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 |  Marketing A McGraw Hill and QUT Custom Publication
Developing New Products and Services
Learning ObjectivesChapter 6 - Outline
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
- Understand the ways in which consumer and business goods and services can be classified and marketed.
- Explain the implications of alternative ways of viewing "newness" in new products.
- Analyze the factors contributing to a product's success or failure.
- Recognize and understand the purposes of each step of the new-product process.
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Chapter 6 - Summary
- 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. 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. Consumer goods consist of convenience, shopping, and specialty products. Business goods are for either production or support. By degree of tangibility, products divide into nondurable goods, durable goods, and services.
- There are several ways to define a new product, such as the degree of distinction from existing products, a time base specified by the FTC, a company perspective, or effect on a consumer's usage pattern.
- 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, 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.
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2003 McGraw-Hill Higher Education