D373 Section 2: Lesson 1 Product Development

Customer perceived value

the believe of a customer (or not) that a product or service is going to satisfy their wants or needs

Disruption

Reimagining an industry through new business models, products, distribution, and pricing

Economic benefit

the consumer determines other things related to price like service, durability, reliability, and value, which consciously and subconsciously affect the purchase decision

Emotional reasoning

Purchasing a product based on the way it makes you feel

Functional benefit

What it actually does / how it provides utility

Product bundle

An offering that includes both the product and a service

Product management

a broad set of activities and functions that support the development, marketing, and sale of your product or service.

Product marketing

refers to the marketing of a tangible good or a service- including, developing the product, identifying the target market, and determining price, promotion, and distribution of the product

Psychological benefit

a product purchase that satisfies more intangible needs of the consumer beyond the functionality of the product - safety, prestige, belonging, etc.

Rational reasoning

Refers to justifying a product purchase with a logical or "legitimate" reason that supports rational thinking

Scarcity marketing

Creates a perception of a shortage (or actual shortage) which aims to entice customers to purchase out of fear that they may not be able to get it in the future.

Agile

A methodology to more efficiently and effectively develop software products

Augmented product

the actual product plus other supporting features such as a warranty, credit, delivery, installation, and repair service after the sale, which differentiates it from the competition

Porter's Five Forces

threat of entry, threat of substitute, supplier power, buyer power, and competitive rivalry

Bargaining power of customers

the ability of customers to influence the price that they will pay for the firm's products or services (Porter's Five Forces)

Bargaining power of suppliers

the threat that suppliers may raise prices or reduce the quality of purchased goods and services (Porter's Five Forces)

Core benefit

the service or benefit the customer is really buying (the fundamental need or want that the product addresses)

Competitive rivalry

the frequency and intensity of reactions to actions undertaken by competitors (Porter's Five Forces)

Diversification

a strategy of increasing sales by introducing new products into new markets (Ansoff Matrix)

Down market product line stretch

When a brand currently serving a middle or upper market wants to serve a lower-level market

Expected product

a set of attributes and conditions buyers normally expect when they purchase this product

Generic product

a no-frills, no-brand-name, low-cost product that is simply identified by its product category (minimum viable product)

Ansoff Matrix (Growth Strategies)

Market penetration, product development, market development, diversification

Market development

company growth by identifying and developing new market segments for current company products (Ansoff Matrix)

Market penetration

a marketing strategy that tries to increase market share among existing customers (Ansoff Matrix)

Minimum viable product

A product with just enough features to satisfy early customers, and to provide feedback for future product development. Fulfills basic needs of customers.

New Entrants

the threat of new competitors entering the market (Porter's Five Forces)

Potential product

all the possible augmentations and transformations the product or offering might undergo in the future.

Product development

company growth by offering modified or new products to current market segments (Ansoff Matrix)

Product line stretch

When a company pursues additional market share by selling more of its products or developing news products or brands to address different segments of the market

Substitute products or services

products and services outside the industry that serve the same customer needs as the industry's products and services (Porter's Five Forces)

Two-way market product line stretch

When a brand wants to cover a majority of the market including the lower and higher end

Up market product line stretch

When a brand currently serves a lower market and wants to serve a higher-level or premium market

Value exchange

The value of goods and services in exchange for other goods and services or money in the marketplace (companies provide a product/service in exchange for payment from customers)

Tangible factors influencing purchase decisions

Quality, Form, Functionality, Aesthetics, Packaging, Purchase process, Customer experience, User experience

Intangible factors influencing purchase decisions

Price, Research, Customer experience, Branding, Promotion, Self-identity, Community Value

Omnichannel

Providing customers with a unified experience across customer channels, which may include online, mobile, catalog, phone, and retail. Pricing, recommendations, and incentives should reflect a data-driven, accurate, single view of the customer.

Product Development Process

1. Ideation: coming up with product ideas worthy of additional development

2. Research: discussion and feedback from customers, employees, vendors

3. Planning: drawings, sketches, descriptions of envisioned final product

4. Prototyping: developing an early stage version of the product that can be shown to manufacturers or shared with designers and developers (if a software product)

5. Sourcing: finding suppliers, vendors, designers, and developers

6. Costing: ascertaining the cost of goods sold as well as other costs (warehousing, distribution, shipping, etc.)

7. Production: undertaking production either externally or internally to develop product for market delivery

Product Life Cycle

The stages through which goods and services move from the time they are introduced on the market until they are taken off the market. Introduction, growth, maturity, decline.

Diffusion of Innovation Theory

innovators, early adopters, early majority, late majority, laggards