Students will know: How customers view products How marketers keep a consumer focus during product development The parts of the product mix element The three steps of the product design process The importance of product lines, packaging, and brand development Consumer markets and what is meant by direct demand The importance of the business product classification system What businesses mean by “new” products The six steps in new product development
How customers view products Concerned about their needs View products as a way to satisfy these needs The physical characteristics of a product are important Durable, attractive, and safe A customer’s need vary Variety, quality, service, location, price, etc.
How marketers keep a consumer focus during product development Gather Information Evaluating marketing study Interpreting results to assist in product planning Keeps focus on consumer needs Design Strategies Identify target market Determining company strengths and weaknesses Evaluating existing and potential competitors Conduct Marketing Tests Determine whether if a new product will be successful Reduce project failures
The parts of the product mix element Offering choices Variations Offering a guarantee Persuade customers to switch products Testimonial Recommendations
The three steps of the product design process Basic Product Simplest form Easily identified and used Similar to competition Modifications and Improvements Features and options Changes the basic product Increases satisfaction Services and complementary products Services, guarantees, information on effective use of the product, and additional products that improve the use of the primary product Meet additional customer needs Improve customer satisfaction
The importance of product lines Product line A group of similar products with slight variations in the product mix to satisfy different needs in a market. Variation in Quantity Expanding from one product to many products. Having more choices for customers Variation in Quality Adding features to basic products may produce several levels of product choices that vary in quality Basic products may be lower in price Having a featured product may increase in price. Product Assortments The complete set of all products a business offers to its market.
Importance of Packaging Dual purpose of protection and promotion Improves the use of the products Solve customer problems related to the use of the product Safety and Protection Attractive Convey an image
Importance of Brand Development Name, symbol, word, or design Provides a unique identification for the company Part of the purchase decision Gain customer recognition Increase likelihood of a sale Convey a particular image that can be recalled
Consumer markets and what is meant by direct demand Consumer Market Individuals or socially related groups who purchase products for personal consumption Direct Demand The quantity of a product or service to meet the needs of the customers The demand for consumer products.
The importance of the business product classification system Capital Equipment Land, buildings, and major pieces of equipment. Most expensive and most important products purchased. Meet specific needs in order to operate successfully. Operating Equipment Tools, small machines, and furniture. Makes production and operations efficient and effective. Supplies Paper, pencils, paper clips, cleaning supplies, and parts for equipment repair. Can include minor and major expenses for company. Standardized
The importance of the business product classification system (con’t) Raw Materials Components used to produce a companies products. Adequate supply and equal quality of production. Component Parts Parts of a businesses products that have been partially or totally produced by another company. For example: computer manufacturer buys computer chips from another company.. Designed for needs of one company
What businesses mean by “new” products Changes and improvements to an existing product Products that are new to a particular market A product can be called new for only six months after the introduction or change of a product A new use for a product can be discovered
The six steps in new product development Idea Development Ideas for new products Consumer Problems Creative Process Idea Screening Evaluate Ideas Select those that have the greatest chance for success Develop criteria Strategy Development Create and test a sample marketing strategy Clearly identify an appropriate target market and ensure that customers exist with the need and money for the product
The six steps in new product development (cont.) Financial Analysis Costs of production and marketing, sales projections for the target market, and resulting profits are calculated Product Development and Testing Design the product process Obtain needed equipment and materials Training personnel Product Marketing Full scale introduction into the market
Key Terms Product Anything tangible offered to a market by a business to satisfy needs Product line A group of similar products with slight variations in the product mix to satisfy different needs in a market Product assortment The complete set of all products a business offers to its market Trademark The legal protection of the words or symbols for use by a company Licensed Brand A well-known name or symbol established by one company and sold for use by another company to promote its products
Key Terms Cont. Consumer Markets Individuals or socially related groups who purchase products for personal consumption Direct Demand The quantity of a product or service needed to meet the needs of the consumer Business Markets Companies and organizations that purchase products for the operation of a business or the completion of a business activity Derived Demand The quantity of a product or service needed by a business in order to operate at a level that will meet the demand of its customers New Product A product that is entirely new or changed in an important and noticeable way