MKT 300-- Product and Services Management

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The primary ways of deleting (or "retiring") a product

- phase outs - run outs - immediate drops

what are "venture teams"

A cross-functional group that creates entirely new products that may be aimed at new markets

TRUE or FALSE: Not all products that are test-marketed are launched.

TRUE

business analysis

a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives

Why are venture teams increasingly more used for new product development

bring more talent, resources, and ideas to a new venture. Moves things from an idea to a fully functioning firm.

functional modifications

changes affecting a product's versatility, effectiveness, convenience, or safety

quality modifications

changes relating to a product's dependability and durability

aesthetic modifications

changes relating to the sensory appeal of a product

product modification

changing one or more characteristics of a product

Product deletion

eliminating a product from the product mix when it no longer satisfies a sufficient number of customers

Run out

exploits any strengths left in the product

Milo is a product manager at Hershey. He learned that one of his competitors, the Mars Candy Company, is engaging in test marketing a new candy bar. He decided to increase promotional activity, including coupons with significant price reductions, in the test markets in order to _________ the test program.

jam

The three major types of product modifications that managers consider

quality modifications, functional modifications, and aesthetic modifications

The characteristics of an effective test market

right demographic, infrastructure, similarity to the eventual desired market, similar demographic and consumer purchasing habits, geographic isolation, and affordable advertising media

concept testing

testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal

test marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation

how does product modification differ from line extension?

the original product does not remain in the product line

benefits of test marketing

-Exposes the product to the marketing environment and assess its sales performance potential -Identifies weaknesses in the product or the marketing mix -Allows for experiments with variations in the marketing mix -Reduces the risk of failure*

why can running a test market be difficult?

1) it is expensive 2) competitors may try to interfere ("jam") by: - Increasing their own advertising or promotions - Lowering prices - Offering special incentives - Copying the product in the testing stage and rushing to introduce a similar product

The phases of new-product development

1. idea generation 2. screening 3. concept testing 4. business analysis 5. product development 6. test marketing 7. commercialization

Adrienne has gone to the store to shop for a new backpack. She looks for the same brand she has always bought in the past but notices that the backpack is now available in a variety of new colors. The backpack has undergone a(n) _____ modification.

Aesthetic -- bc it has to do with sensory details

Phase out

Allows a product to decline without a change in the marketing strategy

product development

developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering

line extension

extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category ** less expensive and less risky than developing a new product

Commercialization

introducing a new product into the market

screening

the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason

Idea generation

the systematic search for new product ideas

immediate drop

used when losses are too great to prolong the product's life


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