Marketing - Chapter 11: Developing and Managing Goods and Services

line extension

Development of a product closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs

product modification

Change in one or more characteristics of a product

quality modifications

Changes relating to a product’s dependability and durability

functional modifications

Changes affecting a product’s versatility, effectiveness, convenience, or safety

aesthetic modifications

Changes to the sensory appeal of a product

disruptive innovation

Identifies old technologies that can be exploited in new ways or develops new business models to give customers more than they’ve come to expect from current products in a specific market

new-product development process

A seven-phase process for introducing products

idea generation

Seeking product ideas that will help organizations to achieve objectives

screening

Choosing the most promising ideas for further review

concept testing

Seeking potential buyers’ responses to a product idea

business analysis

Evaluating the potential contribution of a product idea to the firm’s sales, costs, and profits

product development

Determining if producing a product is technically feasible and cost effective

test marketing

Introducing a product on a limited basis to measure the extent to which potential customers will actually buy it

commercialization

Deciding on full-scale manufacturing and marketing plans and preparing budgets

product differentiation

Creating and designing products so that customers perceive them as different from competing products

quality

Changes relating to a product’s dependability and durability

level of quality

The amount of quality a product possesses

consistency of quality

The degree to which a product has the same level of quality over time

product design

How a product is conceived, planned, and produced

styling

The physical appearance of a product

product features

Specific design characteristics that allow a product to perform certain tasks

customer services

Human or mechanical efforts or activities that add value to a product

product positioning

Creating and maintaining a certain concept of a product in customers’ minds

product deletion

Eliminating a product from the product mix

intangibility

A service is not physical and therefore cannot be touched

inseparability

Being produced and consumed at the same time

perishability

The inability of unused service capacity to be stored for future use

heterogeneity

Variation in quality

client-based relationships

interactions that result in satisfied customers who use a service repeatedly over time

customer contact

The level of interaction between provider and customer needed to deliver the service

off-peak pricing

The practice of reducing prices of services used during slow periods in order to boost demand

product manager

The person within an organization responsible for a product, a product line, or several distinct products that make up a group

brand manager

The person responsible for a single brand

venture team

A cross-functional group that creates entirely new products that may be aimed at new marketsA cross-functional group that creates entirely new products that may be aimed at new markets

phase-out

allows the product to decline without a change in the marketing strategy; no attempt is made to give the product new life.

run-out

exploits any strengths left in the product. Intensifying marketing efforts in core markets or eliminating some marketing expenditures, such as advertising, may cause a sudden jump in profits.

immediate drop

unprofitable product, is the best strategy when losses are too great to prolong the product’s life.