Convenience Products
are items that consumers purchase frequently, conveniently and with a minimum of shopping effort (Toothpaste or hand soap)
Shopping Products
are items for which the consumer compares several alternative on criteria such as price, quality and style (Camera or TV)
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Specialty Products
are items that the consumer makes a special effort to search out and buy (Rolls-Royce or Rolex Watch)
Unsought Products
are items that the consumer doesn't know about or knows about but does not initially want (burial insurance)
Intangibility
are services that can not be touched or seen before the purchase decision
Inconsistency
Services depend on the people who provide them, so the quality varies from each persons capabilities
Inseparability
the consumer cannot distinguish the service provider from the service itself (University lectures are excellent but can't get questions answered so its poor)
Inventory
handling costs that relate to their storage, perishability and movement.
Product Item
is a specific product that has a unique brand, size or price.
Product Line
is a group of product/service items that are closely related to each other because they satisfy the same need (Vitamin Water Flavors)
Product Mix
All product lines offered by an organization (Coke, vitamin water, Dasani)
Continuous Innovation
Requires NO new learning by consumer (Improved toothpaste or detergent)
Dynamically Continuous Innovation
disrupts consumers normal routine but does not require totally new learning (electronic toothbrush or disk player)
Discontinuous Innovation
Requires new learning and consumption patterns by customers (wireless router or electric car)
New product
this term is limited to use with a product up to six months after it enters regular distribution
Why products fail
1. nothing new about it
2. not enough room on the shelf for it
3. lack of explaining how you are going to satisfy customer wants and needs
4. not satisfying customers needs
5. bad timing
6. poor quality
7. tiny market segment
8. poor marketing mix execution
Organization product failures
1. not listening to voice of consumer
2. skipping steps in the new product process
3. poor quality
4. people are afraid to shoot down dumb ideas
5. not learning from past failures
6. NIH (not invented here) problem
New product process
seven stages an organization goes through to identify business opportunities and covert them into salable products or services.
New product process stages
1. Strategy Development
2. Idea Generation
3. Screening and evaluation
4. Business Analysis
5. Development
6. Market Testing
7. Commercilization
Strategy Development
defines the role for a new product in terms of the firms objectives. Use SWOT analysis and environmental scanning.
Idea Generation
involves developing a pool of concepts to serve as candidates for new products
Screening and evaluation
internally and externally evaluate new product ideas to eliminate those that suck
Business Analysis
specifies the features of the product and the marketing strategy
Development
the stage that turns the idea on paper into a prototype
Market Testing
exposing actual products to prospective buyers under realistic purchasing conditions to see if they will buy
Commercilization
positions and launches a new product in full scale production and sales.
Product life cycle
describes the stages a new product goes throught in the marketplace: introduction, growth, maturity and decline
Introduction lifecycle stage
sales grow slowly and profit is minimal,
Growth lifecycle stage
rapid increase in sales, competitors appear, repeat purchasers develop, improved version or new features added to the product to differentiate it from compitition
Maturity lifecycle stage
slowing of total industry sales, marginal competitors begin to leave the market, few new buyers enter the market. focused on holding market share and finding new buyers
Decline lifecycle stage
when sales drop, consume disproportionate shore of management and financial resources relative to their future worht
Deletion lifecycle stage
company completely deletes the product line
Harvesting lifecycle stage
when a company retains the product but reduces marketing costs.
High learning product (graph)
significant customer education s required and there is an extended introductory period (graph)
Low learning product (graph)
being immediately because little learning is required by the consumer, and the benefits of purchase are easily understood
Fashion product (graph)
is a style of the times, frequently appear in men and women's apparel. Introduced, decline and then return.
Fad (graph)
rapid sales on introduction and then an equally rapid decline. these products are typically novelties and have a short lifecycle.
Innovators
venturesome, highly educated
Early adopters
leaders in social settings, sightly above average education
Early Majority
deliberate, many informal social contacts
Late Majority
skeptical, below average social status
Laggards
fear of debt, neighbors and friends are information source
Product lifecycle and consumers
1. Innovators
2. Early Adopters
3. Early Majority
4. Late Majority
5. Laggards
Role of product manager
manages marketing efforts for a close knit family of products. Responsible for managing existing products through the stages of the life cycle.May be responsible for developing new products. Engage in extensive data analysis.
Modifying the product
involves altering one or more of a products characteristics such as quality, performance or appearance to increase products value and increase sales
Modifying the market
when a company tries to find new customers, increase a products use, or create a new use situation
Brand personality
set of human characteristics associated with a brand name
Brand equity
added value a brand name give to a product beyond the functional benefits provided
Creating brand equity
pyramid: brand awareness (who they are, what they do), brand performance/imagery (relay positive brand), consumer judgements/feelings (human centered) and consumer connection (harley davidson and ford)
Branding stategies
multi-product, multi-brand, private label and mixed
Multiproduct
companies use one name for all its products in a product class (ipod, iphone, ipad)
Multibrand
involves giving each product a distinct name (cheers, bold, tide)
Private label
when company manufacturers products but sells them under the brand name of a wholesaler or retailer (target owns archery farms, up and up, mossimo)
Mixed
manufacturer markets its own brand but someone else can buy and resell it (heinz ketchup can be bought by target and rebranded to archer farms)
Benefits of product packaging
1. provided information to the customer
2. creates a perception in consumers mind
3. distinguishes it from competitors