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“ Product Development”

Unit 3. “ Product Development”. What is a Product? Consumer Markets Product Design Process Product Planning Product Mix. Product. A good, service, or idea sold to satisfy wants/needs Can be simple or complex

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“ Product Development”

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  1. Unit 3 “Product Development” What is a Product? Consumer Markets Product Design Process Product Planning Product Mix

  2. Product • A good, service, or idea sold to satisfy wants/needs • Can be simple or complex • Features – physical characteristics of product; used to enhance benefits wanted by consumers • Benefits – the value or usefulness a consumer gets from a product • Consumers know best what they want! Marketers are the “eyes, ears, and mouth” of a company. What does this mean?

  3. How Products are Viewed • by Businesses – tangible items their customers buy • by Consumers – a means of satisfying their wants/needs (it’s durable, attractive, safe, tasty, convenient, etc). • Consumers buy the idea of what that product will do for them. • Consumers decide on a restaurant using factors like menu, taste, speed & quality of service, atmosphere, location, and price.

  4. Business Consumers vs Final Consumers Some products are sold to businesses. Some products are sold to consumers. Some products are sold to BOTH. • Ex: Bananas – restaurant, family lunches What other products can you sell to both businesses and consumers?

  5. Final Consumers – buy products for personal use. • Consumer Market • Convenience Goods • Shopping Goods • Unsought Goods • Specialty Goods

  6. Business Consumers – buy goods to use themselves or to use in the making of other goods/services for resale. • Business Markets • Capital Equipment • Operating Equipment • Supplies • Raw Materials • Component Parts

  7. Product Design Process • Basic product – same as competitors • Enhanced product • Features & Options • Packaging • Image (icon, logo, etc) • Extended product • Services & Warranties • Related items you buy separately **Improvement in design can improve Demand.

  8. Product’s Life Cycle (or its life span) also helps planning  Product Planning Strategy Consider: • Type of competition in marketplace (direct, indirect, intense, nonexistent). • Economic conditions. • Strengths/Weaknesses of own business.

  9. Product Life Cycle

  10. Product Life Cycle

  11. Product Life Cycle Sales & Profits TIme

  12. Influences on the PLC • Keep up with consumer needs (features, etc). • Fashion/trends change

  13. Marketing Supports Product Development • Companies want to build a “bridge” to reach their potential customers: new product development. • Support for this “bridge” comes in 3 forms: • Gathering information to determine wants/needs- (customer surveys & feedback, market research & analysis, etc) • Designing marketing strategies (4Ps) • Testing the strategies before entering marketplace – (prototype, focus groups, limited distribution, etc)

  14. What is “New”? Companies come up with “NEW” products to keep customers satisfied and to help maintain a profit. • New … or Modified/Improved? • Federal TradeCommission regulates use of “new.” • “Entirely new or changed in a noticeable way.” • Six-month time limit Note: ____% of new products fail!!!

  15. Product Mix (Assortment) – the combination and make up of all the products a company has to offer. Includes 3 Parts: Product Mix • Product Line – group of similar product items (soda). • Can expand # of products easily by: • Varying quantity – singles, 12-pak, 1liter, 12 oz, etc • Varying quality – items priced by amount of features & options included; from basic to fully loaded.

  16. 2. Packaging – for what purpose? • Information – identifies product, gives details • Promotion – attractive & attention-getting • Convenience – makes easier to carry and use.

  17. Brand – anything that IDs a product or company. Brand Name – NIKE Brand Mark – Trademark – legal protection of the brand Licensed Brand – well-known name or symbol sold for use on other companies’ products. 3. Branding

  18. Product Mix Strategies • Expansion – adding additional product items or lines; for current or new customers’ sake; beat competition. • Contraction – removal of some items or lines; business decision; losing profitability or lost consumer appeal. • Alteration – make changes to items or lines (style, flavor, packaging, size, pricing, etc). • TradingUp – add a higher priced item or line; enhance company image, attract new target market. • TradingDown – add a lower priced item or line; attract new target market or meet competition.

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