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Chapter 8

Chapter 8 Marketing 100 notes.docx

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Ryerson University
MKT 100
Laila Rohani

Chapter 8 Developing New ProductsIntroductionProduct strategies are central to creation of value for the consumerProduct anything of value to a consumer that can be offered through a marketing exchange Why Do Firms Create New ProductsInnovation process by which ideas are transformed into new products and services that will help firms growIf no innovationcompanies only have 2 choicescontinue to market current products to current customers or take the same product to another market with similar customers Changing Customer NeedsAllows attracting new customers and satisfying the changing needs of current customers by preventing boredom with current products Market SaturationPrices of the product will go down after a while in the marketplace and value of firm will declineInnovating and making new products available brings variety into consumers lives and gets them excited while providing company sustainability Managing Risk Through DiversityInnovation firms often create a broader portfolio of products which helps diversify their risk and enhance firm valueIf some products in portfolio doing poorly others may do wellMay understand markets and consumers with more products in the marketplace Fashion CyclesMany industries have short product life cycles so most sales come from new products Innovation and ValuePioneers new product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market also called breakthroughsPioneer products require higher level of learning from consumers but offer more benefitsThey are first movers first to create market or product category making them readily recognizable to consumers and established a commanding early market share leadPioneers may be very successful but not in all cases Imitators capitalize on their weaknesses They can be pricey and less sophisticated as well so consumers may purchase better and lower priced products later
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