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

2. Product Development

3. business opportunities
Product Development
market research 
customer wants
business opportunities
businesses decide whether or not to provide product/service to satisfy customers’ wants/needs
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4. 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
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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)
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6. Product Development & Utility
Form Utility
a relationship between the product’s form and function
form - what it looks like
function - what it should do
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7. Product Development & Utility
Form Utility
form follows function—what the product does dictates what it looks like
innovations in production and technology effect form
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8. Product Development & Utility
Form Utility
can add value by making a product more attractive
also takes into consideration material, scent, flavour, colour, design, packaging
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9. 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
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10. 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
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11. Product Development & Utility
Time Utility
Providing product or service when the consumer wants it
examples: internet shopping and banking, 24 hour stores, extended hours
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12. 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.
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13. Product Development & Utility
Tell me one thing about one of the utilities:
form utility
information utility
place utility
time utility
possession utility
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14. Product Development and the Marketing Concept

15. Prod. Dev’ment & the Mktg Concept
Marketing Concept:
consumers and competitors should be considered in every important business decision.
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16. 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
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17. 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
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18. 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
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19. 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
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20. Put into correct order…
Concept development Product design Market entry Idea generation Market strategy Test marketing Feasibility study Idea screening
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21. Prod. Dev’ment & the Mktg Concept
Marketing Opportunity Analysis
also called situational analysis
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22. Prod. Dev’ment & the Mktg Concept
Part I: Overall Market
identify category
broad, includes every type of product in the category
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23. 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
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24. 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
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25. 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
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26. Prod. Dev’ment & the Mktg Concept
MP = N x P x Q
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27. 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:
Market potential: $2,250,000
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28. 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:
Market potential: $100,000,000
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29. 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:
Market potential: $512,000
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30. 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.
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31. 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.
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