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24 Cards in this Set
- Front
- Back
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line extensions
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development of a product that is closely related to existing products in the line but is designed specifically to meet different customer needs
more common than new products because they are less expensive, lower risk alternative for increasing sales may focus on different market segment or be an attempt to increase sales within the same market segment used to take market share from its competitors one side effect is that it may result in a more negative evaluation of the core product |
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product modifications
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changes in one or more characteristics of a product
differs from a line extension in that the original product does not remain in the line product modifications entail less risk than developing new products conditions to modify: -must be modifiable -customer must perceive that a modification has been made -should make the product more consistent with customers desires so it provides greater satisfaction three major ways to modify products: -quality modifications -functional modifications -aesthetic modifications |
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quality modifications
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changes relating to a products dependability
executed by altering the materials or the production process |
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functional modifications
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changes affecting a products versatility, effectiveness, convenience, or safety
redesign of the product |
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aesthetic modifications
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changes relating to the sensory appeal of a product
fashion industry relies heavily on aesthetic modifications also an attempt to minimize the amount of illegal product counterfeiting that occurs through constant change in design and quality drawback: consumers determine their value subjectively |
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product line extensions
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line extensions
product modification |
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new product development process
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idea generation
screening concept testing business analysis product development test marketing commercialization |
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idea generation
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seeking product ideas to achieve organizational objectives
heart of innovation is a purposeful focused effort to identify new ways to serve a market can come from several sources -internal sources brainstorming and incentives or rewards for good ideas are typical intra-firm devices for stimulating development of ideas -external sources when outsourcing new product development activities to outside organizations, the best results are achieved from spelling out the specific tasks with detailed contractual specifications ask the customer what they want |
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screening
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selecting the ideas with the greatest potential for further review
keeping the product idea in focus and on track by understanding consumer needs and wants is the key to success. be aware of possible environmental changes checklist reduce the chances of overlooking some pertinent fact most new ideas are rejected in this phase |
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concept testing
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seeking a sample of potential buyers' responses to a product idea
helps product development personnel better understand which product attributes and benefits are most important to potential customers |
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business analysis
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evaluating the potential impact of a product idea on the firms sales, costs, and profits
firms seek market information to estimate potential sales, costs, and profits forecasting sales for product ideas is difficult, so break even analysis and payback analysis are used -not particularly precise during this stage |
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product development
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determining if producing a product is technically feasible
convert idea into a prototype how much quality to build into the product? lengthy and expensive phase, therefor few ideas are put into development |
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test marketing
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a limited introduction of a product in geographic areas chosen to represent the intended market
sample launching of the entire marketing mix selection of appropriate test areas is very important because they provide accurate representation of the intended markets |
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disadvantages of test marketing
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-undercutting already profitable products and should the new product fail, loss of credibility
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advantages of test marketing
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-measure its sales performance
-identify weakness -experiment with variations in advertising, pricing, and packaging in different test areas and to measure the extent of brand awareness, brand switching, and repeated purchases resulting from altered marketing mix |
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commercialization
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refining and finalizing plans and budgets for full-scale manufacturing and marketing of a product
make decisions about warranties, repairs, and replacement parts introduced through a process called roll-out disadvantage: gradual introduction allows competitors to observe what you are doing and they may quickly enter the same target market with similar products |
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product differentiation
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creating and designing products so that customers perceive them as different from competing products
used to differentiate one product from another brand 3 aspects of product differentiation product quality product design and features product support services |
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quality
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the overall characteristics of a product that allow it to perform as expected in satisfying customer needs
level of quality -the amount of quality a product possess consistency of quality -the degree to which a product has the same level of quality over time |
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design and features
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how a product is conceived, planned, and produced
styling -the physical appearance of the product product features -specific design characteristics allow a product to perform certain tasks |
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Product support services (customer service)
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human or mechanical efforts or activities that add value to a product
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product deletion
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eliminating a product from the product mix when it no longer satisfies a sufficient number of customers
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phase out
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decline without a change in the marketing strategy; no attempt is made to give the product new life
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run out
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exploits any strengths left in the product
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immediate drop
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best strategy when losses are too great to prolong the product's life
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