marketing chapter 6

mktg 3110

new products

new products

one that is new to a company in any way

-if a product is functionally different from existing products in the market or is not marketed in its current form or manner by the company, it can be considered a new product

new product categories

1. new to market products

2. new category entries

3. product line extensions

4. revamped products

new to product marketings (1)

inventions that have never been seen before and that create a new market

new category entries (2)

involve the introduction of products new to a company but not new to the marketplace

product line extensions (3)

products that extend and supplement a companies already established product line

revamped products (4)

existing products that have been changed in some way

7 stages of new product development

1. new product strategy development

2. idea generation

3. idea screening

4. business analytics

5. product development

6. test marketing

7. product launch

new product strategy development (s1)

determining the direction a company will take when it develops a new product

idea generation (s2)

involves coming up with a set of product concepts form which to identify potentially viable new products

idea screening (s3)

involves evaluating the ideas to determine whether it fits into the new product strategy

business analysis (s4)

undertaken to determine profitability

product development (s5)

confirms that the product can be made in a way that meets customer needs and generates profit

test marketing (s6)

involves introducing a potential new product to a geographically limited market

product launch (s7)

involves making the product available to the market

risks of new product development

product may prove to be dangerous, defective, or produce less than expected revenue

reduce risks of new product development

1. listening to the customer carefully

2. making a commitment to a NPD process

3. understanding current market trends and anticipating changes in the market

4. asking the right questions

5. being willing to fail on occasion

ethical and sustainable issues in new product development

ethical issues

1. FTC definition of the term “new” -to be called new, the product must be changed in a “functionally significant or substantial respect”

2. if company chooses not to develop important new products until an existing product has become obsolete or its patent has expired

3. planned obsolescence- occurs when companies frequently come out with new models of a product that make existing models obsolete

sustainability

1. built on the concept of sustainable design, philosophy of building products and services in a way that eliminates negative environmental impacts

5 steps of product adoption

1. awareness

2. interest

3. evaluation

4. trial

5. adoption

implication of adoption to makers

various new product characteristics affect the adoption rate

1. competitive advantage, compatibility, observability, complexity, ability of potential new consumers to try products

2. marketing products internationally: cosmopolitarnism, modernity, similarity of consumers, physical distance

5 stages of products life cycle

1. product development

2. introduction- sales increase slowly as firms marketing activities begin to raise awareness of product

3. growth- brings spike in sales and profits as consumers recognize the products ability to satisfy their needs and wants

4. maturity- sales and profits begin to decline as competition increases and customers begin to look for the next big thing

5. decline- sales and profits fall off completely

how product life cycle affect marketing mix

• number of products or services a company offers

• extent of their distribution

• types of promotions

• prices charges

product

the specific combination of goods, services, or ideas that a firm offers to consumers

goods

tangible products with physical dimensions

services

intangible products

ideas

intangible and represent formulated thoughts or opinions

4 types of consumer products

1. Convenience products

2. shopping products

3. specialty products

4. unsought products.

product line

group of related products marketed by the same firm

cannibalization

reduction in sales volume or market share of a company existing product due to the introduction of a new product made by the same company

newness

the level and state of a product being new or different in a market