1. Section 5.1
Product Design

2. Product Defined Can be tangible or intangible
Essential component of the marketing mix
Products can be goods or services

3. Product Item and Line
Product Item: Specific model or size of a product
Nike Air Flight Shoe is a product item
Nike Air athletic shoes are product line

4. Product Classification
Consumer Goods: purchased and used by the ultimate consumer for personal use
Business Goods: purchased by organizations for use in their operation
Depending on the intended use of the product, the same product could be both a consumer good and a business good

5. Example Purchase Nike shoes in retail store
Shoes considered a consumer good
Retail store buys Nike shoes from outlet
Shoes considered a business good
You buy from outlet and they are a consumer good

6. Point of Difference
Organizations design their products to make them stand out in the market place
They need to have a point of difference
A unique product characteristic or benefit that sets the product apart from a competitor’s product
Product planning is crucial to the success of a product

7. Steps in New Product Development
Step 1: SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Step 2: Idea Generation
New ideas come from many sources
Consumers
Employees
Research and Development
The competition

8. Steps in New Product Development
Step 3: Screening and Evaluation
Evaluation and screening of the new product
Focus Group
Panel of 6-10 consumers who discuss their opinions about a topic under the guidance of a moderator
Moderator asks specific questions to get the panel members to talk about their ideas and opinions
Step 4: Business Analysis
Financial Aspects of making and marketing the product are assessed

9. Steps in Product Development
Step 5: Development
Development of actual product
Prototype: the first model of the product
Companies test its production capabilities to see if the product can be produced at a reasonable cost
Step 6: Test Marketing
Product is tested in the market place.
Product is offered for sale in a small geographic area
Marketers test all aspects of the marketing mix during this step (product, place, price and promotion)

10. Steps in Product Development
Step 7: Commercialization
A process that involves producing and marketing a new product
The company offers the product in the marketplace for sale to the final consumer
Regional rollouts: involve launching a new product in certain geographic areas over a set time period