MKT 340 Ch09 ppt(4)

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Recognize the terms that pertain to products and services.LO1

Identify the ways to classify consumer and business products.

LO3

LO2

LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 9, YOU SHOULD BE ABLE TO:

Describe four unique elements of services.

LO4Explain the significance of “newness” and “consumer learning” to new products and services.

9-2


Describe the factors affecting the success or failure of a new product or service.

Explain the purposes of each step of the new-product process.LO6

LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 9, YOU SHOULD BE ABLE TO:

LO5

9-3


APPLE’S NEW-PRODUCTINNOVATION MACHINE

9-4

Apple CarPlayAd

http://kerin.tv/cr6e/v9-1


WHAT ARE PRODUCTS AND SERVICES?A LOOK AT GOODS, SERVICES, AND IDEAS

LO1

Goods

Services

• NondurableGoods

• DurableGoods

Products

Ideas

9-5


FIGURE 9-1 Services now contribute about twice the value to the U.S. gross domestic product than goods do


FIGURE 9-A The service continuum shows how offerings can vary in their balance of products and services

9-7


WHAT ARE PRODUCTS AND SERVICES?CLASSIFYING PRODUCTS

LO2

Business Products

Consumer Products

9-8



LO2

Consumer Products

• Convenience Products

• Shopping Products

• Specialty Products

• Unsought Products

9-9


FIGURE 9-2 How a consumer product is classified affects which products consumers buy and the marketing strategies used

9-10



LO2

Business Products

• Components

• Support Products

• Derived Demand

Supplies

IndustrialServices

Installations

AccessoryEquipment

9-11


WHAT ARE PRODUCTS AND SERVICES?CLASSIFYING SERVICES

LO2

Delivery by People or Equipment

Delivery by Business Firms or Nonprofit Organizations

Delivery by Government Agencies

9-12


FIGURE 9-3 Services can be classified as equipment-based or people-based

9-13


WHAT ARE PRODUCTS AND SERVICES?THE UNIQUENESS OF SERVICES

LO3

Four I’s of Services

• Intangibility • Inseparability

• Inconsistency • Inventory

Idle Production Capacity

Product/Service Offering• Core • Supplementary

9-14



LO3

Assessing and Improving Service Quality• Gap Analysis – compare expectations to the actual experience• Monitoring Service Failure• Use market research to improve

9-15



LO3

Customer Contact Audits

• Customer Contact Audit

• Service Encounters

• A Customer’s Car Rental Activities

9-16


FIGURE 9-B Customer contact audit for a car rental agency (green boxes = customer activity; orange boxes = employee activity)

9-17

Hertz Ad

http://kerin.tv/cr6e/ppt9-1


Product Item

Product Line

Product Mix

• Stock Keeping Unit (SKU)

WHAT ARE PRODUCTS AND SERVICES?PRODUCT CLASSES, FORMS, ITEMS, LINES, AND MIXES

LO3

9-18


WHAT ARE PRODUCTS AND SERVICES?PRODUCT CLASSES, FORMS, ITEMS, LINES, AND MIXES

LO3

Product Class (Industry where product belongs)

Product Form (Different shapes, types)

9-19

Crapola Ad



MARKETING MATTERSFeature Bloat: Geek Squad to the Rescue!

LO4

9-20

Geek Squad Video



NEW PRODUCTS AND WHYTHEY SUCCEED OR FAILWHAT IS A NEW PRODUCT?

LO4

Newness:

Compared to Existing Products

9-21

Playstation Video



Newness: The Consumer’s Perspective

• Continuous Innovation

• Dynamically Continuous Innovation

• Discontinuous Innovation

Newness in Legal Terms


LO4

9-22


FIGURE 9-4 The degree of “newness” in a new product affects the amount of learning effort consumers exert to use the product

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• Product Line Extension

• Jump in Innovation

Newness: The Organization’s Perspective


LO4

9-24


• Brand Extension

• True Innovation

Newness: The Organization’s Perspective


LO4

9-25


Product Line ExtensionsLO4

9-26

Purina Web site

Example:Purina Elegant Medleys

What are the potential benefits and dangers of product line extensions?



FIGURE 9-C What it takes to launch one commercially successful new product

9-27


FIGURE 9-D What separates new-product winners and losers

9-28


Marketing Reasons for New-Product Failures

• Insignificant Points of Difference

• No Economical Access to Buyers

• Not Satisfying Customer Needs onCritical Factors

• Incomplete Market and Product ProtocolBefore Product Development Starts

NEW PRODUCTS AND WHYTHEY SUCCEED OR FAIL

WHY PRODUCTS & SERVICES SUCCEED OR FAILLO5

9-29


Marketing Reasons for New-Product Failures

• Bad Timing

• Poor Product Quality

• Poor Execution of the Marketing Mix

• Too Little Market Attractiveness



9-30


• Not Listening to the “Voice” of the Consumer

• Skipping Stages in the New-Product Process

What Were They Thinking? Organizational Problems in New-Product Failure

• Marketing a Poorly Conceived Product Too Quickly

• Encountering “Groupthink” in Meetings

• Not Learning Lessons From Past Failures

• Avoiding the “NIH Problem”



9-31


Fingos & Thirsty Dog/Thirsty CatWhy did these products fail?

