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.
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