Dr. Hurrem Yilmaz Slide 10-2
DEVELOPINGNEW PRODUCTS
AND SERVICES
CHAPTER
Dr. Hurrem Yilmaz
What are the core, actual, and augmented
product benefits of the Converse Chuck?
• http://www.converse.com/
Dr. Hurrem Yilmaz
• The core benefit— success on the basketball court like Magic Johnson, Dr. J, Kareem Abdul Jabbar, and Larry Johnson.
• Actual product, features, and design– Rubber covered toes; canvas tops; high tops; Highly identifiable shoe.
Packaging—shoe boxes that continue the color theme. Quality —not as good as the shoes from Nike, Reebok.
Brand Name—well-known brand due to long history, being the first major basketball shoe and associations with famous players.
• Augmented Product: Warranty—little to none. Delivery and credit—function of where sold, but as market share declined, it became harder and harder to find Chucks. After-sales service and installation are not major concerns here.
Dr. Hurrem Yilmaz
WHAT ARE PRODUCTS AND SERVICES?A LOOK AT GOODS, SERVICES, AND IDEAS
Goods
Services
• NondurableGoods
• DurableGoods
Products
Ideas
9-4
Dr. Hurrem Yilmaz
Product Item
Product Line
Product Mix
• Stock Keeping Unit (SKU)
WHAT ARE PRODUCTS AND SERVICES?PRODUCT ITEMS, LINES, MIXES, CLASSES AND FORMS
9-5
Dr. Hurrem Yilmaz
WHAT ARE PRODUCTS AND SERVICES?PRODUCT ITEMS, LINES, MIXES, CLASSES AND FORMS
Product Class
Product Form
9-6
Dr. Hurrem Yilmaz
THE VARIATIONS OF PRODUCTS
Slide 10-14
• The Uniqueness of Services
Intangibility
Inconsistency
• Idle Production Capacity
Inseparability
Inventory
Dr. Hurrem Yilmaz
• Convenience• Shopping• Specialty• Unsought
• Frequent purchases bought with minimal buying effort and little comparison shopping
• Low price
• Widespread distribution
• Mass promotion by producer
Types of Consumer Products
Dr. Hurrem Yilmaz
• Convenience• Shopping• Specialty• Unsought
• Less frequent purchases
• More shopping effort for comparisons
• Higher than convenience good pricing
• Selective distribution in fewer outlets
• Advertising and personal selling
Types of Consumer Products
Dr. Hurrem Yilmaz
• Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity
• High price
• Exclusive distribution
• Carefully targeted promotions
Types of Consumer Products
• Convenience• Shopping• Specialty• Unsought
Dr. Hurrem Yilmaz
• Convenience• Shopping• Specialty• Unsought
• Little product awareness and knowledge (or if aware, sometimes negative interest)
• Pricing varies
• Distribution varies
• Aggressive advertising and personal selling by producers and resellers
Types of Consumer Products
Dr. Hurrem Yilmaz
Newness: The Consumer’s Perspective
• Continuous Innovation
• Dynamically Continuous Innovation
• Discontinuous Innovation
Newness in Legal Terms
NEW PRODUCTS AND WHYTHEY SUCCEED OR FAILWHAT IS A NEW PRODUCT?
9-12
Dr. Hurrem Yilmaz Slide 10-29
Product “newness,” as defined by the degree of consumer learning needed to use the product
Dr. Hurrem Yilmaz
NEW PRODUCTS AND WHY THEY SUCCEED OR FAIL
Slide 10-30
• Incomplete Market and Product DefinitionBefore Product Development Starts
• Insignificant Point of Difference
• Too Little Market Attractiveness
• Poor Execution of the Marketing Mix
• Poor Product Quality or Insensitivity toCustomer Needs on Critical Factors
• Bad Timing
• No Economic Access to Buyers
Dr. Hurrem Yilmaz
On computers and chips:
• “There is no reason anyone would want a computer in their home.”
–Ken Olson, President, Chairman and Founder of Digital Equipment Corp., 1977
• “I think there is a world market for maybe five computers.” –Thomas Watson, Chairman of IBM, 1943.
Dr. Hurrem Yilmaz Slide 10-42
Stages in the new-product process
Dr. Hurrem Yilmaz Slide 10-92
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 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.
Product
Dr. Hurrem Yilmaz Slide 10-95
Consumer goods are products purchased by the ultimate consumer.
Consumer goods are products purchased by the ultimate consumer.
Consumer Goods
Dr. Hurrem Yilmaz Slide 10-96
Business goods are products that assist directly or indirectly in providing
products for resale.
Business goods are products that assist directly or indirectly in providing
products for resale.
Business Goods
Dr. Hurrem Yilmaz Slide 10-97
Idle production capacity is when the service provider is available but there
is no demand.
Idle production capacity is when the service provider is available but there
is no demand.
Idle Production Capacity
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