Developing New Products and Services

Developing New Products and Services

1. A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value.

   • A Product Line
     • A group of products that are closely related because they satisfy a class of needs are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range.
       • Nike's product lines are athletic shoes and clothing.
   • SKU
     • Each specific product item. Different presentation.
       • Stock-keeping unit
   • Product Mix
     • The number of product lines offered by a company.
       • Constellation Brands” has a large Product Mix that includes three main product lines: Beers like Corona and Pacifico, Spirits like Black Velvet and Svedka Vodka, and many, many wines like Kim Crawford and Robert Mondavi.

2. Type of Consumer Products

   • Convenience Goods
     • Shopping Goods
       • Specialty
         • Unsought
           • Are items that the consumer either does not know about or knows about but does not initially want.
             • Disability insurance, funeral services, divorce lawyer, storing locker
             • If you need to find in the directories
         • Are items for which the consumer makes a specific effort to search out and buy
           • Tiffany sterling silver
       • Are items for which the consumer compares several alternatives on criteria, such as price, quality or style.
         • Limited Problem solving
           • Specific place-mall
     • Are purchased frequently with minimum shopping effort
       • Routine
         • Everywhere.

3. Classifying products

   • Type of User
     • Consumer Goods
       • Are products purchased by the ultimate consumer
       • Business Goods (B2B goods)/ Industrial goods or organizational goods
         • Are products that assist directly or indirectly in providing products for sale.
   • Degree of Tangibility
     • Nondurable good
       • Durable good
         • Services
           • act. deeds, or other basic intangibles offered for sale to consumers in exchange for money
         • Lasts over an extended number of uses, such as appliances, automobiles, and stereo equipment
       • Item consumed in one or a few uses, such as food products and fuel
   • Amount of learning required
     • Continuous innovation
       • Dynamically continuous innovation
         • Discontinuous Innovation
           • A great deal of new learning/ Very disruptive
             • Wireless router, digital video recorder and electric car
         • Some new learning required
           • Electric toothbrush, compact disc player, and automatic flash unit for cameras
       • No new learning is required.
         • New improved shaver, detergent, and toothpaste

4. Type of Business Product

   • Production Goods
     • Support Goods
       • Installations
         • buildings and fixed equipment
       • Accessory Equipment
         • Tools and office equipment
       • Supplies
         • Stationery and cleaners
       • Services
         • are intangible activities to assist the business buyer. This category can include maintenance and repair services and advisory services, such as tax or legal counsel, where the seller's reputation is critical
     • Raw materials
     • Component parts and materials

5. Considered New

   • Newness compared with existing products or features
     • Newess in legal terms
       • 12 months
       • Newness from the company's perspective
         • Lowest level
           • the least risk, is a product line extension
             • New Pepsi Ginger Cola
         • Middle Level
           • jump in innovation or technology
             • Cellphone manufacturer offering new smartphones
         • Third level
           • True innovation
             • Apple's apple II computer or its ipad
         • Newness from consumer's perspective
           • effects on consumption

6. 7 steps to identiftying and launching a new good or service

   • New Product Strategy Development
     • Idea Generation
       • Screening and Evaluation
         • Business Analysis
           • Development
             • Market testing
               • Commercialization
                 • Pay to get shelf space.
               • Put it in a store in a real life setting, but on a limited basis
                 • It is not usually done with services, expensive consumer products or costly industrial products.
             • Prototype
           • Financial Projections
         • Eliminate bad ideas
       • Research and development (R&D)
     • Customers, Employees, research and development and competitors.
   • The sequence of activities a firm uses to identify business opportunities and convert them into saleable goods or services

7. New-Product Failures

   • Insignificant "Point of difference"
     • Incomplete market and product definition before product development starts
       • Not satisfying customer needs on critical factors
         • Bad timing
           • Poor product quality
             • Poor execution of the marketing mix
               • Too little market attractiveness
       • Protocol
     • The most important factor for a new product to defeat competitive ones

8. a failure fee

   • If a new grocery product does not achieve a predetermined sales target, some retailers require a penalty payment by the manufacturer to compensate the retailer for sales its valuable shelf space never made.