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AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Recognize the various terms that pertain to products and services. 2. Identify the ways in which consumer and business goods and services can be classified.
3. Explain the significance of newness in new products and services as it relates to the degree of consumer learning involved.
Copyright 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 10-2
AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 4. Describe the factors contributing a new products or services success or failure. 5. Explain the purposes of each step of the new-product process.
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3MS NEW GREPTILE GRIP GOLF GLOVE: HOW TO GET TO THE TOP OF THE LEADER BOARD
The Product?
The Target Market? The Special Marketing Task?
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Product Mix
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Little Remedies
How does an extensive product line benefit both consumers and retailers?
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Degree of Tangibility
Nondurable Good Durable Good Services
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Inconsistency
Inseparability
Inventory
Idle Production Capacity
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FIGURE 10-1 Importance of services in the U.S. gross domestic product (GDP)
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Classifying Services
Delivery by People or Equipment Profit or Nonprofit Organizations Government Sponsored
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Concept Check
1. Explain the difference between product mix and product line. A: The product mix is the number of product lines
offered by a company. 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.
Copyright 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 10-17
Concept Check
2. What are the four main types of consumer goods? A: convenience, shopping, specialty, and unsought
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Concept Check
3. What are three ways to classify services? A: (1) delivered by people or equipment, (2) profit or nonprofit, and (3) government sponsored or not
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PS3
Copyright 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Xbox
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FIGURE 10-3 Product newness, as defined by the degree of consumer learning needed to use the product
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FIGURE 10-D What it takes to launch one commercially successful new product
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Too Little Market Attractiveness Poor Execution of the Marketing Mix: Name, Price, Promotion, and Distribution
Copyright 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 10-27
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Concept Check
1. From a consumers viewpoint, what kind of innovation would an improved electric toothbrush be?
A: continuous innovation
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Concept Check
2. What does insignificant point of difference mean as a reason for new-product failure?
A: The product must have superior characteristics that deliver unique benefits to the user compared to those of competitors.
Copyright 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 10-32
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Volvos YCC
How are new-product ideas generated?
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Concept Check
1. What are the seven stages in the newproduct process? A: These are: (1) new-product strategy development; (2) idea generation; (3) screening and evaluation; (4) business analysis; (5) development; (6) market testing; and (7) commercialization.
Copyright 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 10-40
Concept Check
2. What are main sources of newproduct ideas? A: Customer and supplier suggestions, employee suggestions, R&D breakthroughs, and competitive products.
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Pillsbury
What synergies, segments, or partners?
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Mattels Barbie
Why should laboratory and safety tests be done?
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FIGURE 10-6 Six important U.S. test markets and the demographics winner: Wichita Falls, Texas, metropolitan statistical area
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Fast Prototyping
FIGURE 10-7 Marketing information and methods used in the new-product process
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Concept Check
1. How does the development stage of the new-product process involve testing the product inside and outside the firm?
A: Internally, laboratory tests are done to see if the product achieves physical, quality, and safety standards; externally, consumer tests are done.
Copyright 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 10-52
Concept Check
Concept Check
3. What is commercialization of a new product? A: Commercialization involves positioning and launching a new product in full-scale production and sales and is the most expensive stage for most new products.
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GOING ONLINE
JALAPEO SODA, ANYONE?
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Going Online
1. Access the NewProductWorks website. Study the Hits and Misses categories: We Expect Them to be Successes, Jury is Out, Failures, and Favorite Failures. Pick two of the failed products and identify the reasons that led to their failure.
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Going Online
2. Contrast these failed products with those that are deemed successes to learn why they became sure-fire winners.
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VIDEO CASE 10
3M GREPTILE GRIP GOLF GLOVE: GREAT GRIPPING!
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VIDEO CASE 10
3M
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VIDEO CASE 10
3M
1. What are the characteristics of the target market for the 3M Greptile Grip golf glove?
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VIDEO CASE 10
3M
2. What are the key points of difference of the 3M Greptile Grip golf glove when compared to competitors products, such as FootJoy and Nike? Substitute products, such as golf grips?
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VIDEO CASE 10
3M
3. How does the Greptile Grip golf glove meet 3Ms three criteria for new products?
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VIDEO CASE 10
3M
4. Since 3M has no prior products for the golf market, what special promotion and distribution problems might 3M have?
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VIDEO CASE 10
3M
5.
How would you rate the 3M Greptile Grip golf glove on the following reasons for success and failure: (a) significant points of difference; (b) size and growth of the golf market; (c) product quality; (d) market timing; (e) execution of the marketing mix; (f) synergy or fit with 3Ms R&D, manufacturing and/or marketing capabilities; and (g) access to consumers?
Copyright 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved.
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FIGURE 10-C Why new-product development can be a dice roll: some forecasts
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3M New-Product Idea
Ultrathon Insect Repellent
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Product
A product 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.
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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.
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Product Mix
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Consumer Goods
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Business Goods
Business goods are products that assist directly or indirectly in providing products for resale. Also called as B2B goods, industrial goods, or organizational goods.
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Services
Services are intangible activities or benefits that an organization provides to consumers in exchange for money or something else of value.
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Idle production capacity occurs when the service provider is available but there is no demand.
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New-Product Process
The new-product process consists of seven stages a firm goes through to identify business opportunities and convert them to a salable good or service.
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