YPRIMAR CHAPTER 5: DEVELOPING AND MANAGING GOODS AND SERVICES MANAGING EXISTING PRODUCTS A.

. Line extension development of a product that is closely related to existing products in the line but meets different customer needs B. Product modification change in one or more characteristics of a product Quality modifications changes relating to a products dependability and durability Functional modifications changes affecting a products versatility, effectiveness, convenience or safety Aesthetic modifications changes to the sensory appeal of a product DEVELOPING NEW PRODUCTS New-product development process a seven-phase process for introducing products 1. Idea generation seeking product ideas to achieve objectives 2. Screening choosing the most promising ideas for further review 3. Concept testing seeking potential buyers responses to a product idea 4. Business analysis evaluating the potential contribution of a product idea to the firms sales, costs and profits 5. Product development determining if producing a product is technically feasible and cost effective 6. Test marketing introducing a product on a limited basis to measure the extent to which potential customers will actually buy it 7. Commercialization deciding on full-scale manufacturing and marketing plans and preparing budgets PRODUCT DIFFERENTIATION THROUGH QUALITY, DESIGN, AND SUPPORT SERVICES Product differentiation creating and designing products so that customers perceive them as different from competing products A. Product quality characteristics of a product that allow it to perform as expected in satisfying customer needs Level of quality the amount of quality a product possesses Consistency of quality the degree to which a product has the same level of quality over time B. Product design how a product is conceived, planned, or produced Styling the physical appearance of a product Product features specific design characteristics that allow a product to perform certain tasks C. Customer services or support services human or mechanical efforts or activities a that add value to a product PRODUCT POSITIONING AND REPOSITIONING Product positioning creating and maintaining a certain concept of a product in customers minds Perceptual maps are created by questioning a sample of consumers about their perceptions of products, brands, and organizations with respect to two or more dimensions BASES FOR POSITIONING: A. Use competitors Head-to-head competition Avoiding competition B. Price C. Quality level D. Benefits provided by the product Source: Marketing, 2013 ed. (Ferrell, Hult, & Pride) v3.0 Repositioning may strengthen a brands market share and profitability which can be accomplished by: Physically changing the product Changing the price Changing distribution Changing image through promotional efforts Aiming product at a different target market PRODUCT DELETION Product deletion eliminating a product from the product mix, usually because it no longer satisfies a sufficient number of customers Three basic ways to delete a product: 1. Phase-out allows the product to decline without a change in the marketing strategy; no attempt is made to give the product new life 2. Run-out exploits any strengths left in the product 3. Immediate drop the best strategy when losses are too great to prolong the products life SIX BASIC CHARACTERISTICS OF SERVICES 1. Intangibility a service that is not physically and cannot be touch 2. Inseparability of production and consumption Inseparability being produced and consumed at the same time 3. Perishability the inability of unused service capacity to be stored for future use 4. Heterogeneity variation in quality 5. Client-based relationships interactions that result in satisfied customers who use a service repeatedly over time 6. Customer contact the level of interaction between provider and customer needed to deliver the service CREATING MARKETING MIXES FOR SERVICES A. Development of services Core service is the basic service experience or commodity that a customer expects to receive Supplementary service is a supportive one related to the core service that is used to differentiate the service bundle from that of competitors B. Pricing of services most revenues are brought in during peak demand Peak demand the point in time where some services are very time-sensitive because a significant number of customers desire the service at a particular time C. Distribution of services many firms have changed a high-contact service into a low-contact one D. Promotion of services typically includes tangible cues that symbolize the service ORGANIZING TO DEVELOP AND MANAGE PRODUCTS Product manager the person within an organization responsible for a product, a product line, or several distinct products that make up a group Brand manager the person responsible for a single brand Market manager the person responsible for managing the marketing activities that serve a particular group of customers Venture team a cross-functional group that creates entirely new products that may be aimed at new markets

Prepared by: Acidera, Jaypaul O.