Textbook Notes (369,072)
Canada (162,366)
MGTA02H3 (363)
Chapter 6

MGTA04 Notes Chapter 6.docx

9 Pages
117 Views

Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird

This preview shows pages 1,2 and half of page 3. Sign up to view the full 9 pages of the document.
Description
Chapter 6: Developing & Promoting Goods & Services - Important to continuously make new products; short profitable life spans - Oracle = product innovation & performance features - Microsoft = lower ratings but low prices - IBM = satisfaction w/ customers - Leader depends on who you value - Impossible to focus on one aspect of the marketing mix w/o others What is a Product? - Product strategy begins w/ understanding product features & benefits - Classification of products consumer & industrial - Most important part of offerings of business = product mix The Value Package - Product features: the qualities, both tangible & intangible, that a company builds into its products - Features must also provide benefits - Value package: product marketed as a bundle of value-adding attributes, including a reasonable cost buyers expect more value at reasonable cost - Most items in the value package are intangibles that add value by providing benefits - Products also include image & reputation (not just visible features/benefits) - Firms compete on basis of enhanced value packages addition of a new service usually pleases customers more than the cost it takes Classifying Goods & Services - 2 groups of buyers: buyers of consumer products & buyers of industrial products Classifying Consumer Products - Convenience goods/services: relatively inexpensive consumer goods/services that are bought & used quickly and regularly, causing consumers to spend little time for them or comparing prices, easy to buy o Ex. milk, newspapers, fastfood - Shopping goods/services: moderately expensive consumer goods/services that are bought infrequently, causing consumers to spend some time comparing prices o Stereos, tires, insurance - Specialty goods/services: very expensive consumer goods/services that are bought rarely, causing consumers to spend a lot of time locating the exact item desired o Wedding gowns, catering for receptions Classifying Industrial Products - Expense items: relatively inexpensive industrial goods consumed rapidly & regularly, within 1 year; goods used directly in production process (ex. bulk loads of tea to make tea bags) - Capital items: expensive, long-lasting industrial goods that are used in producing other goods/services & have a long life, lives of more than 1 year; ex. expensive buildings, accessory equipment (computers, etc.); long-term commitments made; involve decisions by high-level managers 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 - Introduce new products based off of one to reach lots of consumers and meet market demand - Multiple/diversified product lines when companies extend their horizons & see opps outside existing product lines; helps a country grow quickly and offset any slow downs in sales of 1 product line (like back ups) Developing New Products - To survive businesses need new products/constant renewal The Time Frame of New Product Development - Companies face multi-year time horizons & high risks when developing new products - Taking long to develop products or starting then shelving projects - Ex. Bombardier Inc + passenger jets; HDTV was slow to develop broadcasters dont offer HD programming so manufacturers hold back, consumers are slow to buy because of high costs Product Mortality Rates - About 50 new product ideas to make 1 product that makes it to market - A few of products that make it are successful - Good ideas fail as products so many products always hitting the market to compete with; supermarket carries 20-25,000 items at a time - 9/10 new products will fail those with best chances are innovative & have unique benefits Speed to Market - Speed to market: strategy of introducing new products to respond quickly to customer and/or market changes - Establish market leadership by introducing new products 1 st - 3 months late loses 12% of life time profit potential, 6 months late = 33% The 7-Step Development Process 1. Product ideas search for ideas for new products; comes from consumers, sales force, research, devlpmt people, engineering personnel seek ideas & reward those with successful products 2. Screening take out all product ideas that dont fit w/ company abilities, expertise, objectives reps from marketing/engineering/production input 3. Concept Testing companies use market research to solicit customer input to get benefits product should have & price4. Business Analysis develop early comparison of cost VS benefits for proposed product, look at sales & costs projections, will product meet minimum profit goals? 5. Prototype Development produce preliminary version of product, expensive, helps identify potential product problems 6. Product Testing & Test Marketing using info from prototype, begins limited production of item; sell in few places to see if it meets performance requirements, need campaigns, test market to see how consumers respond costly 7. Commercialization w/ positive test-marketing results, company starts full-scale production & marketing of product; delays = competitors Variations in the Process for Services - Steps 2, 3, 4, 6, 7 for services BUT steps 1 & 5 are different - 1. Service ideas define service package o Service package: identification of the tangible & intangible features that define the service & stating service specifications - 5. Service process design instead of prototype development o Service process design: selecting the process, identifying worker requirements & determining facilities requirements so service can be effectively provided o Process selection identifies each step in service; sequence & timing o Worker requirements spe
More Less
Unlock Document

Only pages 1,2 and half of page 3 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit