1. 12 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-1 Product and Service Strategies

2. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-2 C HAPTER O BJECTIVES 1. What are products and services? What are their categories? 2. How do firms manage all of their products and services? What are the steps in the best development process for new products? 3. What is the product life cycle, and how is it used?

3. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-3 O BJECTIVE 1 What are products and services? What are their categories?

4. DEFINEDDEFINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-4 Products are items consumed for personal or business use. Services are activities that deliver benefits to consumers or businesses.

5. EXPLAINEDEXPLAINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-5 P RODUCTS Product GoodService TangibleIntangible

6. EXPLAINEDEXPLAINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-6 D ISTINCTIONS OF A S ERVICE Intangible Inseparable Perishable Variability

7. EXPLAINEDEXPLAINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-7 G OODS – S ERVICES C ONTINUUM Hair Brush Haircut Hair Transplant Pure Good Pure Service Hybrid

8. APPLIEDAPPLIED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-8 L EVELS OF P RODUCT Core Benefits Actual Product Augmented Product Brand Name Attributes Packaging Style Design Delivery Financing Service Warranty Customer Support

9. APPLIEDAPPLIED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-9 C ONSUMER P RODUCT C LASSIFICATIONS Shopping Specialty Unsought Convenience

10. APPLIEDAPPLIED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-10 I NDUSTRIAL P RODUCT C LASSIFICATIONS MRO Products Processed Materials and Services Components Equipment Raw Materials

11. APPLIEDAPPLIED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-11 N EW P RODUCT D EVELOPMENT Idea Generation Idea Screening Concept Development Business Analysis Market Testing Commercialization

12. APPLIEDAPPLIED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-12 T YPES OF N EW P RODUCTS Cosmetic (Incremental) Context (New Direction) Concept (Breakthrough) Web 1.0  2.0iPod/iTunes PC, Airplanes

13. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-13 O BJECTIVE 2 How do firms manage all of their products and services? What are the steps in the best development process for new products?

14. DEFINEDDEFINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-14 A Product Portfolio is the collection of all products and services offered by a company.

15. THINK ABOUTITTHINK ABOUTIT Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-15 S ONY U.S. P RODUCT P ORTFOLIO ComputerCameras Televisions Theatre Portable Electronics Sony Pictures Games VAIO -Notebook -Desktop Digital home Disc burner Location free Mylo Software Cyber-shot Alpha SLR Handycam Printers Digital picture frames Photo services Televisions Home theatre systems Blu-ray disc DVD players Home audio components Walkman Video MP3 Rolly Reader digital book Sony cell phone GPS Movies -Theatre -DVD -Blu-ray Television -Comedy -Drama -Daytime -Cartoons Music PlayStation -PS3 -PS2 -Portable

16. APPLIEDAPPLIED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-16 S ONY U.S. P RODUCT P ORTFOLIO Product Mix Width Product Mix Depth

17. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-17 O BJECTIVE 3 What is the product life cycle, and how is it used?

18. DEFINEDDEFINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-18 The Product Life Cycle is a model describing the evolution of a product’s sales and profit throughout its lifetime.

19. EXPLAINEDEXPLAINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-19 P RODUCT L IFE C YCLE

20. EXPLAINEDEXPLAINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-20 I NTRODUCTION S TAGE Sales Volume Low Product Features Basic Retail Outlets Limited Marketing Goal Trial

21. EXPLAINEDEXPLAINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-21 G ROWTH S TAGE Sales Volume Growing Product Features Increasing Retail Outlets Increasing Marketing Goal Preference

22. EXPLAINEDEXPLAINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-22 M ATURITY S TAGE Sales Volume Flat Product Features New Retail Outlets Maximum Marketing Goal Preference

23. EXPLAINEDEXPLAINED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-23 D ECLINE S TAGE Sales Volume Declining Product Features Reduced Retail Outlets Reduced Marketing Goal Survival

24. APPLIEDAPPLIED Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-24 D IFFUSION OF I NNOVATION Innovators Early Adopters Early Majority Late Majority Laggards 2.5% 13.5%34% 16%

25. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-25 V ISUAL S UMMARY

26. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall12-26 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.