1 / 38

DEVELOPING NEW PRODUCTS AND SERVICES

DEVELOPING NEW PRODUCTS AND SERVICES. Layers of the Product Concept. 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 s/he want? A 1/2” hole!

lilah
Download Presentation

DEVELOPING NEW PRODUCTS AND SERVICES

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. DEVELOPING NEW PRODUCTS AND SERVICES

  2. Layers of the Product Concept

  3. 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 s/he want? • A 1/2” hole! • Marketing is about supplying benefits - not products.

  4. 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, and the brand

  5. The Augmented Product • Consists of the actual product plus other supporting features such as warranty, credit, delivery, installation, and repair service after the sale

  6. Classification of consumer goods

  7. Classifying Products

  8. Shopping Products • Good or service for which consumers will spend time and effort gathering information on price, product attributes, and product quality • Consumers will tend to compare alternatives before making a purchase • Types of shopping products • attribute-based shopping products • price-based shopping products

  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 • Example: • Sony’s AIBO Robot Dog

  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

  11. Business Products Equipment: Installations & Accessories Specialized Services Processed Materials Business Product Classes MRO Supplies Raw Materials Component Parts and Materials

  12. Life-Changing Innovations • CD • Photocopier • Fax • Cell phone • Post-it Notes • Air conditioner • Microwave What is your favorite life-changing innovation?

  13. Types of Innovations • Innovations differ in their degree of newness and this helps to determine how quickly products will be adopted by a target market • The more novel the innovation, the slower the diffusion process • Innovation continuum is based on the amount of disruption or change

  14. Innovation Continuum Continuous Dynamically Discontinuous Continuous Little to no change Extreme changes

  15. “New” Products • What is a New Product? • Newness Compared with Existing Products • Newness in Legal Terms • Newness from the Company’s Perspective • Newness from the Consumer’s Perspective

  16. Consumption effects define newness

  17. Marketing Reasons for New Product Failures • Insignificant “point of difference” • Incomplete market and product definition • Too little market attractiveness • Poor execution of the marketing mix • Poor product quality or sensitivity • Bad timing • No economical access to buyers

  18. Stages in the new-product process

  19. 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

  20. Idea Generation • Sources of new ideas • customers • salespeople • research and development breakthroughs • competitive products • anyone with direct customer contact

  21. Product Concept Development and Screening • 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 – internal and external

  22. 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 organization’s product mix • Only after approval at this stage does significant development $$ expenditure begin

  23. 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

  24. 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

  25. Six important U.S. test markets

  26. Commercialization • Launch the product! • Full scale production • Distribution • Advertising • Sales promotion • and more

  27. Adoption and Diffusion Processes • Adoption is the process by which a consumer or business customer begins to buy and use a new good, service, or idea • Diffusion describes how the use of a product spreads throughout a population

  28. Six Stages of Adoption Confirmation Adoption Trial Evaluation Interest Awareness

  29. Diffusion Process • Concerned with the broader issue of how an innovation is communicated and adopted throughout the marketplace • The process of spreading out - PLC • Adopter categories • Five different type of consumers • Normal distribution

  30. The Product Life Cycle

  31. Adopter Categories Mean Time of Adoption Innovators (2.5%) Early Adopters (13.5%) Early Majority (34%) Late Majority (34%) Laggards (16%)

  32. Innovators • 2.5%, the first to accept a new idea or product • Venturesome and willing to take risks • Cosmopolites: willing to seek social relationships outside of their local peer group • Rely heavily on impersonal information sources

  33. Early Adopters • 13.5%, the second to adopt an innovation • Heavy media users • Tend to be concerned with social acceptance • Opinion leaders primarily come from the early adopter group

  34. Early Majority • 34% adopt the product prior to the mean time of adoption • Deliberate and cautious • Spend more time in the innovation decision process • Slightly above average in education and social status

  35. Late Majority • 34% follow the average adoption time • Older, more conservative • Peers are the primary source of new ideas • Below average in education, income and social status • Wait to purchase until product has become a necessity and/or peers pressure to adopt

  36. Laggards • 16% - last to adopt an innovation • Lower in social class than other categories • Bound by tradition • Product may have already been replaced by another innovation

  37. Marketing information and methods used in the new-product process

More Related