Transcript Chapter 5: Product Developmen

Chapter 5
Product Development
Mr. Raposo
King City Secondary School
Game Plan
 Presentations (retail websites)
 Its not easy being green!
 Natureanthem
 Toyota Prius-HybridSynergy Drive
 Chapter 5.1 handout
 Bombardier-discussion & question #2
 Chapter 5 PowerPoint
Chapter Overview
 5.1 Marketing and Product Development
 5.2 Invention of Innovation?
 5.3 The Stages of Product Development
 5.4 Product Development & Utility
 5.5 Product Development & the Marketing
Concept
5.1 Marketing and Product
Development
 2 questions asked before developing a product:
 “Can we produce it?” (Production) and “Can we sell it?”
(Marketing)
 Marketers use the production data to develop a price
strategy, then research the competitive market to
develop positioning strategies, distribution channels and
promotional plans
 Product development is ongoing and major marketing
activity
 Feasibility study – a study used to determine if any
business opportunity is possible, practical, and viable
 All businesses use a feasibility study before developing a
new product or a new business venture
5.2 Invention of Innovation?
 Invention – new devices, methods or processes
developed from study and experimentation,
done to meet consumer needs
 Innovation – is a product or service that uses
new technology, items, or processes to change
the methods used to produce products or to
change the ways used to distribute them
 - Inventors tend to sell or license their ideas to
others who how to develop products for the
marketplace
5.3 The Stages of Product
Development
1.
2.
3.
4.
Idea Generation –
brainstorming whether an
innovation or invention is to be
done
Idea Screening – Not all ideas
good, need to look at each idea
to see if it is worthwhile
Concept Development –
Designing of a prototype
(sample of what the product
might look like), market tested
Market Strategy – Use previous
observations or conducting new
market research
5. Feasibility Study – Looking at
the features and design of the
product that the consumers want,
materials determine the price, and
calculate costs to determine
products
6. Product Design – Looks at
market preferences, versatility,
and the extras that are needed
7. Test Marketing – Test
acceptance of the product, if
positive will launch product, if not,
will make the necessary changes
8. Market Entry – Product enters
the product life cycle, and the
consumer determines how long
the product lasts on the market
5.3 The Stages of Product Development
Market
Entry
Test
Marketing
Product Design
Feasibility Study
Market Strategy
Concept Development
Idea Screening
Idea Generation
5.4 Product Development & Utility
 Product Development and Utility
 Utility – What is added to a product to
make it valuable to the market, and which
influences the value equation
5.4 Product Development & Utility
 Form Utility – relationship between a product or services form and its





function, referring to the look, the function, scent, flavour, colour, design and
packaging
Function – what product is intended to do, form follows function since what
the product is meant to do will often dictate what it looks like
Information Utility – provides consumers with instructions, directions, and
user manuals, usually delivered by advertising and from others
Place Utility – makes it possible for the consumer to purchase the product,
the easier the product is to find, the more place utility it has. (I.e. having a
ski shop near a ski resort)
Time Utility – when the product or service is available when the consumer
wants it (i.e. having pumpkins for Thanksgiving and Halloween)
Possession Utility – easy to purchase, fairly reasonable in price (i.e.
providing credit to consumers, ease of use to purchase the product)
5.5 Product Development & the
Marketing Concept
 The marketing concept is the idea that
consumes and competitors should be
considered in every important business decision
 Product Mapping – conducting research to see
what consumers like and dislike about the
existing products and what is missing. Usually
involved is a group of products on a table and
ask research participants to group the items
using the most common factors that they
perceive.
5.5 Product Development & the
Marketing Concept
 Marketing Opportunity Analysis (MOA) –
situational analysis that defines opportunities or
market situations for a specific brand, with three
distinct parts.
 Overall Market – what all competitors are
 Indirect Competition - group the competitive brands
by features
 Direct Competition – identify all competitive brands
that compete for a share of the same market
 MP = N x P x Q (number of possible buyers X average
selling price X average number of items that are purchased
in a year)
5.5 Product Development & the
Marketing Concept
 - Need to do a cost-benefit analysis to
compare the estimated costs of an action
with the estimated benefits that are likely
or intended to produce
Homework
 Refer to website www.mrraposo.com