Solomon_ch08_basic by 1ygrs3W6

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									MARKETING
    Real People, Real Choices




           CHAPTER 8
    Creating the Product
    Chapter Objectives

• Explain the layers of a product
• Describe the classifications of products
• Explain the importance of new products
• Describe how firms develop new
  products
• Explain the process of product adoption
  and the diffusion of innovations



                                         8-2
  The Core Product

• Consists of all the benefits the product
  will provide for consumers or business
  customers
• A customer purchases a 1/2” drill bit.
  What does he want?
   – A 1/2” hole!
• Marketing is about supplying benefits,
  not products


                                             8-3
  The Actual Product

• Consists of the physical good or delivered
  service that supplies the desired benefit
• Example:
   – A washing machine’s core product is the
     ability to get clothes clean, but the actual
     product is a large, square, metal apparatus
• Actual product also includes appearance,
  styling, packaging, & the brand




                                               8-4
  The Augmented Product

• Consists of the actual product plus other
  supporting features such as warranty,
  credit, delivery, installation, & service
• Have you heard: “sell the sizzle not the
  steak?”




                                         8-5
  Classifying Consumer Products

• By how long they   • By how consumers
  last                 buy them
   – Durable            – Convenience
   – Nondurable         – Shopping
                        – Specialty
                        – Unsought




                                          8-6
  Classifying Business Products

• By how products are used
  – Equipment
  – Maintenance, repair, operating
  – Raw materials
  – Processed materials
  – Specialized services
  – Component parts


                                     8-7
  Convenience Products

• Good or service that consumers
  purchase frequently with a minimum of
  comparison and effort
• Types of convenience products
   – staples
   – impulse products
   – emergency products



                                          8-8
  Shopping Products

• Good or service for which consumers
  will spend time & effort gathering
  information on price, product attributes,
  & product quality
• Consumers compare alternatives before
  purchase
• Types of shopping products
   – attribute-based shopping products
   – price-based shopping products

                                          8-9
  Specialty Products

• Goods or services bought with much
  consumer effort in an extended
  problem-solving situation
• Consumers insist upon a particular item
  and will not accept substitutes
   – Rolex Watch: real or fake?




                                       8-10
  Unsought Products

• Goods or services for which a consumer
  has little awareness or interest until a
  need arises
• Require a good deal of advertising or
  personal selling to interest people

          1-800-Metlife



                                        8-11
   It’s New and Improved
• What is a new product?
  – According to the FTC, a new product
    is one that is entirely new or changed
    significantly and that product may be
    called new for only six months
  – From a marketing perspective, new is
    anything a customer perceives as
    new & different


                                         8-12
     New Product Development

• Idea Generation
• Product Concept Development &
  Screening
• Marketing Strategy Development
• Business Analysis
• Technical Development
• Market Testing
• Commercialization

                                   8-13
  Step 1: Idea Generation

• Sources of new ideas
  – customers
  – salespeople
  – service providers
  – anyone with direct customer contact




                                          8-14
  Step 2: Product Concept Development

• Expand ideas into more complete
  product concepts
• Describe what features the product
  should have and benefits those features
  will provide for consumers
• Evaluate the chance for technical and
  commercial success



                                       8-15
  Step 3: Marketing Strategy Development

• Develop a marketing strategy that can be
  used to introduce the product to the
  marketplace
   – Identify the target market
   – Estimate its size
   – Determine how the product can be
     positioned
   – Plan pricing, distribution, and promotion
     expenditures necessary for roll-out


                                                 8-16
  Step 4: Business Analysis

• Assess how the new product will fit into
  the firm’s total product mix
• Evaluate whether the product can be a
  profitable contribution for the
  organization’s product mix




                                         8-17
  Step 5: Technical Development

• Work with engineers to refine the design
  and production process
• Develop one or more prototypes
• Evaluate prototypes with prospective
  customers
• If applicable, apply for a patent




                                        8-18
  Market Testing

• Try out the complete marketing plan
  (product, price, place, and promotion) in
  a small geographic area that is similar
  to larger target market
   – Traditional test marketing is
     expensive and gives competition a
     chance to evaluate the new product
   – Simulated test markets eliminate
     competitive viewing and cost less

                                         8-19
  Commercialization

• Launch the product!
   – Full scale production
   – Distribution
   – Advertising
   – Sales promotion
   – and more




                             8-20
  Issues for Discussion

• Should knockoffs be illegal? Who is hurt
  by knockoffs? Is the marketing of
  knockoffs good or bad for consumers?
• What are some new products that have
  made our lives better? That have been
  harmful to consumers or to society?
  Should there be a way to monitor new
  products that are introduced?


                                        8-21

								
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