Blog 5- Product Classification and The New-Product Process

            Chapter 10 of our marketing book discusses developing new products and services.  It first discusses the many different kinds of products that are available in the market.  There are convenience products, shopping products, specialty products, and unsought products.  Convenience products are items that a consumer purchases frequently without considering the brand or price such as milk or shampoo.   Shopping products are items consumers compare different alternatives and prices before making a decision such as shoes or cloths.  Specialty products are items that consumers make a special effort in making a purchase such as a car.  Unsought products are products that consumers do not initially want.  Each product has very different marketing mix characteristics.  For example convenience products can be found at a large variety of stores and outlets, but specialty products can only be found in very selective and limited outlets.  Products are also classified in to consumer products and business products.  For example a product like a computer can be viewed as a consumer product for someone buying it for personal use or it can be viewed as a business product when companies buy computers for their office. 

           

The next main theme of the chapter talks about coming up with a new product.  It is very difficult to come up with a new product that will be successful and be able to compete with similar products in the same market.    That is why in a new product or service needs a protocol, which is a statement that identifies a well-designed target market, specific customers needs and preferences; and how the product will satisfy customers. 

            New products also go through what is called the new-product process, which are the seven stages an organization goes through to identify business opportunities and convert them into salable products.  The first step in the new-product process is new product strategy development, which are the firms overall objectives for the product.  It takes SWOT analysis and environmental scanning into consideration.  The second stage is idea generation, which involves developing various ideas and concepts for new products.  New ideas can be generated though company research and development laboratories or by asking feedback from customers or suppliers.  The third stage is screening and evaluation.  This stage is where a firm internally and externally evaluates new products and eliminates ones that have no further use. Stage 4 is business analysis, which discusses the features of the product and the marketing strategy needed to bring it to the market and make financial projections.  Business analysis looks at how the product or service will do in the market along with how costly the product will be to make.  Stage 5 is the development stage, which turns the idea for the product into an actual prototype.  Stage 6 of the new-product process is market testing which exposes the product to prospective consumers.  The seventh and final step is commercialization, which launches a new product into full-scale production in the market.  Overall companies spend a lot of time and effort into coming up with products that will hopefully become successful in the market place. 

Blog 4- Market Segmentation

One marketing topic that we have recently been discussing in our marketing class is market segmentation.  Market segmentation involves aggregating prospective buyers into groups that have common needs and will respond similarly to marketing actions.  This allows companies to take a large target market and break it down into smaller ones and create products that specifically fit that specific target.  Market segmentation is necessary for companies for the reason that is too challenging to target your products to everyone. 

            Market segmentation is usually divided into demographic, geographic, physiographic, and behavioral segmentations.  Demographic segmentation focuses on targeting to different ages, races, and genders.  Geographic segmentation targets people who live in certain locations such as suburban, rural, or urban areas.  Physiographic segmentation focuses on targeting consumers that share similar interests and lifestyles.  Behavioral segmentation works to figure how different consumers perceive their product and how often or little they wish to use that product. 

            There are many examples of companies that use market segmentation.  Most car companies use market segmentation by designing different models of cars to reach different target markets.  Chevrolet is one example of a car company that has many buying options for different market segments.  Chevy has SUV’s that target families in suburban areas, they have sports cars to target upper class consumers, and they also have smaller fuel-efficient models to target middle income consumers.   Chevy pick-up trucks are also very popular and does a good job at targeting consumers who live a more rugged lifestyle and live in geographic location where trucks would be needed to drive through serious weather conditions. 

            In the clothing industry, market segmentation is very important in order to reach multiple target markets.  Demographics are a big focus in segmenting markets.  Most clothing companies sell cloths that are both for men and women as well as children and adults.   Clothing companies also need to consider different lifestyles of consumers.  For example, The North Face is a clothing company that sells a wide variety of winter jackets and outdoor apparel that fit the needs of many different consumers.  North Face has jackets that are designed to withstand extremely cold weather for consumers that enjoy skiing and need a warm jacket.  They also make jackets that are more casual for consumers that are looking for a jacket that will keep them warm but might not necessarily need a heavy ski jacket. 

            Market segmentation is an extremely important part of marketing and is crucial in having a successful product.  It is something that our groups for practice marketing are doing when designing our backpacks.  Our group’s goal is to target university students with an environmentally friendly backpack that will meet there needs in a backpack at an affordable price.  We have also been trying to come up with ways to reach our market segment by figuring out the best places to sell our product as well as how to promote.  Market segmentation will be a very vital concept to have moving forward.