Download the PowerPoints

Develop a New Product
Marketing
Chapter 10
What is a Product


Anything tangible offered to a market
by businesses to satisfy needs
Products are more than an item
• Businesses need to consider consumer
wants and needs
Consumers know best

Businesses believe they know what the
consumers need
• Big mistake

Consumers will show businesses what
they want/need with what they will buy
Product Development

What is the failure rate of new products?

Why….
• 50%
• Products do not meet consumer needs or
are not superior to competing products
The Role of Marketing



Gather information
•
Marketing research
Designing Strategies
•
•
•
•
Identifying target markets
Determining company strengths
Evaluating market positions
Suggesting alternative marketing mixes
Testing Marketing Mixes
•
•
Focus groups
Consumer Panels
Designing a Product



Basic Product
•
•
Most important part of product
Simplest form of product
Enhanced Product
•
Features and options added to basic product to meet
several consumer needs
Extended Product
•
•
Services, guarantees, information on effective use of
the product
Even additional products that improve the use of the
product
Positioning for Competitive
Advantage

Market Position
• Unique image of a product in a consumer’s
mind
Bases for Positioning

Attribute

Price and Quality
• Highlighting a product feature
• May indicate a high price as a sign of quality
or low price as a sign of value

Use or Application
• Stressing a unique use or application for a
product
Bases for Positioning



Product User
•
encourages use of a product or service by associating a
personality or type of user with the product
Product Classification
•
Associate the product with a particular category of
products
Competitor
•
Demonstrating how they are against the competition
Warm-Up

Why does developing even a simple
product like a toothbrush involve so
many decisions?
Product Mix Components

Product Line
• Group of similar products with slight variations
•
in the marketing mix to satisfy different needs
in a market.
Variation in Quantity
• Different package size or quantity
• Variation in Quality
• Adding features to the basic product
Product Mix Components

Assortments
• Complete set of all products a business offers
to its market
Packaging

Serves as a dual purpose

Improves product
• Protection and promotion
• Example: pour spouts, resealable liners
Packaging

Ease of Use
• Must carefully consider how a consumer will
use the product

Safety
• Safety and protection important concerns,
•
especially when product is used by children
Fragile products need packaging to protect
during display and shipping
Packaging

Attraction
• Conveying a certain image
• Attracting a buyer based on the enticing
package

Handling
• Display and security
Packaging

Environment
• Type and quantity of materials used
Brand Development


Brand
•
Name, symbol, word, or design that
identifies a product
Trademark
•
Legal protection of the words or symbols
used by one company
Brand Development

Licensed Brand
•
Well known name or symbol established by one
company and sold for use by another company
to promote its products
Brand Development

Levels of Brand Recognition
• Non recognition
• Unable to identify brand
• Rejection
• Will not purchase because of the brand
• Recognition
• Recall the brand; little influence
Brand Development

Levels of Brand Recognition
• Preference
• View brand as valuable and choose it if available
• Insistence
• Reject other brands
Selecting Target Markets
A target market is a clearly identified
segment of the market to which the
company wants to appeal.
Buying Motives

Reasons you buy:
• Emotional motives
Based on feelings, beliefs or attitudes
• Rational motives
Based on facts or logic
• Patronage motives
Based on loyalty
Influences on Decision Making

Personality

Social Class
• Well defined enduring pattern of behavior
• Lifestyle, values and beliefs common to a
group of people
Influences on Decision Making

Cultural Environment
• Set of beliefs or attitudes that are passed on
from one generation to another

Reference Groups
• Organizations from which you take your
values and attitudes
Types of Decision Making

Routine Decision-Making
• Purchases made frequently and do not
require much thought

Limited Decision-Making
• Takes more time and is often used with more
expensive products or products purchased
less frequently
Types of Decision Making

Extensive Decision-Making
• Goes through all five steps of the decision
making process
Types of Competition

Direct
• competition in a market segment with
businesses that offer the same type of
product or service

Indirect
• when a business competes with a product
that is outside its classification group
Selecting Target Markets
A target market is a clearly identified
segment of the market to which the
company wants to appeal.
Types of Competition

Price Competition
• rivalry among businesses based on price and
value

Non-Price Competition
• focuses on non price factors of its product
such as quality, location, service, etc.
Using Life Cycle Analysis
Three factors to consider when planning a
marketing mix:
 the type of competition
 the purchase behavior of consumers
 the strengths and weaknesses of the
business
Stages in a Life Cycle
SALES
PROFITS
Introduction
Growth
Maturity
Decline
Stages of a Product Life Cycle

Introduction
First Stage; little or no competition
Basic product; Higher prices; promotions to target
market; widely distributed

Growth
Sales are growing; competition emerges
New features; more distribution
(wholesalers/retailers); range of prices (emphasize
value); more money spent on promotion
Stages of a Product Life Cycle

Maturity
Sales peak and profit begins to decline
Intense competition;

Growth
Sales are growing; competition emerges
New features; more distribution
(wholesalers/retailers); range of prices (emphasize
value); more money spent on promotion
Purchase Classifications

Convenience Goods
• Staple goods
• Products you buy that are regular routine
purchases
• Impulse Goods
• Purchase on spur of the moment with out advance
planning
• Emergency Goods
• Products purchased as a result of an urgent need
Purchase Classifications

Shopping Goods
• Attribute-based goods
• Consumers see a number of factors to determine
best value
• Basing purchase on many things such as features,
service, price, use of credit
• Price-based goods
• Consumers see products basically alike
• Basing purchase on price
Product Classification

Specialty Goods
• Consumers will not substitute or buy product
from any other business or brand
• Strong brand loyalty
• Not just expensive items, but items you regularly
buy…
• Factors determining specialty goods
• Importance in satisfying need
• Willingness of customer to delay purchase until
specific product/brand is located
Product Classification

Unsought Goods
• Products consumers do not want to buy