MKT 300-- Product and Services Management
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
