Questions and Answers
What is the result of a derived demand?
What defines a Product?
A good, service, or idea that satisfies consumer needs.
What does Product Mix refer to?
The number of product lines offered by a company.
What are the three categories into which Degree of Tangibility divides products?
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What is a Stock-Keeping Unit (SKU)?
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Which of the following types of goods require no new learning by consumers?
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A ______ good is purchased by the ultimate consumer.
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New services differ from product innovation in that they often require customer presence.
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What are the four types of consumer goods?
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What stage involves creating a prototype product and testing it in the lab?
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What does marketing mix include?
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What are organizational problems that can lead to new product failure?
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What is the concept of Open Innovation?
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What indicates that a new product is considered truly revolutionary?
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What is a Failure Fee?
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What can lead to poor execution of the marketing mix?
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Study Notes
Product Definition
- A product can be a good, service, or idea, either tangible or intangible.
- Designed to satisfy consumer needs.
- Exchanged for a unit of value, such as money.
Product Structure
- Product Mix: Total number of product lines a company offers.
- Product Line: A group of closely related products that meet similar consumer needs or are sold to the same customer group.
- Product Item: A specific product within a product line characterized by brand, size, or price.
SKU (Stock-Keeping Unit)
- A unique identification number that helps define an item for ordering and inventory purposes.
Classifying Products
- Government and companies classify products for different reasons.
- Government focuses on industrial activity data.
- Companies aim to develop effective marketing strategies across their range of products.
Product Classification Methods
- Types of User: Differentiates products as consumer goods or business goods.
- Degree of Tangibility: Categorizes products into durable goods, non-durable goods, and services.
Consumer Goods Classification
- Convenience Goods: Frequently purchased with minimal shopping effort (e.g., toothpaste).
- Shopping Goods: Items compared on criteria like price and quality (e.g., electronics).
- Specialty Goods: Unique items consumers specifically seek out (e.g., luxury watches).
- Unsought Goods: Products consumers may not know about or initially want (e.g., insurance).
Business Goods Classification
- Derived Demand: Sales of business goods depend on consumer goods demand.
- Production Goods: Raw materials used in manufacturing.
-
Support Goods: Items aiding in the production of other goods, which include:
- Installations (fixed equipment),
- Accessory equipment (tools),
- Supplies (office products),
- Services (maintenance and advisory).
New Product Definition
- Newness can be viewed relative to existing products, legal standards, and from the company and consumer perspectives.
Levels of Newness
- From Existing Products: Changes in functionality or features.
- Legally: Defined by industry regulations.
- Company Perspective: Ranges from product line extensions to true innovations.
- Consumer Perspective: Includes continuous, dynamically continuous, and discontinuous innovations.
Service Innovation Categories
- Major Service Innovations: New products in undefined markets (e.g., FedEx).
- Major Process Innovations: New delivery methods enhancing current services (e.g., online MBA programs).
- Supplementary Services: Added elements to core services (e.g., valet services).
Reasons for New Product Failures
- Poor differentiation, lack of proper market research, insufficient market attractiveness, execution failure, and timing issues.
New Product Process
- Stage 1: New Product Strategy: Establishes innovation goals and guidelines.
- Stage 2: Idea Generation: Involves brainstorming and suggestions from various stakeholders.
- Stage 3: Screening & Evaluation: Filters viable ideas through criteria and concept tests.
- Stage 4: Business Analysis: Evaluates the proposed product's alignment with company goals and forecasts financial outcomes.
- Stage 5: Development: Prototyping and testing.
- Stage 6: Market Testing: Limited-scale testing to gauge consumer reaction.
- Stage 7: Commercialization: Full-scale launch, involving strategic positioning and managing production costs.
Market Testing Techniques
- Test marketing, stimulated test markets, and virtual reality testing offer varied approaches to assess market readiness.
Crowd Sourcing & Open Innovation
- Crowd sourcing collects insights from the public to enhance product ideas.
- Open innovation encourages collaboration with external parties such as universities and small tech firms for creative product development.
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Description
Test your knowledge on key concepts from Chapter 10 of Marketing, focusing on the development of new products and services. This quiz includes essential terms and their definitions, helping you understand the product mix and product line. Perfect for students looking to reinforce their learning.
