Lecture Ch 10_BB - What You Should Know… The two factors...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: What You Should Know… The two factors that affect the formation of market segments The criteria used in forming market segments and selecting a target market Ways to segment consumer and organizational markets The different sales forecasting techniques Jade S. DeKinder Chapter 10: Developing New Products and Services Professor Jade DeKinder What You Will Know The four types of consumer goods and the two types of business goods Marketing reasons for new product failures The stages in the new product process Jade S. DeKinder Product Mix The product mix is the number of product lines offered by a company or a strategic business unit. Product Line A product line is a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range. Product Item A product (item) is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value. Stock Keeping Unit (SKU) The stock keeping unit (SKU) is a unique version of the product item (the lowest level of the hierarchy). Jade S. DeKinder Product Item (CD14XX) Stock Keeping Unit (SKU) Jade S. DeKinder Product Line (Power Tools) Jade S. DeKinder Product Mix (Consumer Products) Jade S. DeKinder Classifying Products Type of User Consumer goods Business goods Degree of tangibility Nondurable good Durable good Services Jade S. DeKinder Classifying Goods Differ in terms of: Effort the consumer spends on decision Attributes used in purchase Frequency of purchase Consumer goods Convenience goods Shopping goods Specialty goods Unsought goods Jade S. DeKinder Also known as: “Low Involvement” “High Involvement” Jade S. DeKinder Classifying goods Business goods Production goods: used in the manufacturing process that becomes part of the final product Support goods: assist in producing other goods and services Installations Accessory equipment Supplies Industrial services Jade S. DeKinder What is a New Product? Compared with existing products In legal terms From an organization’s perspective Product line extension, “significant jump”, and “true innovation” Consumer’s perspective Continuous, dynamically continuous, discontinuous innovation Jade S. DeKinder Jade S. DeKinder Marketing Reasons for Failure Insignificant point of difference Incomplete market and product definition before development Protocol Too little market attractiveness Poor execution of the marketing mix Poor product quality or sensitivity to customer needs Bad timing No economic access to buyers Jade S. DeKinder Organizational Reasons for Failure Not listening to “voice of the consumer” Skipping steps in new product process Pushing a poorly conceived product for quick revenue “Groupthink” Not learning from past failures Jade S. DeKinder A simple framework for a new product success “gut check”: “Do consumers/ buyers want it?” Dream projects Pet projects “Can we make/ provide it?” Science projects $$ “Will it make money?” Jade S. DeKinder New Product Process Jade S. DeKinder New Product Process Identify markets SWOT and environmental scan Cross-functional team Jade S. DeKinder New Product Process Jade S. DeKinder Idea Generation Customer and supplier suggestions Employee and co­worker suggestions R&D breakthroughs Competitive products Universities, inventors, and small tech firms Jade S. DeKinder Idea Generation: “Requirements Based” Solve a known problem Logical, serial Advantages Familiar Leads to more “appropriate” ideas (by definition) Also known as… Convergent or vertical thinking Jade S. DeKinder Idea Generation: “Requirements Bound” Create product/concept and then match with problem Advantages: Less constrained by current understanding of and interpretation of requirements Less likely to lead to obvious solutions Leads to more unexpected, novel ideas Also known as… Divergent or lateral thinking Jade S. DeKinder New Product Process Internal approach External approach (concept test) Jade S. DeKinder New Product Process Financial projections Marketing support Jade S. DeKinder New Product Process Manufacturing Lab and consumer tests Jade S. DeKinder New Product Process Test marketing Simulated test markets Jade S. DeKinder New Product Process Slotting fee Failure fee Time to market Positioning Launching- regional rollouts Jade S. DeKinder Exercise: Idea Generation Manipulation Substitution Combination Inversion Elimination Exaggeration Reordering Description Removing one/several elements and changing it/them Adding one or several elements Saying the contrary or adding “no” to one/several elements Removing one or several elements Exaggerating upward or downward one/several elements Changing the order or sequence of one/several elements Jade S. DeKinder ...
View Full Document

Ask a homework question - tutors are online