LO1  Recognize the various terms that pertain to products and services.

A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value. Firms can offer a range of products, which involve decisions regarding the product item, product line, and product mix.

LO2  Identify the ways in which consumer and business goods can be classified.

Products can be classified by type of user and tangibility. By user, the major distinctions are consumer goods, which are products purchased by the ultimate consumer, and business goods, which are products that assist in providing other products for resale. By degree of tangibility, products may be classified as (a) nondurable goods, which are consumed in one or a few uses, (b) durable goods, which are items that usually last over an extended number of uses, or (c) services, which are activities, benefits, or satisfactions offered for sale.
Consumer goods can further be broken down based on the effort involved in the purchase decision process, marketing mix attributes used in the purchase, and the frequency of purchase: (a) convenience goods are items that consumers purchase frequently and with a minimum of shopping effort, (b) shopping goods are items for which consumers compare several alternatives on selected criteria, (c) specialty goods are items that consumers make special efforts to seek out and buy, and (d) unsought goods are items that consumers do not either know about or initially want.
Business goods can further be broken down into (a) production goods, which are items used in the manufacturing process that become part of the final product, such as raw materials or component parts, and (b) support goods, which are items used to assist in producing other goods and services and include installations, accessory equipment, supplies, and services.

LO3  Explain the implications of alternative ways of viewing "newness" in new products and services.

A product may be defined "new" if it (a)is functionally different from the firm's existing products, (b) falls within a country's laegal definition of the term, (c) is a product line extension, a significant innovation, or a revolutionary new product, or (d) affects the degree of learning that consumers must engage in to use the product. With a continuous innovation, no new behaviors must be learned. With a dynamically continuous innovation, only minor behaviorial changes are needed. With a discontinuous innovation, consumers must learn entirely new consumption patterns.

LO4  Describe the factors contributing to a new product's or service's success or failure.

A new product or service often fails for these marketing reasons: (a) insignificant points of difference, (b) incomplete market and product definition before product development begins, (c) too little market attractiveness, (d) poor execution of the marketing mix, (e) poor sensitivity to customer needs, (f) serious problems inherent in the product, (g) bad timing, and (h) no economical access to buyers.

LO5  Explain the purposes of each step of the new-product process.

The new-product process consists of seven stages a firm uses to develop a salable good or service: (1) New-product strategy development involves defining the role for the new product within the firm's overall objectives. (2) Idea generation involves developing a pool of concepts from consumers, employees, basic R&D, and competitors to serve as candidates for new products. (3) Screening and evaluation involves evaluating new product ideas to eliminate those that are not feasible from a technical or consumer perspective. (4) Business analysis involves defining the features of the new product, developing the marketing strategy and marketing program to introduce it, and making a financial forecast. (5) 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. (6) Market testing involves exposing actual products to prospective consumers under realistic purchasing conditions to see if they will buy the product. (7) Commercialization involves positioning and launching a product in full-scale production and sales with a specific marketing program.