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Section 5.1
Product Design
Product Defined
• Can be tangible or intangible
• Essential component of the marketing mix
• Products can be goods or services
Product Item and Line
• Product Item: Specific model or size of a
• Nike Air Flight Shoe is a product item
– Nike Air athletic shoes are product line
Product Classification
• Consumer Goods: purchased and used by
the ultimate consumer for personal use
• Business Goods: purchased by
organizations for use in their operation
– Depending on the intended use of the product,
the same product could be both a consumer
good and a business good
• Purchase Nike shoes in retail store
– Shoes considered a consumer good
• Retail store buys Nike shoes from outlet
– Shoes considered a business good
– You buy from outlet and they are a consumer
Point of Difference
• Organizations design their products to
make them stand out in the market place
– They need to have a point of difference
• A unique product characteristic or benefit that sets
the product apart from a competitor’s product
• Product planning is crucial to the success of a
Steps in New Product
• Step 1: SWOT Analysis
• Step 2: Idea Generation
– New ideas come from many sources
Research and Development
The competition
Steps in New Product
• Step 3: Screening and Evaluation
– Evaluation and screening of the new product
– Focus Group
• Panel of 6-10 consumers who discuss their opinions about a
topic under the guidance of a moderator
• Moderator asks specific questions to get the panel members
to talk about their ideas and opinions
• Step 4: Business Analysis
– Financial Aspects of making and marketing the
product are assessed
Steps in Product Development
• Step 5: Development
– Development of actual product
– Prototype: the first model of the product
• Companies test its production capabilities to see if the
product can be produced at a reasonable cost
• Step 6: Test Marketing
– Product is tested in the market place.
– Product is offered for sale in a small geographic area
– Marketers test all aspects of the marketing mix during
this step (product, place, price and promotion)
Steps in Product Development
• Step 7: Commercialization
– A process that involves producing and
marketing a new product
– The company offers the product in the
marketplace for sale to the final consumer
– Regional rollouts: involve launching a new
product in certain geographic areas over a set
time period