Study Guide > Chapter 8 Marketing Notes – Developing/Managing Products and Services

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Chapter 8 Marketing Notes – Developing/Managing Products and Services Product- anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need Services: product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything Product is a key element in the overall market offering pure tangible good, such as soap, toothpaste, or salt pure services, for which the offer consists primarily, or solely, of a service; credit cards Core customer value, which addresses the question “What is the buyer really buying?”

Actual product—the physical device with all its features and associated brand name and packaging Augmented product—the additional services and benefits that go with it Consumer Products- are purchased by consumers for their personal (i.e., nonbusiness) use Convenience Products- are consumer products and services that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort Shopping Products- are less frequently purchased consumer products and services that shoppers compare carefully on suitability, quality, price, and style Specialty Products- are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort Unsought Products- are consumer products that the consumer either does not know about or knows about but does not normally think of buying Industrial Products- A product bought by individuals and organizations for further processing or for use in conducting a business

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The three groups of industrial products and services are materials and parts, capital items, and supplies and services; Materials and parts include raw materials and manufactured materials and parts.  Raw materials consist of farm products (wheat, cotton, livestock) and natural products (fish)  Manufactured materials and parts consist of component materials (iron) and component parts (small motors) Capital items are industrial products that aid in the buyer’s production or operations, including installations and accessory equipment supplies and services  Supplies include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms)  Business services include maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, management consulting, advertising) New-product Development- the development of original products, product improvements, product modifications, and new brands through the firms own product development efforts Diffusion of Innovation Theory- a social sciences theory that divides members of a social group into segments according to how likely they are to adopt a new idea Technology Adoption Life Cycle- a marketing theory that proposes that when marketing a technology product, marketers must cross a chasm, or a significant gap, between members of the early adopter’s segment and members of the early majority segment, before a new product will become successful Early adopters will purchase new technology soon after it is released, but only if they have a use or purpose for it Early majority are the more practical market segment Late majority are those who wait until the new technology has been proven and has more or less become a standard Laggards are people who are not comfortable with technology or have no interest in it Idea Generation- the systematic search for new-product ideas Crowdsourcing- inviting broad communities of people such as customers, employees, independent scientists and researchers, and even the public at large into the new-product innovation process Idea Screening- screening new-product ideas to spot good ideas and drop poor ones as soon as possible Product Concept- is a detailed description, drawing, or prototype of that idea that can be shown to potential customers

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Market Strategy Development- designing an initial marketing strategy for a new product based on the product concept 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 Product Development- developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering. Also, a strategy for company growth by offering modified or new products to current market segments Test Marketing- the stage of new-product development in which the product and marketing program are tested in realistic market settings Commercialization- the full-scale introduction of the product into the market Product Life Cycle- course that a product’s sales and profits take over its lifetime. It involves five stages: product development, introduction, growth, maturity, and decline Introduction Stage- starts when the new product is first launched Growth stage- sales begin to climb quickly Maturity Stage- lasts longer than the other stages, sales slow/level off modifying the market, or trying to increase consumption by finding new market segments modifying the product—changing characteristics such as quality, features, style, or packaging to attract new users and inspire more usage modifying the marketing mix—improving sales by changing one or more marketing mix elements, such as improving services, adjusting prices, or running a sales promotion Decline Stage- stage in which a products sale decline Style- basic and distinctive mode of expression Fashion- is a currently accepted or popular style of design, colour, or them Fads- are new products that are extremely popular for a very short period of time, then disappear almost completely  

individual products and services include decisions about product attributes, packaging, labelling, and product support services product attributes such as quality, features, and style and design.

Product Quality- the characteristics of a product or a service that bear on its ability to satisfy stated or implied customer needs

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Style simply describes the appearance of a product design is more than skin deep—it goes to the very heart of a product Packaging- the activities of designing and producing the container or wrapper for a product Sustainable Packaging- packaging that meets the requirements of the product while minimizing the environmental, economic, and social impacts of the product and its package Product Line- a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges product line length—the number of items in the product line Product line filling involves adding more items within the present range of the line Product line stretching occurs when a company lengthens its product line beyond its current range Product Mix (or product portfolio)- consists of all the product lines and items that a company market depth refers to the number of versions offered of each product in the line consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way service sector, as it’s called, is the single most important industry in Canada’s economy, accounting for nearly 70 percent of total gross domestic product Service Intangibility- means that services cannot be seen, tasted, felt, heard, or smelled before they are bought evidence management, in which the service organization presents its customers with organized, honest evidence of its capabilities Service Inseparability- a major characteristic of services-they are produced and consumed at the at the same time and cannot be separated from their providers provider–customer interaction is a special feature of services marketing Service Variability- means that the quality of services depends on who provides them as well as when, where, and how they are provided Service Perishability- means that services cannot be stored for later sale or use Service-profit chain- the chain that links service firm profits with employee and customer satisfaction

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Internal service quality: superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results in . . .  Satisfied and productive service employees: more satisfied, loyal, and hard-working employees, which results in . . .  Greater service value: more effective and efficient customer value creation and service delivery, which results in . . .  Satisfied and loyal customers: satisfied customers who remain loyal, repeat purchase, and refer other customers, which results in . . .  Healthy service profits and growth: superior service firm performance.

Internal Marketing- orienting and motivating customer-contact employees and supporting service people in working as a team to provide customer satisfaction 

Service companies face three major marketing tasks: They want to increase their service differentiation, service quality, and service productivity

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