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MGTA02H3 (143)
H Laurence (21)

Chapter 6-Developing and Promoting Goods and Services

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Management (MGT)
H Laurence

Chapter 6: Developing and Promoting Goods and Services What is a Product The Value Package Features - The quality, both tangible and intangible, that a company builds into its products Value Package - Product marketed as a bundle of value-adding attributes, including reasonable cost Classifying Goods and Services Classifying Consumer Products - Convenience GoodsService - Relatively inexpensive consumer goods or services that are bought and used rapidly and regularly, causing consumers to spend little time looking for them or comparing their prices - milk, newspaper, fast food - Shopping GoodsServices - Moderately expensive consumer goods or services that are purchased infrequently, causing consumers to spend more time comparing their prices - Stereos, tires, insurance - Specialty GoodsServices - Very expensive consumer goods or services that are purchased rarely, causing consumers to spend a great deal of time locating the exact item desired - Wedding gowns, catering Classifying Industrial Products - Expense Items - Relatively inexpensive industrial goods that are consumed rapidly and regularly - within a year - Capital Items - Expensive, long-lasting industrial goods that are used in producing other goods or services and have a long life - buildings, factories, fixed equipment The Product Mix Product Mix - The group of products a company has available for sale Product Lines Product Line - A group of similar products intended for a similar group of buyers who will use them in a similar fashion - Companies usually start with 1 product, then makes more similar products to reach out to a bigger audience: Tea, Flavoured tea. - Result - multiple (or diversified) product lines Developing New Products The Time Frame of New Product Development Product Mortality Rates - 1 in 50 product ideas reach the market - average supermarket carries about 20,000 to 25,000 different items - 9 out of 10 new products will fail Speed to Market Speed To Market - Strategy of introducing new products to respond quickly to customer andor market changes - The faster a product moves from lab to market, the more likely it is to survive - Introducing products to market before competitors, allows to establish market leadership The Seven-Step Development Process 1. Product Ideas - can come from consumers, sales force, research and development people, or engineering 2. Screening - attempt to eliminate all product ideas that do not mesh with the firms ability, expertise, or objectives - Representatives from marketing, engineering, and production must have input at this stage 3. Concept Testing - companies use market research to solicit consumersinput - finds benefits, and price level 4. Business Analysis - early comparison of costs versus benefits - preliminary sales projections compared with cost projections from finance and production - to see if product can meet minimum profitability goals
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