Chapter 11 Review PDF

1 Iyania Messinga Professor Holmes MK 341 A 26 October 2023 Chapter 11 Review The product mix of an organization must be adjusted to keep up with changes in customer attitudes and preferences, as well as to remain competitive in the market. Line extensions and product modifications are two methods...

1 Iyania Messinga Professor Holmes MK 341 A 26 October 2023 Chapter 11 Review The product mix of an organization must be adjusted to keep up with changes in customer attitudes and preferences, as well as to remain competitive in the market. Line extensions and product modifications are two methods that can be used to improve the product mix. Line extensions are the development of a product closely related to one or more products in the existing product line but designed specifically to meet different customer needs. Product modifications involve changes in one or more characteristics of a product, such as quality, function or aesthetics. These changes can make the product more consistent with customers' desires, resulting in greater satisfaction. For either of these modifications to be successful, the product should have a high-quality brand image and a good fit between the line extension or product modification and its parent. The development of new products is an essential part of a company's growth strategy. It allows a firm to expand its product mix and add depth to its product line. Introducing new products can be expensive and risky, but failing to innovate can be equally risky. New products can be defined in several different ways. An innovative product that has never been sold by any organization is one example. Alternatively, it could be a modified product that already existed, a 2 product that a given firm has not marketed previously, or a product that is brought to one or more markets from another market. Disruptive innovation is a strategy that seeks to identify old technologies that can be used in new ways, or to develop new business models to provide customers with more than they expect from current products in a specific market. This type of innovation can create a new market or reshape an existing one. The development of new products is a key part of any business's growth strategy. It can be expensive and risky, but the rewards of introducing new products can be substantial. Disruptive innovation can provide a firm with a competitive edge, while also creating new markets or reshaping existing ones. Developing a new product requires a series of steps to ensure that it meets the organization's mission, objectives, and resources. The process begins with idea generation and screening, where ideas are evaluated for their potential contribution to the firm's sales, costs, and profits. Concept testing is used to determine potential buyers' reactions to a product idea before investing in research and development. Business analysis is then used to estimate potential sales, costs, and profits. Following that is product development, where the idea is converted into a prototype to test its acceptability. Lastly, test marketing is employed to introduce the product on a limited basis to measure the extent to which potential customers will buy it. This process helps organizations to reduce the risk of product failure, identify weaknesses in the product or other parts of the marketing mix, and experiment with variations in advertising, pricing, and packaging. Test marketing is a strategy used by many companies to assess the potential success of a new product or service. It involves introducing the product to a small segment of the target 3 market and gauging their response. While test marketing can be an effective way to assess the viability of a new product, it can be expensive and vulnerable to interference from competitors. Competitors may try to interfere with test marketing efforts by increasing their own advertising or promotions, lowering prices, offering special incentives, or copying the product in the testing stage and rushing to introduce a similar product. To mitigate these risks, many companies opt for alternative methods, such as simulated test marketing. This involves asking consumers at shopping centers to view an advertisement for a new product, offering them a free sample to take home, and then interviewing them over the phone or through online panels to gather their feedback. Simulated test marketing has several advantages, including greater speed, lower costs, and tighter security. Once test marketing has been completed, the product enters the commercialization phase. At this stage, the company analyzes the results of the test marketing to decide if changes to the marketing mix are needed before launching the product. Decisions around warranties, repairs, and replacement parts must also be made. When introducing a product, the company will usually spend considerable sums for advertising, personal selling, and other types of promotion, as well as on manufacturing and equipment costs. Rather than launching a product nationwide overnight, companies may opt for a rollout strategy, whereby the product is initially introduced in one geographic area and gradually expanded to adjacent areas. This can reduce the risk of introducing a new product, give the company time to establish a distribution system, and allow for fine-tuning of the marketing mix. However, it can also enable competitors to observe what the company is doing and monitor results, making it important for the company to move quickly and seize market opportunities.