DEVELOPING

NEW PRODUCTS
AND SERVICES
By, sumaiya tariq
 Product Items, Lines, and Mixes

A
A specific
specific version
version of
of an
an
Product
Product Item
Item organization’s
organization’s products.
products.
(SKU) Each has a unique number and bar code

A
A group
group of
of closely-related
closely-related
Product
Product Line
Line product
product items.
items.

All
All products
products that
that an
an
Product
Product Mix
Mix organization
organization sells.
sells.
5 Gillette’s Product Lines and Mix

Width of the product mix

Depth of the product lines

Blades and Writing

razors Toiletries instruments Lighters

Mach 3 Series Paper Mate Cricket

Sensor Adorn Flair S.T. Dupont
Trac II Toni
Atra Right Guard
Swivel Silkience
Double-Edge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus
 Classifying Products

 Type of User
• Consumer Goods • Business Goods

 Degree of Tangibility
• Non durable Good-used up in a few uses

• Durable Good-lasts over many uses

Examples??
• Services
 The Characteristics of
Services
Services that cannot be touched,
Intangibility seen, tasted, heard, or felt in the
same manner as goods.

A characteristic of services that

Inseparability allows them to be produced and
consumed simultaneously.
A characteristic of services that
Heterogeneity makes them less standardized
and uniform than goods.
A characteristics of services that
Perishability prevents them from being stored,
warehoused, or inventoried.
 THE VARIATIONS OF PRODUCTS

 The Four I’s of Services

 Intangibility

 Inseparability

 Inconsistency

 Inventory
• Idle Production Capacity-
like stock out costs and holding costs for goods
Can be reduced by using commission and part time workers
 CLASSIFYING GOODS AND SERVICES

Convenience
Convenience AArelatively
relativelyinexpensive
inexpensiveitem
itemthat
thatmerits
merits
Product little
littleshopping
shoppingeffort.
effort.
Product

Shopping AAproduct
productthat
thatrequires
requirescomparison
comparison
Shopping shopping,
Product shopping,because
becauseititis
isusually
usuallymore
more
Product expensive
expensiveand
andfound
foundininfewer
fewerstores.
stores.

Specialty AAparticular
particularitem
itemthat
thatconsumers
consumers
Specialty search
searchextensively
extensivelyfor
forand
andare
arereluctant
reluctantto
to
Product
Product accept
acceptsubstitutes.
substitutes.

Unsought AAproduct
productunknown
unknownto tothe
thepotential
potentialbuyer
buyeror
or
Unsought aaknown
knownproduct
productthat
thatthe
thebuyer
buyerdoes
doesnot
not
Product
Product actively
activelyseek.
seek.
Classification of consumer goods
Why new-product development can be a
dice roll: some forecasts
 What Is A New Product

 Functionally Different from Existing Products

 FTC: Newness = 6 Months or less After
Regular Distribution
 Company: Simply Anything Different
FIGURE 10-D What it takes to launch one
commercially successful new product
Reasons for New Product Failures

• Bad Timing

• Too Little Market Attractiveness

• Poor Execution of the Marketing Mix:

Name, Price, Promotion, and Distribution

• No Access to Buyers
• Insignificant Point of Difference

• Poor Product Quality

• Insensitivity to Customer Needs on Critical Factors

Why Did These Products Fail?
Why did this new product fail?
Stages in the New Development Process
Strategic roles of most successful new products
THE NEW-PRODUCT PROCESS-
Idea Generation

 Customer and Supplier Suggestions

 Employee and Co-Worker Suggestions
 Research and Development Breakthroughs
 Competitive Products
THE NEW-PRODUCT PROCESS-
Screening and Evaluation

The first filter in the product

development process, which
eliminates ideas that are inconsistent
with the organization’s new-product
strategy or are inappropriate for
some other reason.
 THE NEW-PRODUCT PROCESS-
Business Analysis
• if positive, build a prototype

Demand

Considerations
Considerations Cost
in
in
Business
Business
Analysis
Analysis Stage
Stage Sales

Profitability
 THE NEW-PRODUCT PROCESS-
Development
 “Failure Analysis”  Safety Tests

Marketing strategy
Packaging, branding, labeling
Manufacturing feasibility
Final government approvals if
needed
THE NEW-PRODUCT PROCESS- Test
Marketing

The limited introduction of a product

and a marketing program to determine
the reactions of potential customers
in a market situation.
When Test Markets Don’t Work

Limited time to market

Service nature of the item
Time to see product benefit is long
 Number of units produced is small
Six important U.S. test markets “demographics
winner”: Wichita Falls, Texas, metropolitan
statistical area
 THE NEW-PRODUCT PROCESS-
Commercialization
Most expensive stage

 Ramp Up and Regional Rollouts

• Product Positioning is marketing’s job here

 Speed as a Factor in New-Product Success

• Time to Market- important high tech items
• Fast Prototyping – do it, try it, fix it
• Parallel Development – Gantt chart usage
To Review: The New Product Process
 Product

A
A product
product is
is aa good,
good, service,
service, oror idea
idea
consisting
consisting of
of aa bundle
bundle of
of tangible
tangible and
and
intangible
intangible attributes
attributes that
that satisfies
satisfies
consumers
consumers and
and isis received
received inin exchange
exchange
for
for money
money oror some
some other
other unit
unit of
of value.
value.
 Product Line

A
A product
product line
line is
is aa group
group of
of products
products that
that
are
are closely
closely related
related because
because they
they satisfy
satisfy aa
class
class of
of needs,
needs, are
are used
used together,
together, are
are sold
sold
to
to the
the same
same customer
customer group,
group, are
are
distributed
distributed through
through thethe same
same type
type of
of
outlets,
outlets, or
or fall
fall within
within aa given
given price
price range.
range.
 Product Mix

The
The product
product mix
mix is
is the
the number
number of
of
product
product lines
lines offered
offered by
by aa company.
company.
 Consumer Goods

Consumer
Consumer goods
goods are
are products
products purchased
purchased
by
by the
the ultimate
ultimate consumer.
consumer.
 Business Goods

Business
Business goods
goods are
are products
products that
that assist
assist
directly
directly or
or indirectly
indirectly in
in providing
providing
products
products for
for resale.
resale. Also
Also called
called as
as B2B
B2B
goods,
goods, industrial
industrial goods,
goods, or
or organizational
organizational
goods.
goods.
 Business Goods

Business
Business goods
goods are
are products
products that
that assist
assist
directly
directly or
or indirectly
indirectly in
in providing
providing
products
products for
for resale.
resale. Also
Also called
called as
as B2B
B2B
goods,
goods, industrial
industrial goods,
goods, or
or organizational
organizational
goods.
goods.
 Services

Services
Services are
are intangible
intangible activities
activities or
or
benefits
benefits that
that an
an organization
organization provides
provides to
to
consumers
consumers inin exchange
exchange for
for money
money or or
something
something else
else of
of value.
value.
 Idle Production Capacity

Idle
Idle production
production capacity
capacity occurs
occurs when
when
the
the service
service provider
provider is
is available
available but
but there
there
is
is no
no demand.
demand.
 New-Product Process

The
The new-product
new-product process
process consists
consists of
of
seven
seven stages
stages aa firm
firm goes
goes through
through to
to
identify
identify business
business opportunities
opportunities and
and
convert
convert them
them toto aa salable
salable good
good or
or service.
service.