MKTG 181 Chapter 10: Developing New Products and Services
Terms in this set (3)
The various terms that pertain to products and services
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 something else of value.
A GOOD has tangible attributes that a consumer's five senses can perceive and intangible ones such as warranties; a laptop computer is an example. Goods can also be divided into NONDURABLE GOODS, which are consumed in one or a few uses, and DURABLE GOODS, which usually last over many uses.
SERVICES are intangible activities or benefits that an organization provides to satisfy consumer needs in exchange for money or something else of value, such as an airline trip.
An IDEA is a thought that leads to a product or action, such as eating healthier foods, a concept for a new invention, or getting people out to vote
Throughout this book, PRODUCT generally includes not only physical goods but services and ideas as well. When PRODUCT is used in its narrower meaning of "goods," it should be clear from the example or sentence
Identify the ways in which consumer and business products and services can be classified
BY TYPE OF USER, the major distinctions are CONSUMER PRODUCTS, which are products purchased by the ultimate consumer, and BUSINESS PRODUCTS, which are products that assist an organization in providing other products for resale
CONSUMER PRODUCTS can be broken down based on the effort involved in the purchase decision process, marketing mix attributes used in the purchase, and the frequency of the purchase:
1) CONVENIENCE PRODUCTS: are items that consumers purchase frequently and with a minimum shopping effort
2) SHOPPING PRODUCTS: are items for which consumers compare several alternatives on selected criteria
3) SPECIALTY PRODUCTS: are items that consumers make special efforts to seek out and buy
4) UNSOUGHT PRODUCTS: are items that consumers either do not know about or do not initially want
BUSINESS PRODUCTS can be broken down into:
1) COMPONENTS: which are items that become part of the final product, such as raw materials or parts
2) SUPPORT PRODUCTS: which are items used to assist in producing other goods and services and include installations, accessory equipment, supplies, and industrial services
SERVICES can be classified in terms of whether they are delivered by:
1) People or equipment,
2) Business firms or nonprofit organizations, or
3) Government agencies
Firms can offer a range of products, which involve decisions regarding the product item, product line, and product mix
Explain the significance of "newness" in new products and services as it relates to the degree of consumer learning involved
From the important perspective of the consumer, "newness" is often seen as the degree of learning that a consumer must engage in to use the product. With CONTINUOUS INNOVATION, no new behaviors must be learned. With DYNAMICALLY CONTINUOUS INNOVATION, only minor behavioral changes are needed. With a DISCONTINUOUS innovation, consumers must learn entirely new consumption patterns.