Chapter 9: Developing new products and services. After reading this chapter 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,...
McGrawHill/Irwin Copyright © 2013 by The McGrawHill Companies, Inc. All rights reserved LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 9, YOU SHOULD BE ABLE TO: LO1 Recognize the terms that pertain to products and services LO2 Identify the ways to classify consumer and business products LO3 Describe four unique elements of services LO4 Explain the significance of “newness” and “consumer learning” to new products and services 92 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 9, YOU SHOULD BE ABLE TO: LO5 Describe the factors affecting the success or failure of a new product or service LO6 Explain the purposes of each step of the new-product process 93 APPLE’S NEW-PRODUCT INNOVATION MACHINE 94 APPLE’S NEW PRODUCTS Apple’s Innovation Machine iCloud: Where the Digital Lifestyle is Heading 95 LO1 WHAT ARE PRODUCTS AND SERVICES? A LOOK AT GOODS, SERVICES, AND IDEAS Products Goods • Nondurable Goods Services Ideas • Durable Goods 96 FIGURE 9-A The service continuum shows how offerings can vary in their balance of products and services 97 LO2 WHAT ARE PRODUCTS AND SERVICES? CLASSIFYING PRODUCTS Consumer Products Business Products 98 LO2 WHAT ARE PRODUCTS AND SERVICES? CLASSIFYING PRODUCTS Consumer Products • Convenience Products • Shopping Products • Specialty Products • Unsought Products 99 FIGURE 9-1 How a consumer product is classified affects which products consumers buy and the marketing strategies used 910 LO5 Avert, Monster in My Room, and Life Saver Why did these products fail? 935 LO5 USING MARKETING DASHBOARDS Which States are Underperforming? Annual Percent Change in Unit Volume by State Change in Growth < 0% to 10% > 10% 936 FIGURE 9-5 Seven stages in the newproduct process leading to success 937 LO6 THE NEW-PRODUCT PROCESS STAGE 1: NEW-PRODUCT STRATEGY DEVELOPMENT New-Product Process • Stage Gate Process New-Product Strategy Development • Strategic Role Defined • SWOT Analysis/Scanning Conducted • Protocol Defined • Service Development Difficult 938 FIGURE 9-E Strategic roles of most successful new products 939 LO6 THE NEW-PRODUCT PROCESS STAGE 2: IDEA GENERATION Idea Generation • Open Innovation Employee and Co-Worker Suggestions Customer and Supplier Suggestions Tide Pods Ad • Crowdsourcing 940 LO6 THE NEW-PRODUCT PROCESS STAGE 2: IDEA GENERATION Research & Development Laboratories • Industrial Design • Outside Labs 941 LO6 THE NEW-PRODUCT PROCESS STAGE 2: IDEA GENERATION Competitive Products Smaller Firms Universities Inventors 942 LO6 THE NEW-PRODUCT PROCESS STAGE 3: SCREENING AND EVALUATION Screening and Evaluation • Internal Approach Customer Experience Management (CEM) • External Approach Concept Tests 943 LO6 THE NEW-PRODUCT PROCESS STAGE 4: BUSINESS ANALYSIS Business Analysis Prototype Capacity Management Off-Peak Pricing Business Fit 944 LO6 THE NEW-PRODUCT PROCESS STAGE 5: DEVELOPMENT Development • Example: Chobani Yogurt • Service Encounters • Safety Tests 945 MARKETING MATTERS LO6 Marissa Mayer: The Talent Behind Google’s Familiar White Home Page 946 LO6 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 947 LO6 THE NEW-PRODUCT PROCESS STAGE 7: COMMERCIALIZATION Commercialization • Regional Rollouts Burger King’s French Fries Risks with Grocery Products • Slotting Fee • Failure Fee 948 LO6 THE NEW-PRODUCT PROCESS STAGE 7: COMMERCIALIZATION Speed as a Factor in New-Product Success • Time to Market (TtM) • Parallel Development • Fast Prototyping 949 ... in Legal Terms 9 24 FIGURE 9- 4 The degree of “newness” in a new product affects the amount of learning effort consumers exert to use the product 9 25 LO4 NEW PRODUCTS AND WHY THEY SUCCEED OR... Offering • Core • Supplementary 9 14 LO3 WHAT ARE PRODUCTS AND SERVICES? THE UNIQUENESS OF SERVICES Assessing Service Quality • Gap Analysis • Monitoring Service Failure 9 15 FIGURE 9- 3 The five... Innovation 9 27 LO4 Purina Elegant Medleys What are the potential benefits and dangers of product line extensions? 9 28 FIGURE 9- C What it takes to launch one commercially successful new product 9 29