Marketing Chapter 8 Lecture 7 New Product Development

Product

A good, service, or idea consisting of a bundle of touchable and untouchable attributes that satisfy consumer needs and is received in exchange for money and something else of value.

Good

Touchable attributes that a consumer’s senses can perceive. Durable or Non - durable.

Services

Untouchable activities or benefits that an organization provides to satisfy consumer’s needs.

Ideas

A thought that leads to a product or action.

Bundle of attributes are?

• brand value

• specs

• safety

• design

Consumer products

Products purchased by the ultimate consumer

Convenience product

frequently purchased consumer item that is readily available and typically bought with minimal effort.

Shopping products

consumer goods people compare before buying, usually by price, quality, and features.

Speacialty product

a product that certain consumers will actively seek to purchase because of unique characteristics or loyalty to a specific brand.

Unsought product

a product of which consumers are unaware or are not that interested in actively pursuing for purchase.

_____ are a result of derived demand from consumer products.

Sales

Product Hirearchy in order

1. Item

2. Product Type

3. Product Line

4. Product Class

5. Product Family

6. Product Need

I TAKE LOW CLASS FUN NOW

Defiining new products

• Compared with Existing products

• From the consumers’ perspective

• From the organization’s perspective

• In Legal Terms

Continuous Innovation

Requires no new learning by consumers

Dynamically continuous innovation

Disrupts consumer’s normal routine but does not require totally new learning

Discontinuous Innovation

Requires new learning and consumption patterns by consumers

reason why products fail

A new product or service needs a protocol with

• well-defined target market

• Specific consumers’ needs, wants and preferences

• What the product will be and do to satisfy the consumer

NPD Process

1. New-product strategy development

2. Idea generation

3. Screening and evaluation

4. Business analysis

5. Development

6. Market testing

7. Commercialization

Strategy Development

Defines the role for a new product in terms of the firm’s overall objectives

Internal Idea Testing

Evaluating the difficulty of the proposal and whether it is in line with company objectives

External Testing

Pre testing of the new product idea with consumers.

Business Analysis

the process of examining and evaluating business demands and identifying solutions to potential challenges.

Test markets

a controlled environment where a new product, service or marketing strategy is introduced on a smaller scale to evaluate its performance.

Simulated test markets

to better understand potential customers and the reasoning behind their decision making.

Commercialization

when something turns into a money-making business.