1. Developing a New product Chapter 10

2. Product Anything tangible offered to a market by a business to satisfy needs –Things to consider when developing a product Needs to meet needs and wants of target market Need to do research: focus groups, surveys, etc.

3. Demand Direct demand – individuals or groups who purchase product for personal use Derived demand – Quantity of a product or service needed by a business for its operations

4. New products A brand new product – it is considered new for up to 6 months after it is introduced A new improved product (has to be significantly changed) can be considered new up to 6 months after it is reintroduced

5. Where can you get product ideas? Consumer panels What like about current products, dislike? SalespeopleBrainstorming Creative thinking exercises

6. Types of Goods Convenience Goods –Staple goods: regularly and routinely purchased items such as milk and bread –Impulse goods: Purchase on spur of moment such as candy, magazines, etc. –Emergency goods: As a result of an urgent need such as gas, towing, umbrella

7. Shopping Goods Typically more expensive items such as clothing, cars, homes; you take more time looking before you buy them 1. Attribute based – variety of differences where you consider a number of factors 2. Price based – If products have similar features, you shop for the best price

11. Speciality Goods Products that are so satisfying, you won’t buy anything else –Rolls Royce, Porsche, Rolex watch, favorite jeans, restaurant

12. Unsought Goods Things do not like to have to think about buying but need –Life insurance –Will –Legal services

13. Step 2: Idea Screening Identified market for product? Competition in market reasonable? Have or can obtain resources to produce product? Is product legal or safe? Can we produce quality product at a reasonable price?

14. Step 3: Strategy Development This is where you try to determine your: 1. Product 2. Price 3. Promotion 4. Place

15. Step 4: Financial Analysis Cost of producing product and marketing Sales projection for target market Profits anticipate to make

16. Step 5: Product Development and Testing A. Designing production process B. Get needed equipment and personnel C. Develop a prototype D. Do a test market

17. Step 6: Product marketing Need to have enough product capacity to meet demand when you promote Need to coordinate marketing mix elements for promotion (continuously survey target mkt.

18. Role of marketing in product development The direct link to help the product development team understand what the customer wants –Selling –Promotion –Distribution –Research

19. Marketing Activities Gathering information – market research Study competition, customer’s needs, review product complaints/returns

20. Role of marketing continued Designing strategies – Deciding target market mixes, companies strengths & weaknesses Testing marketing mixes – Reduces # of product failures (test markets, simulations

21. Designing a product Basic product – most important part; need to meet the needs and wants of customer –Bicycle: 2 wheels, handle bars, tire brakes

22. Product Enhanced product – offer different features, attachments, enhancements –Bicycle with different speeds, colors, types of frames, materials Extended product features – services, guarantees, credit, delivery, repair services

23. Product line A group of similar products with slight variations –Variation in quantity: packaged in different quantities but same item –Variation in quality: low to high quality in the same line –Product assortments: Complete set of all products a business offers to its market

24. Product Packaging Two main goals of packaging: offers protection and promotion –Ease of use: consider the way the customer uses the product Style of container – Will it fit in space? Convenient pour spout, no metal for microwavable items, lunchables

25. Product packaging (cont.) Safety – ensure product safety for user –Tamper resistant lids on medicines and poisonous products –Using plastic instead of glass bottles –Pudding lids from metal to plastic

26. Product Packaging (cont.) –Attraction: promotion shows the use of product in attractive way Fancy perfume bottles Fancy boxes/paper –Do you tend to buy products because of the look of the packaging? Is it ethical for marketers to do this?

27. Product Packaging –Handling: How package is designed to help in displaying in store and also for security purposes Hooks Hooks Small items in larger packages (security) Jewelry boxes Security tags

28. Product Packaging (cont.) Environment – using packaging not harmful for the environment –Recyclable materials: aluminum, plastic, etc. –Biodegradable materials –Changing aerosol cans to pump dispensers

29. Information on product label Label is a information tag, wrapper, seal, or imprinted message attached to product Information on label includes: –Type of product (brand name, logo, etc.) –Ingredients –Guarantee –Date and storage information –Instructions for proper use and care –FDA/CFSAN A Food Labeling Guide: Chapter II- -Name of Food FDA/CFSAN A Food Labeling Guide: Chapter II- -Name of FoodFDA/CFSAN A Food Labeling Guide: Chapter II- -Name of Food

