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C HAPTER. DEVELOPING NEW PRODUCTS AND SERVICES. Product Item. A specific version of an organization’s products. Product Line. A group of closely-related product items. Product Mix. All products that an organization sells. Product Items, Lines, and Mixes. (SKU).

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CHAPTER

DEVELOPING NEW PRODUCTS AND SERVICES


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Product Item

A specific version of an organization’s products.

Product Line

A group of closely-related product items.

Product Mix

All products that an organization sells.

Product Items, Lines, and Mixes

(SKU)

Each has a unique number and bar code


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Classifying Products

  • Type of User

  • Consumer Goods

  • Business Goods

  • Degree of Tangibility

  • Nondurable Good-used up in a few uses

  • Durable Good-lasts over many uses

Examples??

  • Services


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The Characteristics of Services

Services that cannot be touched, seen, tasted, heard, or felt in the same manner as goods.

Intangibility

A characteristic of services that allows them to be produced and consumed simultaneously.

Inseparability

A characteristic of services that makes them less standardized and uniform than goods.

Heterogeneity

A characteristics of services that prevents them from being stored, warehoused, or inventoried.

Perishability


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  • Intangibility

  • Inseparability

  • Inconsistency

  • Inventory

  • Idle Production Capacity-

    like stock out costs and holding costs for goods

THE VARIATIONS OF PRODUCTS

Can be reduced by using commission and part time workers


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A relatively inexpensive item that merits little shopping effort.

Convenience

Product

Shopping

Product

A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.

Specialty

Product

A particular item that consumers

search extensively for and are reluctant to accept substitutes.

A product unknown to the potential buyer or a known product that the buyer does not actively seek.

Unsought

Product

CLASSIFYING GOODS AND SERVICES




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What Is A New Product forecasts

  • Functionally Different from Existing Products

  • FTC: Newness = 6 Months or less After Regular Distribution

  • Company: Simply Anything Different


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FIGURE 10-D forecastsWhat it takes to launch one commercially successful new product


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Reasons for New Product Failures forecasts

  • Bad Timing

  • Too Little Market Attractiveness

  • Poor Execution of the Marketing Mix: Name, Price, Promotion, and Distribution

  • No Access to Buyers

  • Insignificant Point of Difference

  • Poor Product Quality

  • Insensitivity to Customer Needs on Critical Factors






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THE NEW-PRODUCT PROCESS- forecasts

Idea Generation

  • Customer and Supplier Suggestions

  • Employee and Co-Worker Suggestions

  • Research and Development Breakthroughs

  • Competitive Products


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THE NEW-PRODUCT PROCESS- forecasts

Screening and Evaluation

The first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new-product strategy or are inappropriate for some other reason.


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Demand forecasts

Considerations in Business Analysis Stage

Cost

Sales

Profitability

THE NEW-PRODUCT PROCESS-

Business Analysis

  • if positive, build a prototype


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THE NEW-PRODUCT PROCESS-Development forecasts

  • Safety Tests

  • “Failure Analysis”

  • Marketing strategy

  • Packaging, branding, labeling

  • Manufacturing feasibility

  • Final government approvals if needed


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THE NEW-PRODUCT PROCESS- Test Marketing forecasts

The limited introduction of a product

and a marketing program to determine

the reactions of potential customers

in a market situation.


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When Test Markets Don’t Work forecasts

  • Limited time to market

  • Service nature of the item

  • Time to see product benefit is long

  • Number of units produced is small


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Six important U.S. test markets “demographics winner”: Wichita Falls, Texas, metropolitan statistical area


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  • Product Positioning is marketing’s job here

  • Speed as a Factor in New-Product Success

  • Time to Market- important high tech items

  • Fast Prototyping – do it, try it, fix it

  • Parallel Development – Gantt chart usage

THE NEW-PRODUCT PROCESS-

Commercialization

Most expensive stage


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To Review: The New Product Process Wichita Falls, Texas, metropolitan statistical area


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Product Wichita Falls, Texas, metropolitan statistical area

A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value.


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Product Line Wichita Falls, Texas, metropolitan statistical area

A product line is a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range.


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Product Mix Wichita Falls, Texas, metropolitan statistical area

The product mix is the number of product lines offered by a company.


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Consumer Goods Wichita Falls, Texas, metropolitan statistical area

Consumer goods are products purchased by the ultimate consumer.


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Business Goods Wichita Falls, Texas, metropolitan statistical area

Business goods are products that assist directly or indirectly in providing products for resale. Also called as B2B goods, industrial goods, or organizational goods.


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Services Wichita Falls, Texas, metropolitan statistical area

Services are intangible activities or benefits that an organization provides to consumers in exchange for money or something else of value.


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Idle Production Capacity Wichita Falls, Texas, metropolitan statistical area

Idle production capacity occurs when the service provider is available but there is no demand.


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New-Product Process Wichita Falls, Texas, metropolitan statistical area

The new-product process consists of seven stages a firm goes through to identify business opportunities and convert them to a salable good or service.


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