers are willing to search.
-Salespeople play a bigger role in guiding decisions.
-Reflects the longer decision-making process and perceived value.
-Examples include appliances, electronics, furniture, clothing, and used cars.
What are specialty consumer products?
-Specialty products are a category of consumer goods that have unique characteristics or brand identification for which a significant group of buyers is willing to put a lot of money and effort to get.
-Buyers will insist on getting the product they want, and are not willing to substitute products.
-Consumers are not price sensitive and prioritize features and functionality over cost.
-Only available in specific outlets, often luxury or high-end retailers.
-Enhances perceived scarcity and prestige.
What are unsought customer products?
-These are products that consumers do not think about frequently or may not consider purchasing until a specific need arises, often unexpectedly. In some cases, consumers may actively avoid these products.
-Unlike convenience or specialty products, there’s no urgent demand until a specific event triggers it (e.g., car breakdown → need for towing service).
-Marketers rely heavily on personal selling, direct marketing, or persuasive advertising to spark interest or generate leads.
-Education is often key to making the value clear to the consumer.
-There’s no burning need for the product
What are the 5 product and service attributes?
1) Quality
2) Style and Design
3) Packaging
4) Labelling
5) Support Services
What characterizes the product and service attribute of quality?
-Of course quality implies “freedom from defects” but you should think of quality as far more than that.
-Quality measures a product or service’s ability to create customer value and satisfy a customer’s need.
-It doesn’t necessarily mean that it has to be “the best.” A customer may need a minivan that allows them to go to the grocery store, and take their kids to soccer practice, their minivan doesn’t need a sports care engine.
What are the two key elements of quality?
1) Performance Quality=product’s ability to perform its functions
2) Conformance Quality=freedom from defects and consistency in performing targeted performance level
-People will have higher standards for conformance quality from a sportcar than a minivan. This has to do with the concept of how expectations of consumer determines satisfaction.
What are the two key elements of style and design?
1) Product style
-The aesthetics of the product include appearance and feel
-E.g. colours, patterns, fabric softness
2) Product design
-Contributes to a product’s usefulness as well as its looks
-Requires observing and understanding consumers’ needs
-Focuses on end-user experience
-E.g. colanders have very diferent designs despite being a very standardized product. This does change the user experience.
What are the key elements of packaging?
-Designing and producing the container or wrapper.
-Packaging should be:
-Promotional(e.g. Tiffany box or Hermes bag), descriptive(it should say what makes it unique), and persuasive(it’s convincing and says that it’s value size).
-Tamper-proof. E.g. you may want to pop the cork of the wine bottle.
-Assist at-home storage and consumption. E.g. Coco Cola vs La Croix placement of cans.
-Sustainable. Uses minimal wrapping and ideally it’s recyclable.
-Frustration-Free (avoid “wrap rage”). It shouldn’t be challenging to open.
What key elements are associated with labelling?
-Attached tags or packaging graphics that identify, describe and promote the product.
-E.g. Starbucks logo dropping the mermaid and then the Starbucks logo, Dr Pepper can design, or Campbell’s tomato soup evolution, the new Gap logo enfuriated customers.
What are the key elements associated with support services?
-Support services can help toaugment the product use or experience
-For instance, in the Apple stores, there are stools where you can sit down and watch tutorials on how to use the product.
-Support services can also include the customer service people whom we call on the phone.
What are the 5 steps to the service profit chain? Why is the service profit chain relevant?
Two people may go to the same restaurant, and because they have different servers, their experience could be completely different altogether.
1) Internal service quality (selection, training, work environment
2) Satisfied and productive service employees
-e.g. Zappos giving great employee training.
-CEO offers unhappy employees $2000 to quit.
3) Greater service value
-When employees are engaged and well-supported, they deliver higher-quality services or products, leading to better customer experiences.
-Example: Ritz-Carlton empowers its employees to make decisions that enhance guest experiences, leading to a premium perception of service quality.
4) Satisfied and loyal consumers
-When customers consistently receive great service, they are more likely to return and recommend the brand to others.
5) Healthy service profits and growth
-Customer loyalty and positive experiences drive increased revenue, higher profitability, and business expansion.
What are the four key marketing strategies for service firms?
1) Profit Chain
2) Managing differentiation
3) Managing quality
4) Managing Productivity
What does managing service differentiation involve?
-Differentiated offerings -e.g. innovative or superior features. It can also be interactive retail experiences like how Apple offers seminars for new purchasers.
-Differentiated delivery -e.g., more reliable customer service agents, online ordering, fast delivery, personalized service
-Differentiated images-brand image, logos, mascots
How do we manage service quality?
-The key component to managing service quality is to differentiate oneself from ones competitors via:
-Ordering ease
-Delivery speed
-Free or easy installation
-Training the customer on how to use the product.
-Consulting the customer on which product is best for them
-Free or easy maintenance and repair
-Service quality is more difficult to define and judge than (tangible) product quality.
-We can judge it through metrics. For instance in hospitality, we’d look at the percentage of on-time arrivals, and customer wait times. We would also give out customer feedback surveys.
How do we manage service quality?
-The key component to managing service quality is to differentiate oneself from ones competitors via:
-Ordering ease
-Delivery speed
-Free or easy installation
-Training the customer on how to use the product.
-Consulting the customer on which product is best for them
-Free or easy maintenance and repair
-Service quality is more difficult to define and judge than (tangible) product quality.
-We can judge it through metrics. For instance in hospitality, we’d look at the percentage of on-time arrivals, and customer wait times. We would also give out customer feedback surveys.
What are the five stages of the product life cycle? How does this relate to sales?
1) Product development-No sales during this point. Profits continue to decline.
2) Introduction-Sales slowly tick up. Profits decline to their lowest, but midway through the introduction, profits begin to rise, and at the very end of the introduction, sales are positive.
3) Growth-Sales grow at the most repid rate. Profits continue to rise.
4) Maturity-The most sales, but growth starts to level off, and a slight sales decline occurs at the middle. Profits rise a bit in the beginning of maturity, but begin to drop a lot.
5) Decline-Sales dip a fair amount, and profits go to zero.
What is the product life cycle used for?
-The product life cycle is used to chart the stage of a product from it’s inception(when the product is just being developed) to it’s decline(when the product is exiting the market).
-You can do this in a number of ways.
-One way may be to assess a product class/category. e.g. try to determine where electrical vehicles are in their lifecycle. This product wasn’t around several decades ago, but it is now.
-Another way is to apply it to a specific product form or type. For instance, film cameras as opposed to digital cameras. Or it could be music records as opposed to digital music like Spotify.
-It’s worth noting that not all products will go through all five stages. Some products may die early. e.g. the Apple car
-Some may stay in the maturity stage for a long time (decades or longer, e.g., Oreo cookies, Tabasco sauce, Quaker oatmeal, guinness Beer, etc.).
What uniquely characterizes the introduction stage?
-In the introduction stage, we often observe: low sales; negative profit(because we’re still so early on); fewer competitors(when it is a new product category or classification); and we see a high cost per customer.
-The customers that we would see are innovators. Innovators would be open to new ideas and to taking risk. Experts estimate that innovators compose about 2.5% of the market.
-In this stage, the company only offers a basic product.
-The marketing objective at this stage is to create awareness, and to incentivize trial.
