1. product ideas. product development begins with a search for ideas for new products
2. screening. an attempt to eliminate all product ideas that do not mesh with the ﬁrm’s abilities,
expertise or objectives
3. concept testing. after ideas been pulled, consumers inputs are retrieved thru market research
4. business analysis. developing an early comparison of costs vs beneﬁts of product, to predict
whether the product can meet minimum proﬁtability goals
5. prototype development. product ideas begin to take shape. requires input from specialists, can
6. product testing and test marketing. using what is learned from 5, begins limited production of
product, then tested internally to see if it meets performance (if does, goes on sale @ limited
areas) very costly stage, but useful.
7. commercialization. if test-marketing results are positive, company begins full-scale production
and marketing of product @ many areas. usually follows 6 right after to prevent competitoros
from bringing their own version of product.
Variations in the Process for Services
-there are important differences in steps 1 and 5
1. service ideas.
- service package: identiﬁcation of the tangible and intangible features that deﬁne the service
5. service process design.
-service process design: selecting the process, identifying worker requirements, and
determining facilities requirements so that the service can be effectively provided
THE PRODUCT LIFE CYCLE
-product life cycle (PLC): the concept that the proﬁt-producing life of any product goes thru a
cycle of introduction, growth, maturity (levelling off), and decline
Stages in the Product Life Cycle h
1. introduction. begins when the product reaches the marketplace. marketers focus on making the
product known -> many costs, no proﬁts
2. growth. if new product = attractive, sales climb up -> start proﬁt. competitors introduce own
3. maturity. sales below to slow. prices fall due to competition of similar products, eventually
sales start to fall.
4. decline. sales and proﬁts fall, new products take away sales. remove or reduce promotional
support but may let product linger to provide some beneﬁts
-extending product life
1. product extension: existing, unmodiﬁed product that is marketed globally.
2. product adaptation: product modiﬁed to have greater appeal in foreign markets.
3. reintroduction: process of reviving for new markets products that are obsolete in older ones
-marketers not only develop products features but also identify product so consumers recognize
MGTA04 Chapter 6