In your opinion, what was the most important product ever invented? Why?

Product Development

business opportunities Product Development market research  customer wants business opportunities businesses decide whether or not to provide product/service to satisfy customers’ wants/needs BMI3C Unit 5

Product Development & Utility what is added to the product to make it more valuable affects the value equation by providing the customer with something they didn’t have before BMI3C Unit 5

Product Development & Utility could be: benefit (ie. easier to use) difference (ie. new flavour) information on use (ie. baking soda not just for baking) BMI3C Unit 5

Product Development & Utility Form Utility a relationship between the product’s form and function form - what it looks like function - what it should do BMI3C Unit 5

Product Development & Utility Form Utility form follows function—what the product does dictates what it looks like innovations in production and technology effect form BMI3C Unit 5

Product Development & Utility Form Utility can add value by making a product more attractive also takes into consideration material, scent, flavour, colour, design, packaging BMI3C Unit 5

Product Development & Utility Information Utility provide the consumer with instructions, directions, manuals examples: service reps, internet sites, 24-hour hotlines also provided through advertising, on packaging BMI3C Unit 5

Product Development & Utility Place Utility putting the product where the consumer can purchase it the easier, the more place utility examples: web sites with on-line ordering, home delivery BMI3C Unit 5

Product Development & Utility Time Utility Providing product or service when the consumer wants it examples: internet shopping and banking, 24 hour stores, extended hours BMI3C Unit 5

Product Development & Utility Possession Utility making it easy for the consumer to purchase the product examples: installment payment plans, credit cards, discounts on cash purchases, loans, lower costs, etc. BMI3C Unit 5

Product Development & Utility Tell me one thing about one of the utilities: form utility information utility place utility time utility possession utility BMI3C Unit 5

Product Development and the Marketing Concept

Prod. Dev’ment & the Mktg Concept Marketing Concept: consumers and competitors should be considered in every important business decision. BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept Product Mapping marketer will research: what is already on the market what do consumers like/dislike about products what is missing from the market BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept Process Consumers group items by factors using their perception place products on product map See chart on page 193 ask consumers about importance of factors BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept if there is a void in factors, or product is lacking, the manufacturer may improve that process is not important to show what the product is, it’s used to show what it’s not goal: find what the product lacks, innovate and improve it BMI3C Unit 5

Product Mapping Crush Orange Store OJ RealJuice unhealthy healthy sweet not sweet inexpensive expensive Crush Orange Store OJ RealJuice Crush Orange RealJuice Store OJ Crush Orange Store OJ RealJuice BMI3C Unit 5

Put into correct order… Concept development Product design Market entry Idea generation Market strategy Test marketing Feasibility study Idea screening 3 6 8 1 4 7 5 2 BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept Marketing Opportunity Analysis also called situational analysis BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept Part I: Overall Market identify category broad, includes every type of product in the category BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept Part II: Indirect competition group competitive brands by features classifications are further simplified to create direct and indirect competition categories only addressed after all direct competition opportunities exhausted BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept Part III: Direct competition identify competitive brands which compete for the same market examine for gaps, identify if the market is not big enough for another brand an opportunity BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept decide whether or not to enter a market based on market potential. Overall market potential = number of possible buyers times average price of product times number bought per year BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept MP = N x P x Q BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept MP = N x P x Q MP for potato chips in Cambridge Number of customers: 30,000 Avg price of product: 1.50 Avg quantity bought/year: 50 Market potential: $2,250,000 BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept MP = N x P x Q MP for hockey sticks in Canada Number of customers: 2,000,000 Avg price of product: 50.00 Avg quantity bought/year: 1 Market potential: $100,000,000 BMI3C Unit 5

Prod. Dev’ment & the Mktg Concept MP = N x P x Q MP for Adam’s uniform Number of customers: 1,600 Avg price of product: 40.00 Avg quantity bought/year: 8 Market potential: $512,000 BMI3C Unit 5

Benefit Analysis Along with adding utility, a feature should create a benefit. Products need to satisfy consumer needs/wants and add to the value equation. A feature-benefit analysis connects each factor to the utility and benefit created for the consumer. BMI3C Unit 5

Benefit Analysis Once this is completed, the data can be used in a cost-benefit analysis: estimated cost of feature in comparison to the benefit it gives. BMI3C Unit 5