ch9- developing new products and services

goods

anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need

service

an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything

experiences

many organizations sell EXPERIENCES not just the products or services they offer, but how these offerings will make customers feel

types of consumer products

convenience products

shopping products

specialty products

unsought products

consumer products- convencience

items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort

consumer products- shopping

items for which the consumer compares several alternatives on criteria such as price, quality, or style

consumer products- specialty

items that a consumer makes a special effort to search out and buy

consumer products- unsought

items that the consumer either does not know about or knows about but does not initially want

uniqueness of services- 4 I’s of services

intangibility

inconsistency

inseparability

inventory

assessment and improvement of service quality

reliability

tangibility

responsiveness

product and service decisions

product item decisions= stock keeping unit

product line decisions= group of items that are closely related

product mix decisions= all the product lines offered

newness: the consumer’s perspective

1. continuous innovation

2. dynamically continuous innovation

3. discontinuous innovation

continuous innovation

requires no new learning by consumers

ex: new improved shaver, detergent, toothpaste

dynamically continuous innovation

disrupts consumer’s normal routine but does not require totally new learnings

ex: electric toothbrush, LED HDTV’s, smartphones

discontinuous innovation

requires new learning and consumption patterns by consumers

ex: wireless router, digital video recorder, electric car

new product development stages

1. new-product strategy development

2. idea generation

3. screening and evaluation

4. business analysis

5. development

6. market testing

7. commercialization

new product development stages- stage 1: new- product strategy development

a protocol is a statement that, before product development begins, identifies

1. a well-defined target market

2. specific customers’ needs, wants, and preferences

3. what the product will be and do to satisfy consumers

new product development stages- stage 2: idea generation

develops a pool of concepts to serve as candidates for new products, building upon the previous stage’s results

employees

customer suggestions

• crowdsourcing

supplier suggestions

new product development stages- stage 3: screening and evaluation

internally and externally evaluates new-product ideas to eliminate those that warrant no further effort

internal approach

• customer experience management (CEM)

external approach

• concept tests

new product development stages- stage 4: business analysis

specifies the features of the product or service and the marketing strategy needed to bring it to market and make financial projections

• prototype- full scale model

• business fit of new product

• financial projections

new product development stages- stage 5: development

turns the idea on paper into a prototype

results in demonstrable product

lab and consumer tests

Ex: waymo’s driverless car

new product development stages- stage 6: market testing

exposes actual products to prospective consumers under realistic purchase conditions to see if they will buy

• standard test markets

• controlled test markets

• simulated test markets (STMs)

new product development stages- stage 7: commercialization

positions and launches a new product in full-scale production and sales

ex: the boeing 787 dreamliner experience= technical problems

burger king french fries= too complicated to get right

marketing reason for new product failures

insignificant point of difference

incomplete market and product before product development starts

not satisfying customer needs on critical factors

bad timing

poor quality

organizational inertia in new product failures

group think

not invented here (NIH) syndrome

• open innovation