MT 219 Marketing Unit Five New Product Development And Services Note: This seminar will be recorded by the instructor.

Review of Unit 4 How did Unit 4 go? Questions or concerns? Instructor suggestions for Unit 5- Positioning part of unit helpful for your Unit 7 Research Project Use your book and notes when working on assignments and the reviews. This is an open-book class. That is, you can use your book, notes and other references to help you with answering the questions for each assignment, as well as the reviews.

New Product Development Process Idea Generation – ideas come from many sources Idea Screening – need to avoid “go” or “no go” error Concept testing – iterative process of consumer feedback Business Analysis – what is the potential for sales, costs, and profits? Product Development – lengthy and expensive Test Marketing – realistic settings Commercialization – when, where, and how

Capitalizing on Existing Products Line Extensions- can be simple or complex Product Modifications -Quality -Function -Aesthetics

Differentiating Products Quality – level and consistency Design and Style Features Customer support Hopefully develop a USP- Unique Selling Proposition

Positioning Where a product lives in a consumers mind relative to competition Can be measured through perceptual mapping and gap analysis Important- This is a perception or feeling of consumer- not important what a marketer thinks it is.

Bases for Positioning Benefits Features Toward competition- amount of distance in consumer’s mind Away from competition- Same as above Into another category-Oatmeal as cholesterol reducer and not hearty cereal User- Remember those variables? Lifestyle- Again, those variables.

Repositioning Can be based on features, product modification, market change, function, etc. Must be done very carefully or customers will be lost- New Coke Examples of successes- Arm & Hammer Baking Soda Johnson & Johnson Baby Shampoo

Services Intangible products involving a deed, performance, or effort that cannot be physically possessed -Haircuts -Concerts -Tax preparation -Annual doctors’ physicals

Characteristics of Services Intangibility Inseparability Perishability Heterogeneity/variability of delivery Customer involvement in service production- part of inseparability Let’s look at these individually

Issues related to service intangibility Difficult for customers to evaluate No physical possession Difficult to advertise and display Pricing is problematical and subjective Service process not always protected by patents

Issues related to service perishability Services cannot be stored or inventoried Unused capacity is lost forever Demand may be time sensitive Balancing supply and demand is difficult

Issues related to heterogeneity Quality difficult to control Standardization is a problem Services vary from provider to provider Services can vary from the same provider Reputation is crucial Franchises try to emphasize service homogeneity Reason for grading rubrics

Issues related to service inseparability Does not allow for mass production Customer participation required Other customers can affect process Difficult to distribute

Any Questions? Thank you for attending! See you next week! Instructor will post the link to the recording of tonight’s seminar in the course Announcements.