30. Labeling laws Must have name and address of manufacturer Must have metric measurements Must have quantity of contents Clearly state amount of calories, fat, carbohydrates, sodium, cholesterol, and protein

31. FDA (Food and Drug Administration) labeling requirements Health warnings if necessary (alcohol and cigarrettes Has to specify if food has been genetically modified

32. Federal Trade Commission Monitors deceptive advertising on labels Requires care labels on clothing Monitors labels that say the package material has recycled content –Ozone safe –Biodegradable –Recyclable

33. Brand development Brand: A name, symbol, word, slogan, or design that identifies a product, service, or company Corporate brands: Coca-Cola, McDonalds and Citibank

34. Brand Name The word, group of words, letters, or numbers representing a brand that can be spoken Examples: PT Cruiser, Mountain Dew, SnackWells

35. Brandmark/Logos

36. Trade Name Identifies the company or division of a particular corporation –Dell, Kellogg’s, and Xerox

37. Trade characters Is a brand mark with human form or characteristics

38. Trademark Trademark – a brand name, brand mark, trade name, or trade character that is given legal protection by the federal government =®

39. Licensed Brand Licensed Brand – Well known name or symbol established by one company and sold for use by another company Example: Disney products, NFL Sesame Street Sesame Street

40. Licensed brand Disney to Limit Character Licensing to 'Healthful' Foods Will Also Reformulate Theme-Park Meals By Ira Teinowitz Published: October 16, 2006 Ira TeinowitzIra Teinowitz WASHINGTON (AdAge.com) -- Walt Disney Co. today said it would limit licensing for most of its characters to food products low in fat and sugar -- a significant move as lawmakers increasingly blame marketers for the childhood-obesity epidemic. Among other things, Disney will ban trans fat products at McDonald's restaurants in its theme parks. | ALSO: Comment on this article in the 'Your Opinion' box below. Disney said its guidelines take effect immediately for licensing deals but will be phased in as existing contracts expire and will apply internationally. That could take awhile: Most Disney licensing deals end by 2008, but a Kellogg Co. deal for cereal has another seven years to run. In addition, Disney Consumer Products has licensing deals with Kellogg's Keebler division, Coca-Cola's Minute Maid and McDonald's for Happy Meals.

41. Product Life Cycle Introduction – 1 st time the new product is introduced. Promotion is focused on informing the customer about the product Costs are usually high during this time because of initial costs Costs are usually high during this time because of initial costs

42. Growth This is when the product is starting to sell well; much of the target market knows about the product and starts buying it; competition starts entering The promotion at this stage is to attract new customers and persuade the existing customers to keep using the product

43. Maturity Stage Sales start leveling off or slowing down Most of target market owns the product Level of competition is very high Company spends more money trying to fight off competition Should product be changed or improved to increase sales?

44. Decline Sales fall Profits may reach a point where they are smaller than costs May decide to quit selling the product May have to reduce price Reduce amount of promotion

45. All of the products that a company makes or sells is called its a. product mix. b. product line. b. product line. c. product items. c. product items. d. limited line. d. limited line.

46. The number of items offered within each product line is the a. product line. a. product line. b. product width. b. product width. c. product depth. c. product depth. d. product item. d. product item.

47. What is one place that new product ideas come from? A. customers. B. employees C. design engineers D. all of the above

48. A reason why a business may decide to delete a line is A. the product is in the maturity stage. B. the sales are leveling off. C. conflict with the company objectives. D. lack of profit E. both c and d

49. One thing to consider when deciding on what product mix to carry is A. the image of the business. B. the market it is trying to reach. C. the business objectives. D. all of these.

50. During what stage of the product life cycle is the costs the highest? A. introduction B. growth C. maturity D. decline

51. During this stage of the product life cycle product sales start leveling off and there is a lot of competition: A. introduction B. growth C. maturity D. decline

52. Lexus promotes their products as luxurious, this is an example of A. product staging B. product selling. C. product positioning. D. product offering.

53. The Jolly Green Giant is an example of a A. brand. B. trade character C. trade mark D. licensed brand

54. “Just do it” is an example of a A. Trade character B. trade name C. slogan D. logo

55. Rockport promotes its shoes as the most comfortable shoes you can wear. This is an example of positioning by A. price and quality. B. features and benefits. C. in relation to the competition. D. in relation to other products in its line.