Exam 2 - Chapter 12 Flashcards
(40 cards)
Managing Existing Products
must be able to adjust products’ features in response to changes in customers’ needs
develop, alter and maintain marketing mix
Line Extensions
the development of a product closely related to existing products in the line but designated specifically to meet different customer needs
increase sales; take market share from competitors
ex: cheerios
Product Modification
changing one or more characteristics of a product
differs from a line extension because original product is dropped from the line
ex: Windows 8
Quality Modifications
changes to a product’s dependability and durability
ex: cars lasting longer
Functional Modifications
changes that affect a product’s versatility, effectiveness, convenience, or safety
ex: camera in cars
Aesthetic Modifications
changes to the sensory appeal of a product
ex: fasion
3 Types of Product Modifications
a. quality
b. functional
c. aesthetic
Developing New Products
enhances a product mix and adds depth to a product line
can be risky and expensive
only about 10% make it
New Product
a. never been sold by any organization/completely new
b. modified product that existed previously
c. product a specific company has not marketed previously but similar products have been available from other companies
d. brought to one or more markets from another market
7 Steps of the New-Product Development Process
a. idea generation
b. screening
c. concept testing
d. business analysis
e. product development
f. test marketing
g. commercialization
New-Product Development Process: Step 1
Idea Generation
the activity of seeking product ideas to achieve organizational objectives
can come from internal departments or franchisees, customers, competitors, advertising agencies, consultants or even outsourcing
**hardest step
New-Product Development Process: Step 2
Screening
check stage - is this product appropriate for our company? does it need work?
**step where most products are rejected
New-Product Development Process: Step 3
Concept Testing
seeking a sample of potential buyers’ responses to a product idea
focus groups/which ideas passed?
New-Product Development Process: Step 4
Business Analysis
involves evaluating the potential impact of a product idea on the firm’s sales, costs, and profits
what effect will this have on our company?
New-Product Development Process: Step 5
Product Development
determining if producing a product is technically feasible and cost effective
can we deliver the product to the consumer at a price where we can expect to make money??
New-Product Development Process: Step 6
Test Marketing
a limited introduction of a product in geographic areas chosen to represent the intended market
**expensive
New-Product Development Process: Step 7
Commercialization
refining and finalizing plans and budgets for full-scale expansion/marketing
Product Differentiation
creating and designing products so customers perceive them as different from competing products
customer perception is critical (quality, design and features, support services)
Level of Quality
the amount of quality a product possesses
too much could lead to over engineering
Consistency of Quality
the degree to which a product has the same level of quality over time
Product Design
how a product is conceived, planned, and produced
Syling
the physical appearance of a product
Product Features
specific design characteristics that allow a product to perform certain tasks
add or subtract to differentiate
Components of a Product
a. core
b. symbols of excellence
c. supplement
