A product is a good, service, or idea consisting of a bundle of tangible and intangible features that satisfies consumers and is received in exchange for money or some other unit of value. A company's product decisions involve the product item, product line, and range of its product mix.
Products can be classified by user and tangibility. By user, the major distinctions are consumer or business goods or services. By degree of tangibility, products divide into nondurable goods, durable goods, and services. Services have four unique elements: intangibility, inconsistency, inseparability, and inventory.
Consumer goods consist of convenience, shopping, specialty, and unsought products. Business goods are for either production or support. Services can be classified according to whether they are provided by people or equipment, in terms of tax status (profit vs. not-for-profit), or whether the service is provided by a government agency.
In terms of its effect on a consumer's use of a product, a discontinuous innovation represents the greatest change and a continuous innovation the least. A dynamically continuous innovation is disruptive but not totally new.
The failure of a new product is usually attributable to one of seven marketing reasons: insignificant point of difference, incomplete market and product definition before product development begins, too little market attractiveness, poor execution of the marketing mix, poor product quality on critical factors, bad timing, and no economical access to buyers.
The new-product process consists of seven stages. Objectives for new products are determined in the first stage, new-product strategy development; this is followed by idea generation, screening and evaluation, business analysis, development, market testing, and commercialization.
Ideas for new products come from several sources, including consumers, suppliers, employees, R&D laboratories, and competitors.
Screening and evaluation can be done internally or externally.
Business analysis involves defining the features of the new product, a marketing strategy to introduce it, and a financial forecast.
Development involves not only producing a prototype product but also testing it in the lab and on consumers to see that it meets the standards set for it.
In market testing new products, companies often rely on market tests to see that consumers will actually buy the product when it's offered for sale and that other marketing mix factors are working. Products surviving this stage are commercialized - taken to market.
