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Chapter 5

Chapter 5. Product Development. Product Development. Fulfilling consumers wants/needs Conducting market research Can we produce it? Production/design teams Can we sell it? Marketing department. Product Development.

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Chapter 5

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  1. Chapter 5 Product Development

  2. Product Development • Fulfilling consumers wants/needs • Conducting market research • Can we produce it? Production/design teams • Can we sell it? Marketing department

  3. Product Development • Marketers use the production data(Product) to develop a pricing strategy (Price), then they research the competitive market to develop positioning strategies, distribution channels (Place) and promotional plans (Promotion) that will eventually make up the marketing mix for the new product.

  4. Product Development • Cost-benefit analysis: a comparison of the estimated costs of an action with the estimated benefits it is likely to produce. • Feasibility Study: a study to determine if any business opportunity is possible, practical and viable. • Invention: new devices, methods or processes developed from study and experimentation • Innovation: a product/service that uses new technology, items, processes to change/improve existing products

  5. Canadian Inventions • Basketball • Pacemaker • Hockey • IMAX technology • Insulin • Kerosene • Pablum • Snowmobile • Telephone • toboggan According to a marketing study, roughly 10 out of 11 new product ideas are not commercially successful!

  6. Stages of Product Development • Idea generation • Idea screening • Concept development • Market strategy • Feasibility study • Product design • Test marketing • Market entry • *Page 175 – follow through

  7. Product Development & Utility • Product development provides new/different value to a product/service. It influences the value equation by adding utility to an item. • Form utility is the relationship between a product/service’s form and its function. Form is the product’s “look” or the service it provides. Function is what the product/service is intended to do (Pen  writes). Usually form follows function! • Also includes material, scent, flavour, colour, design and packaging

  8. Product Development & Utility • Information utility provides consumers with instructions, directions and user manuals (hotlines, advertising etc.) • Place utility makes it possible for the consumer to purchase the product – easier it is to find, the more utility it has (e-bay) • Time utility – it is available when the consumer wants it (auto shop – 24 hours) • Possession utility – easy to purchase; Rolex does not have this, mfg.  retailers, net terms, Leons • Finish reading pgs. 191-197, end of Chapter 5

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