Developing Effective Products and Services

New or Just Improved? Airbags (cars) Scanning Equipment For stores CD’S Nissan Titan Internet iPhone Scientists and Researchers develop new products. Many ideas come from consumers that use the products and have improvements they would like to see. Artificial Hearts Flat Screen TV Kennel Inn Target My Shirt

Marketing Research Finding solutions to problems through carefully designed studies involving consumers.

Steps in Marketing Research Define the Marketing Problem Study the situation Develop a data collection procedure Gather and analyze information Propose a solution Primary Research – gathering information to use to solve a current problem. Secondary Research – using data gathered for another porpose to solve a new/different issue.

Activity Issue: A top athletic shoe manufacturer finds out that is it ranked in the top 5 for people over 25, but that it is not ranked in the top 5 for people under 25. How can this manufacturer (using the 5 steps in Marketing Research) plan a way to improve its ranking among the younger people?

Types of Research Studies Surveys Focus Groups Observation Experiment Surveys – Most common, set of questions, sent through the mail/ internet/ phone. Focus Groups – less structured, small number of consumers take part in a group discussion, finds areas of agreement and disagreement. Observation – record the actions of consumers instead of asking questions. Product Design Teams may observe the product in use, to make design improvements. Experiment – presenting 2 carfully controlled alternatives to subjects in order to determine which is preferred/ has better results. (2 different sizes, coupons, etc.)

Marketing Mix – 4 P’s All parts are very important! One more so that others – product If the products is not what you want – the other parts do not matter. Must carefully plan each product to best meet customer needs.

Parts of a Product Basic product – simplest form Product features – additions and improvements Options – choices in features Brand Name – unique identification Packaging – protection and security Guarantee/Warranty – build customer confidence Basic Products – This is not unique, and is usually available from several companies. Product features – a cell phone that also has built in digital camera, voice dialing, and web browser. Options – car – engine size, color, manual or auto insurance Brand Name – companies try make this memerable and have an appealing image Packaging – coffee canister – easy to pick up with one hand, easy way to provide information to help consumers make decisions Guarantee/Warranty – if the product does not meet the needs – the company will repair or refund $

New Product Planning is… Costly Several million dollars Time-Consuming Several years Lots of people Ideas, production, marketing, analyzing cost, forecasting sales

Steps in New Product Planning are… Idea Development Idea Screening Strategy Development Production and Financial Planning Limited Production and Test Marketing Full scale Production Idea Development – creative process, scientists, salespeople, employees, customer survey, focus groups, most ideas are to improve existing products Idea Screening – look closer at each idea to see if there is a demand for the product, are there other products? Reasonable cost? Legal and safe? Strategy Development – if the product appears to be workable then, need to develop a marketing strategy – begin to focus on target market, testing product on customers Production and Financial Planning – id’s the facilities, equipment, and peopl needed – then the cost of production determined to ensure a profit Limited Production and Test Marketing – Full scale production -

Services Activities that are consumed at the same time they are produced.

Products Services Tangible Intangible Inseparable Perishable Things you can see Things you can touch Intangible No physical form Inseparable Is used as it is being produced Perishable Cannot be stored for later Heterogeneous Differences is the quality of service Intangible – more difficult to market – customers cannot see if it will be what they need