LO5

9-32


Monster in My Room and Life SaverWhy did these products fail?

LO5

9-33


USING MARKETING DASHBOARDSWhich States are Underperforming?

Annual Percent Change in Unit Volume by State

> 10%0 to 10%< 0%

Change in Growth

LO5

9-34


FIGURE 9-5 Seven stages in the new-product process leading to success

9-35


THE NEW-PRODUCT PROCESSSTAGE 1: NEW-PRODUCT STRATEGY DEVELOPMENT

LO6

New-Product Process

• SWOT Analysis/Scanning Conducted

New-Product Strategy Development

• Strategic Role Defined

• Protocol Defined

• Stage Gate Process

• Service Development Difficult9-36


FIGURE 9-E Strategic roles of most successful new products

9-37


THE NEW-PRODUCT PROCESSSTAGE 2: IDEA GENERATION

LO6

Employee and Co-Worker Suggestions

Customer and Supplier Suggestions

• Crowdsourcing

Idea Generation

• Open Innovation

9-38

Life is Good




LO6

• Outside Labs

• Industrial Design

Research & Development Laboratories

9-39

IDEO GourmetCafé Salad Packaging




LO6

Inventors

Smaller Firms

Universities

Competitive Products

9-40

EPS WholeTree Havester



THE NEW-PRODUCT PROCESSSTAGE 3: SCREENING AND EVALUATION

LO6

• Internal Approach

• External Approach

Concept Tests

Screening and Evaluation

Customer Experience Management (CEM)

9-41


THE NEW-PRODUCT PROCESSSTAGE 4: BUSINESS ANALYSIS

LO6

Prototype Business Fit

Capacity Management

Off-Peak Pricing

Business Analysis

9-42

Google Driverless Car



THE NEW-PRODUCT PROCESSSTAGE 5: DEVELOPMENT

LO6

• Service Encounters and Delivery

• Example: Google’s Driverless Car

• Safety Tests

Development

9-43


THE NEW-PRODUCT PROCESSSTAGE 6: MARKET TESTING

LO6

• Simulated Test Markets (STMs)

• Test Marketing

• When Test Markets Don’t Work

Market Testing

• Standard Test Markets

• Controlled Test Markets

9-44


THE NEW-PRODUCT PROCESSSTAGE 7: COMMERCIALIZATION

LO6

Burger King’s French Fries

Risks with Grocery Products

• Slotting Fee

• Failure Fee

Commercialization

• Regional Rollouts

9-45


Speed as a Factor in New-Product Success

• Time to Market (TtM)

• Parallel Development

• Fast Prototyping

THE NEW-PRODUCT PROCESSSTAGE 7: COMMERCIALIZATION

LO6

9-46


X-1: BREAKING THE BARRIERS OF SOUND WITH NEW-PRODUCT DEVELOPMENT

VIDEO CASE 9

X-1 Video Case



VIDEO CASE 9X-1

1. What are the points of difference, or unique attributes, for X-1 products?

2. What are X-1’s primary target markets?


VIDEO CASE 9X-1

3. Describe the new-product development process used by X-1. What are the similarities and differences to the process described in Figure 10-3?


VIDEO CASE 9X-1

4. Which of the eight reasons for new-product failure did X-1 avoid to ensure success of X-1’s products?

5. Identify one new-product idea you would suggest that X-1 evaluate.


CUSTOMER CONTACT AUDIT FOR A SERVICE

IN-CLASS ACTIVITY 9-1


Customer contact audit for a car rental (green boxes = customer activity; orange boxes =

employee activity)



USING METHOD 6-3-5 TO FIND NEW-PRODUCT IDEAS

FOR MAGNETIC POETRY

IN-CLASS ACTIVITY 9-2


ICA 9-2Magnetic Poetry’s Little Boxes of Words

MagneticPoetry

Example:Use Method 6-3-5 to find New Product Ideas

For Magnetic Poetry’s Little Boxes of Words





Product

A product is a good, service,or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of value.

9-58


Services

Services are the intangible activities or benefits that an organization provides to satisfy consumers’ needs in exchange money or something else of value.

9-59


Consumer Products

Consumer products are products purchased by the ultimate consumer.

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Business Products

Business products are products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products.

9-61


Four I’s of Services

The four I’s of services consistsof the four unique elements that distinguish services from goods: intangibility, inconsistency, inseparability, and inventory.

9-62


Idle Production Capacity

Idle production capacity occurs when the service provider is available but there is no demand for the service.

9-63


Product Item

A product item is a specific product that has a unique brand, size, or price.

9-64


Product Line

A product line is a group of product or service items that are closely related because they satisfy a classof needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range.

9-65


Product Mix

A product mix consists of all of the product lines offered by an organization.

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New-Product Process

The new-product process consists of the seven stages an organization goes through to identify business opportunitiesand convert them to salable products or services.

9-67


Customer Experience Management (CEM)

Customer experience management (CEM) is the process of managing the entire customer experience within the firm.

9-68