Lecture Marketing (12/e): Chapter 10 – Kerin, Hartley, Rudelius

Chapter 10 - Developing new products and services. After reading chapter 10, you should be able to: Recognize the terms that pertain to products and services, identify the ways to classify consumer and business products, describe four unique elements of services, explain the significance of “newness” and “consumer learning” to new products and services.

Copyright © 2015 McGraw­Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw­Hill Education LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO: LO 10-1 Recognize the various terms that pertain to products and services LO 10-2 Identify the ways in which consumer and business products can be classified LO 10-3 Explain the significance of “newness” in new products and services as it relates to the degree of consumer learning involved 10­2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 10, YOU SHOULD BE ABLE TO: LO 10-4 Describe the factors contributing to the success or failure of a new product or service LO 10-5 Explain the purposes of each step of the new-product process 10­3 APPLE: THE WORLD-CLASS NEW-PRODUCT MACHINE 10­4 APPLE: THE WORLD-CLASS NEW-PRODUCT MACHINE  Apple’s Innovation Machine  iCloud: Where the Digital Lifestyle is Heading 10­5 LO 10-1 WHAT ARE PRODUCTS AND SERVICES? A LOOK AT GOODS, SERVICES, AND IDEAS  Products  Goods • Nondurable Goods  Services  Ideas • Durable Goods 10­6 LO 10-2  WHAT ARE PRODUCTS AND SERVICES? CLASSIFYING PRODUCTS Consumer Products • Convenience Products • Shopping Products • Specialty Products • Unsought Products 10­7 FIGURE 10-1 How a consumer product is classified affects which products consumers buy and the marketing strategies used 10­8 LO 10-2  WHAT ARE PRODUCTS AND SERVICES? CLASSIFYING PRODUCTS Business Products • Derived Demand • Components • Support Products  Installations  Supplies  Accessory Equipment  Industrial Services 10­9 LO 10-2 WHAT ARE PRODUCTS AND SERVICES? CLASSIFYING SERVICES  Delivery by People or Equipment  Delivery by Business Firms or Nonprofit Organizations  Delivery by Government Agencies 10­10 LO 10-4 USING MARKETING DASHBOARDS Which States are Underperforming? Annual Percent Change in Unit Volume by State ( )  2013 Sales – 2012 Sales × 100  Annual % Sales Change =   2012 Sales   Change in Growth < 0% to 10% > 10% 10­31 FIGURE 10-3 Seven stages in the new-product process leading to success 10­32 LO 10-5  THE NEW-PRODUCT PROCESS STAGE 1: NEW-PRODUCT STRATEGY DEVELOPMENT New-Product Process • Stage Gate Process  New-Product Strategy Development • SWOT Analysis/Scanning Conducted • Protocol/Strategic Role Defined • Disruptive Innovation Can Occur • Service Development Difficult 10­33 FIGURE 10-C Strategic roles of most successful new products 10­34 LO 10-5  THE NEW-PRODUCT PROCESS STAGE 2: IDEA GENERATION Idea Generation • Open Innovation   Employee and Co-Worker Suggestions Customer and Supplier Suggestions • Crowdsourcing Ford Fusion Ad Tide Pods Ad 10­35 LO 10-5  THE NEW-PRODUCT PROCESS STAGE 2: IDEA GENERATION Research and Development Laboratories • Industrial Design • Outside Labs: IDEO 10­36 LO 10-5 THE NEW-PRODUCT PROCESS STAGE 2: IDEA GENERATION  Competitive Products  Smaller Firms, Universities, and Inventors • Crowdfunding: Pebble Smartwatch 10­37 LO 10-5  THE NEW-PRODUCT PROCESS STAGE 3: SCREENING AND EVALUATION Screening and Evaluation • Internal Approach  Customer Experience Management (CEM) • External Approach  Concept Tests 10­38 LO 10-5  THE NEW-PRODUCT PROCESS STAGE 4: BUSINESS ANALYSIS Business Analysis • Prototype • Business Fit • Capacity Management • Off-Peak Pricing 10­39 LO 10-5  THE NEW-PRODUCT PROCESS STAGE 5: DEVELOPMENT Development • Ex: Google Driverless Car • Service Encounters 10­40 LO 10-5 MARKETING MATTERS Netflix’s Wild Roller-Coaster Ride 10­41 LO 10-5  THE NEW-PRODUCT PROCESS STAGE 6: MARKET TESTING Market Testing • Test Marketing • Standard Test Markets • Controlled Test Markets • Simulated Test Markets (STMs) • When Test Markets Don’t Work 10­42 LO 10-5  THE NEW-PRODUCT PROCESS STAGE 7: COMMERCIALIZATION Commercialization • The Boeing 787 Dreamliner Experience • Burger King French Fries: The Complexity of Commercialization 10­43 LO 10-5 THE NEW-PRODUCT PROCESS STAGE 7: COMMERCIALIZATION • The Risks with Grocery Products  Slotting Fee  Failure Fee • Speed as a Factor in New-Product Success  Time to Market (TtM)  Parallel Development  Fast Prototyping 10­44 VIDEO CASE 10 X-1: BREAKING THE BARRIERS OF SOUND WITH NEW-PRODUCT DEVELOPMENT 10­45 ... fail? 10 28 LO 10- 4 Thirsty Dog/Thirsty Cat and Garlic Cake Why did these products fail? 10 29 LO 10- 4 Monster in My Room and Life Saver Why did these products fail? 10 30 LO 10- 4 USING MARKETING. .. New-Product Process Stages • Marketing a Product too Quickly • Not Learning from Past Failures 10 26 LO 10- 4 Fingo’s and Avert Why did these products fail? 10 27 LO 10- 4 U.S Auto Makers and Zune... NEW PRODUCT?  Newness: Compared to Existing Products 10 14 LO 10- 3 MARKETING MATTERS Feature Bloat: Geek Squad To The Rescue! 10 15 LO 10- 3 NEW PRODUCTS AND WHY THEY SUCCEED OR FAIL WHAT IS