session 6: developing and managing products and services Flashcards
what is a product?
Anything offered to a market
can be for attention, acquisition, use, or consumption that may satisfy a want or need
can products include intangibles?
yeeee
services
events
persons (marketing activities to change a politician’s image)
places
organizations
ideas (ads against drunk driving)
what are services
Intangible activities
benefits
satisfaction
does not result in the ownership of anything
can a service be considered a product?
YEEEE
an intangible product
what are the three levels at which products are evaluated?
- customer core value
- actual product
- augmented product
- customer core value
what is the customer actually buying
e.g. iPhone is buying connectivity
- actual product
brand name
quality level
packaging
design
features
- augmented product
delivery and credit
after-sale service
warranty
product support
what are consumer products?
purchased by consumers for their personal use
not for business
what are the four types of consumer products
convenience
shopping
specialty
unsought
what is a convenience consumer product?
you don’t think about it
the customer usually buys frequently, immediately, and with a minimum comparison and buying effort
what is a shopping consumer product?
more expensive and you will actually do research and compare
less frequently purchased
what is a specialty product?
products with unique characteristics or brand identification
significant group of buyers is willing to make a special purchase effort
what is a unsought product?
you don’t know about or don’t wanna think about it
give examples of convenience products
Newspapers
Candy
Fast food
give examples of shopping products
Furniture
Television
Appliances
give examples of specialty products
Luxury goods
Designer clothes
Rolex watches
give examples of unsought products
Life insurance
Funeral services
Blood donations
what are industrial products?
those purchased for further processing or for use in conducting a business
what is the distinction between a consumer product and an industrial product based on?
the purpose for which the product is bought
If a consumer buys a lawn mower for use around home, the lawn mower is a consumer product
If the same consumer buys the same lawn mower for use in a landscaping business, the lawn mower is an industrial product
what are the three categories for industrial products?
Materials and parts: wheat, iron etc.
Capital items: buildings, installations and generators
Supplies and services: paper, pencil, legal services
what is new product development?
Development of original products, improvements, modifications, or new brands
it is expensive and risky
why is new product development risky?
Most new products fail or underperform
what is the diffusion of innovation theory?
divides people into segments according to how likely they are to adopt a new idea
what is the technology adoption life cycle
starts with innovators
then early adopters (opinions leaders)
then early majority
then late majority
and ends with laggards
what are the steps in the new product development
- idea generation
- idea screening
- concept development and testing
- marketing strategy development
- business analysis
- product development
- test marketing
- commercialization
where can idea generation come from?
internal sources
external sources
crowdsourcing
who are the internal sources for idea generation
Company employees at all levels
who are the external sources for idea generation
Customers
Competitors
Distributors and suppliers
what is crowdsourcing?
inviting broad communities of people into the new product innovation process
who can be invited for crowdsourcing ?
customers
employees
independent scientists
researchers
public
where does crowdsourcing happen?
trade magazines and shows,
advertising agencies
marketing research firms
laboratories
what is ideas screening (2)
Whole bunch of ideas but gotta narrow it down to one
Keep good ideas and drop poor ones
what will the comitee look at when proposing new ideas for idea screening?
customer value proposition
target market
competition
what must you estimate when screening ideas?
market size
price
development time and costs,
manufacturing costs
rate of return
what must you evaluate when screening ideas?
Evaluate new-product ideas against a set of company criteria
product concept
New-product idea is stated in meaningful consumer terms
e.g. a detailed description or a drawing of an idea that can be shown to potential customers
Concept testing
Testing new-product concepts with groups of potential consumers
what do you use for product development and testing (3)
product concept
concept testing
Marketing Strategy Development (4)
initial marketing strategy
Describe the target market, planned value proposition, sales, market share, and profit goals
Outline the product’s planned price, distribution, and marketing budget
Describe the planned long-run sales and profit goals, marketing mix strategy
business analysis (5)
Review of the sales, costs, and profit projections
make sure it goes along with company objectives
what is it that triggers product development after the business analysis?
Positive review triggers product development
product development (6)
Develops concept into a physical product
Prototypes are developed and tested
what is the stage in the new product development process that costs a lot of money
the one that requires a large investment
the product development (6)
what are the three individual product decisions?
physical attributes
packaging
labelling (included in packaging)
product support services
what are all the physical attributes of a product?
the quality
the features
the style and design
what are product features?
competitive tool to differentiate a product
what is a product style
describes the appearance of the product
what is a product design
contributes to a product’s usefulness as well as to it looks
what is the use of packaging?
Is used as a key promotional tool
what is a major trend regarding product packaging?
Sustainable packaging
using recycled products
what is the use of labelling?
identify the product or brand
describe attributes
provide promotion
what are product support services?
how much support are we gonna provide to keep our customers happy
what is the product mix
The set of all products and items that a company markets
what are the four dimensions of the product mix
product width
product length
product depth
product consistency
product width
the number of different product lines the company carries
what is a product line
group of related products all marketed under a single brand name that is sold by the same company
Companies sell multiple product lines under their various brand names
they try to distinguish these
what is product length
total number of items the company carries within its product lines
fall within the scope of each product line
what is product depth
the number of versions offered of each product in the line
what is product consistency?
how closely related the various product lines are in end use, production requirements, distribution channels, etc.
ex: a company dealing in just dairy products has more consistency than a company dealing in all types of electronics
true or false
Product strategy must be adapted to suit local markets
yeee brooo
don’t want to accidentally offend anyone
what are the special characteristics of services?
intangibility
inseparability
variability
perishability
service intangibility
services cannot be seen, tasted, felt, heard, or smelled before purchase
service inseparability
services cannot be separated from their providers
service perishability
services cannot be stores for later sale or use
service variability
quality of service depends on who provides them and when, where, and how
what is service profit chain?
The chain that links service firm profits with employee and customer satisfaction
If the employee that deals with customer is happy, you’ll make money
what is internal marketing
Orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction
how does the service profit chain work
- give good quality job to your employees
- they will be satisfied and more productive
- their increased productiveness will provide better service value
- the better service value will result in happier customers
- happier customers will want your service and you’ll make profits
