1. McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

2. Product A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value. 10-2

3. THE VARIATION OF PRODUCTS PRODUCT, PRODUCT LINE, AND PRODUCT MIX LO1  Product Line Product Line  Product Mix Product Mix Product Item Stock Keeping Unit (SKU) 10-3

4. THE VARIATION OF PRODUCTS CLASSIFYING PRODUCTS LO1  Type of User Consumer Goods Business Goods 10-4

5. THE VARIATION OF PRODUCTS CLASSIFYING PRODUCTS LO1  Degree of Tangibility Nondurable Goods Durable Goods Services 10-5

6. CLASSIFYING CONSUMER AND BUSINESS GOODS CLASSIFYING CONSUMER GOODS LO2  Convenience Goods Convenience Goods  Shopping Goods Shopping Goods  Specialty Goods Specialty Goods  Unsought Goods Unsought Goods 10-6

7. FIGURE 10-1 FIGURE 10-1 How a consumer good is classified affects what products consumers buy and the marketing strategies used 10-7

8. CLASSIFYING CONSUMER AND BUSINESS GOODS CLASSIFYING BUSINESS GOODS LO2  Derived Demand  Production Goods Production Goods  Support Goods Support Goods Supplies Industrial Services Installations Accessory Equipment 10-8

9. NEW PRODUCTS AND WHY THEY SUCCEED OR FAIL WHAT IS A NEW PRODUCT? LO3  Newness Compared with Existing Products  Newness in Legal Terms 10-9

10. NEW PRODUCTS AND WHY THEY SUCCEED OR FAIL WHAT IS A NEW PRODUCT? LO3  Newness From the Organization’s Perspective Product Line Extension Significant Jump in Innovation True Innovation 10-10

11. NEW PRODUCTS AND WHY THEY SUCCEED OR FAIL WHAT IS A NEW PRODUCT? LO3  Newness From the Consumer’s Perspective Continuous Innovation Dynamically Continuous Innovation Discontinuous Innovation 10-11

12. FIGURE 10-2 FIGURE 10-2 The degree of “newness” in a new product affects the amount of learning effort consumers exert to use the product 10-12

13. NEW PRODUCTS AND WHY THEY SUCCEED OR FAIL WHY PRODUCTS SUCCEED OR FAIL LO4  Marketing Reasons for New-Product Failures Insignificant Points of Difference Incomplete Market and Product Definition Before Product Development Starts  Protocol Protocol Too Little Market Attractiveness 10-13

14. NEW PRODUCTS AND WHY THEY SUCCEED OR FAIL WHY PRODUCTS SUCCEED OR FAIL LO4  Marketing Reasons for New-Product Failures Poor Execution of the Marketing Mix Poor Product Quality or Sensitivity to Customer Needs on Critical Factors Bad Timing No Access to Buyers 10-14

15. FIGURE 10-4 FIGURE 10-4 Stages in the new-product process 10-15

16. FIGURE 10-B FIGURE 10-B Strategic roles of most successful new products 10-16

17. THE NEW-PRODUCT PROCESS NEW-PRODUCT STRATEGY DEVELOPMENT LO5  New-Product Process New-Product Process SWOT Analysis  New-Product Strategy Development New-Product Strategy Development  Objectives: Identify Markets and Strategic Roles Environmental Scanning  Improve Innovation: Use Cross-Functional Teams 10-17

18. THE NEW-PRODUCT PROCESS IDEA GENERATION LO5  Idea Generation Idea Generation  Employee and Co-Worker Suggestions  Customer and Supplier Suggestions  R&D Breakthroughs  Competitive Products  Universities, Inventors, and Small Tech Firms 10-18

19. THE NEW-PRODUCT PROCESS SCREENING AND EVALUATION LO5  Screening and Evaluation Screening and Evaluation  External Approach  Internal Approach 10-19

20. THE NEW-PRODUCT PROCESS BUSINESS ANALYSIS AND DEVELOPMENT LO5  Business Analysis Business Analysis  Development Development 10-20

21. THE NEW-PRODUCT PROCESS MARKET TESTING LO5  Market Testing Market Testing  Test Marketing  Simulated Test Markets (STMs) 10-21

22. THE NEW-PRODUCT PROCESS COMMERCIALIZATION LO5  Commercialization Commercialization  Regional Rollouts 10-22

23. FIGURE 10-6 FIGURE 10-6 Marketing information and methods used in each stage of the new- product process 10-23

24. THE NEW-PRODUCT PROCESS COMMERCIALIZATION LO5  The Risks and Uncertainties Slotting Fee Failure Fee 10-24