Chapter 9
Products
By Boundless
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A product is any good, service, or idea that can be offered to a market to satisfy a want or need.
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The core benefit is what consumers feel they are getting when they purchase a product.
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The features and attributes of a product are integral to the product design process, which in turn assists in the creation of new products.
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A consumer product is any tangible product for sale that is used by a person or household for non-business purposes.
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Convenience goods are those that require little effort on the part of the buyer, while shopping goods require research and comparison.
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Specialty goods are those considered unique by the buyer, who will go to great lengths to get them.
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An unsought good is one that is not actively sought out by a consumer, but is instead purchased due to fear, precaution, need, etc.
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Business products are sold to other businesses, as opposed to convenience, shopping, and specialty products, which are sold to consumers.
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Marketers must often make product adjustments in order to keep the product competitive and continue to provide satisfaction to the buyer.
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The breadth of the product mix consists of all the product lines that the company has to offer to its customers.
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Companies employ different strategies to expand their product line depth, which refers to the number of products in a specific product line.
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By productizing a service it can be managed more like a product and various product lines can be created.
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Every product goes through the various life cycle phases of introduction, growth, maturity and decline.
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During the growth stage, the public becomes more aware of the product; as sales and revenues start to increase, profits begin to accrue.
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During the maturity stage, sales will peak as the product reaches market saturation, and competition will grow increasingly fierce.
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During decline, sales growth becomes negative, profits decline, competition remains high, and the product ultimately reaches its 'death'.
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Product life cycles are a useful guide to lifetime sales and profits, and can help marketers understand what strategies to deploy & when.
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The stage of the life cycle of the product affects how it is marketed.
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In dynamic markets companies must constantly introduce new products and services to keep up with changing consumer wants and needs.
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A good NPDS can help organize research, prioritize customer needs, and reduce cost overruns, to ensure a smooth development process.
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The success of product-driven companies is directly tied to new product development, which is generated through innovative ideas.
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During screening, the company evaluates whether to devote further resources to the development of a product at various stage gates.
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Concept testing is important for evaluating consumer responses to a product before market introduction.
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The output of the business analysis stage is a prediction about whether the product is likely to be profitable or not if ultimately produced.
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Development involves setting product specifications as well as testing the product with intended customer groups to gauge their reaction.
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Test marketing is the final stage before commercialization, and is where all the elements of the marketing plan are tested.
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Commercialization the process of launching a new product; it may involve heavy promotion and filling the distribution networks with the product.
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Marketers must learn from their own previous failures, and others' failures, to ensure that they are successful for the next product launch.
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Consumers place a value on quality; therefore high quality products may be able to win share and/or command a price premium.
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Premium features and design may help differentiate a product to earn it share or a price premium in the marketplace.
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Excellent customer service can help differentiate a product or brand and may lead to increased brand loyalty over time.
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Product deletion, either through product replacement or product elimination, results when products fail to meet company expectations.
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Product development combined with product marketing make up the product management function within an organization.
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The diffusion of innovation theory seeks to explain how, why, and at what rate new ideas and technology spread through cultures.
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The rate of adoption is defined as the relative speed with which members of a social system adopt an innovation.
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The stages of adopters for the diffusion of innovation include knowledge, persuasion, decision, implementation, and confirmation.
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In applying the diffusion of innovation theory, it is important to understand potential adopters and their decision-making process.
- Branding
- Packaging