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What is a Product?
A Product is anything that can be offered to a market for attention, acquisition, use, or consumption and
that might satisfy a want or need. (Product: a need-satisfying offering of a firm.)
Includes:
1. Physical Objects
2. Services
3. Events
4. Persons
5. Places
6. Organizations
7. Ideas
8. Combinations of the above
Consumer-Goods Classification
2. Shopping Goods
1.Convineance Goods Buy less frequently
Buy frequently & immediately Gather product information
Low priced Fewer purchase locations
Many purchase locations Compare for:
Includes: Suitability & Quality
Staple goods Price & Style
Impulse goods
Emergency goods
4. Unsought Goods
3. Specialty Goods New innovations
Special purchase efforts Products consumers don’t want
Unique characteristics to think about.
Brand identification Require much advertising &
Few purchase locations personal selling
1
Product Line Decisions
Product Line Length
Number of Items in a Product Line
Stretching Filling
Lengthen beyond Lengthen within
current range current range
Downward
Two-Way
Upward
Product Mix
differe
produ
Width
numb
lines
er of
nt
ct
-
Consistency
Length
numbe
within
all the
Produ
produ
ct Mix
offere
- total
items
lines
lines
r of
the
ct
d
-
numbe
versio
produ
Depth
ns of
each
r of
ct
Product-Line Length
2
1. Line Stretching
1. Downmarket
2. Upmarket
3. Two-way
2. Line Filling
3. Line Modernization
4. Line Featuring & Line Pruning
Protection
Climate
Transport & Handling
Buyer's slow usage
rate
Lack of storage
facilites
Promotion Legal Constraints
3
1. Self-service
2. Consumer affluence
3. Company & brand image
4. Opportunity for innovation
Labels
1. Promote
2. Describe
3. Indentity
Idea Generation
Local subsidiaries are likely to have some ideas from their respective markets and new technology is a
common source of new product ideas
Preliminary Screening
The most immediate evaluation of an idea is whether it is compatible with the company objectives,
strategies, and resources.
Concept Research
Focus Groups offer the development team a chance to hear spontaneous reactions to a new concept
and hear suggestions for improvement.
Concept Testing
A more formal approach to selecting product attributes is using techniques such as trade-off analysis
or conjoint analysis
Sales Forecast
The appropriate sales forecast approach is based on the product life cycle
Test Marketing
Once the sales forecast looks promising, the new product is usually placed in production and test
marketed.
4
“64 ideas make one successful product”
Number of
surviving
new
product
ideas
Sales
Idea Preliminary Concept Test
forecastin
generation screening research marketing
(leading markets) (focus groups, g
concept testing)
Alternative Strategies
Alternative Strategies
• Compatibility – can the product be used in terms of local infrastructure & customs?
1. Waterfall Strategy
product is introduced into foreign markets one at a time (IPLC model approach)
Useful when:
1. lifecycle of product is long
2. high fixed costs of entry into individual markets
3. foreign markets are not equally developed
4. some customization is needed
5. firms have little foreign experience
6
2. Sprinkler Strategy
simultaneous introduction of the product in multiple markets
Useful when:
1. short product life cycle
2. high R&D costs in product development
3. competition is very strong (pre-emption of markets)
4. firms have existing presence in target countries
5. homogenized preferences
Cobranding
A strategic alliance where two or more brands are combined in an offer.
Brand strategy decisions
Use of the corporate name
Family brands for a wide product line
Individual brands for each item in the product line
Private (store) branding
Umbrella branding with the intermediary’s name
Separate brand names
7
International Product life cycle