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New Products and Services

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Presentation on theme: "New Products and Services"— Presentation transcript:

1 New Products and Services
Chapter 10

2 Product “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.” Tangible- Color, taste Intangible- Healthier or wealthier

3 Products Product item Product line Product mix Nike Air Jordan
Nike shoes Product mix Nike shoes and clothes PL- “A group of products that are closely related because they satisfy a class of needs, are used together, are distributed through the same type of outlets, or fall within a given price range.” Nike: Clothes and shoes Number of product lines

4 Product Classifications
Type of user Consumer goods Business goods Degree of tangibility Durable Nondurable Service

5 Consumer v. Business Goods
Differences based on Effort spent in decision Attributes used in purchase Frequency of purchase

6 Consumer Goods Convenience goods Shopping goods Specialty goods
Unsought goods

7 Business Goods Production goods Support goods Installations
Accessory equipment Supplies Services

8 What is New? Newness compared with Existing Products
Newness in legal terms Newness from company’s perspective Newness from consumers’ perspective

9 Why do New Products Fail?
Insignificant “point of difference” Incomplete market and product definition before development starts Protocol Too little market attentiveness Poor execution of marketing mix Bad timing No economical access to buyers Protocol- Statement before development begins that identifies a well-defined target market, specific customers’ needs, wants, and preferences, and what the product will be and do

10 New Product Process New-product strategy development Idea generation
Screening and evaluation Business analysis Development Market testing Commercialization Process to identify business opportunities and convert them to a salable good or service

11 New-product strategy development
Identify markets and strategic roles Environmental scanning SWOT analysis Defining the role for a new product in terms of the firm’s overall corporate objectives

12 Idea Generation Customer and supplier suggestions
Employee and co-worker suggestions R&D breakthroughs Competitive products Developing concepts as candidates for new products R&D- Costly

13 Screening & Evaluation
Two approaches Internal approach External approach Internal and external evaluations of new-product ideas to eliminate those that warrant no further effort. Internal- Does it meet corporate objectives? Technically feasible? External- Customers. Show drawing Who would use this? What for?

14 Business Analysis Last checkpoint before capital is committed
Look at product and marketing strategy needed to commercialize it What will be effect on current products? Will need new distribution channels? Financial projections

15 Development “Paper into prototype” Testing against standards
Pharmaceutical testing example at Merck

16 Market Testing Company chooses a specific market, based on criteria
Advantages Disadvantages Simulated test markets Exposing product to prospective consumers under realistic conditions to see if they buy Adv-Helps to forecast sales on larger stage; receive input from customers, Disadv- Reveal product/plan to customers; costly

17 Commercialization Positioning and launching a product
Most expensive step Slotting fee Failure fee Sf- Supermarkets require payment to put product on the shelf FF- If sales target is not met, may have to pay failure fee to compensate for sales that area of the shelf did not make.


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