Ch 11: Product, Branding, and Packaging Decisions and Ch 12: Developing New Products

Product

anything that can be offered in a market for attention, acquisition, use, or

consumption that might satisfy a need or want

• Soap

• Toothpaste

Service

a form of product that consists of activities, benefits, or satisfactions offered

for sale that are essentially intangible and do not result in ownership

• Doctor’s exam

• Legal advice

Experiences

represent what buying the product or service will do for the customer

• Disney

• American Girl

• Toys “R” Us

Levels of Product and Services

• Core benefits

• Actual product

• Augmented product

Core benefits

represent what the buyer is really buying

– ex: Toothpaste – clean teeth

Actual product

represents the design, brand name,and packaging that delivers the core benefit to the customer

– ex: Toothpaste -- Crest

Augmented product

represents additional services or benefits of the actual product

– ex: warranty, delivery policy

Product attributes

are the benefits of the product or service

• Quality

• Features

• Style and design

Quality level

the level of quality that supports the product’s positioning

Performance quality

the ability of a product to perform its functions

Product features

a competitive tool for differentiating a product from competitors’ products

• Product features are assessed based on the value to the customer versus the cost to the company

Brand

the name, term, sign, or design, or a combination of these, that identifies the maker or seller of a product or service

Ex: JetBlue

KFC

Packaging

involves designing and producing the container or wrapper for a product

ex: Paul Mitchell

• Primary container

• Secondary container

• Shipping package

Label

identifies the product or brand, describes attributes, and provides promotion

• Identifies product

• Grade product (Grade A)

• Describe product

• Promote product with graphics

New product development

refers to original products, product improvements, product modifications, and new brands developed from the firm’s own research and development

New Product Development 8 Stages

1. Idea generation

2. Idea screening

3. Concept development and testing

4. Marketing strategy development

5. Business analysis

6. Product development

7. Test marketing

8. Commercialization

1 New idea generation

the systematic search for new product ideas

Sources of new-product ideas:

• Internal

• External

Internal sources

refer to the company’s own formal research and development, management and staff, and intrapreneurial programs

External sources

refer to sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms

2 Idea screening

refers to reviewing new- product ideas in order to spot good ideas and drop poor ones as soon as possible

Product idea

an idea for a possible product that the company can see itself offering to the market

3 Product concept

a detailed version of the idea stated in meaningful consumer terms

3 Concept testing

refers to new-product concepts with groups of target consumers

4 Marketing strategy development

refers to the initial marketing strategy for introducing the product to the market

Marketing strategy statement

Part 1:

• Description of the target market

• Product positioning, sales, market share, and profit goals

Part 2:

• Price, distribution, and budget

Part 3:

• Long-term sales, profit goals, and marketing mix strategy

5 Business analysis

involves a review of the sales, costs, and profit projections to find out whether they satisfy the company’s objectives

6 Product development

involves the creationand testing of one or more physical versions by the R&D or engineering departments

• Requires an increase in investment

7 Test marketing

the stage at which the product and marketing program are introduced into more realistic marketing settings

Test marketing provides the marketer with experience in testing the product and entire marketing program before full introduction

8 Commercialization

is the introduction of the new product

• When to launch

• Where to launch

• Planned market rollout