product development
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Product Development. Chapter 30 and 31. Product/Service Management. Overseeing the design and development of new products Benefits to us? New and improved products on the market More choices to pick from. Things to consider when designing a product. 1. The cost to design the product - PowerPoint PPT PresentationTRANSCRIPT
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PRODUCT DEVELOPMENT
Chapter 30 and 31
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PRODUCT/SERVICE MANAGEMENT Overseeing the design and development
of new productsBenefits to us?
New and improved products on the market More choices to pick from
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THINGS TO CONSIDER WHEN DESIGNING A PRODUCT 1. The cost to design the product
2. Will you have a marked for the product?
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PRODUCT MIX All of the different products that a
company makes or sells. Example: Nike sells clothes, shoes, sports
products
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WHAT PRODUCT MIXES SHOULD YOU CARRY? Objectives of the business –
Carry a variety of products that will make our business a profit
Image the business wants to project -Trendsetting, fashion-conscious, expensive,
low-price
Market business is trying to reach –Kids, teens, Generation X, Baby Boomers
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PRODUCT LINE A group of closely related products
manufactured and/or sold by a businessExamples:
Frito Lay makes Ruffles, Doritos, Tostitos
Cereals produced by Kelloggs: Frosted Flakes, Corn Pops
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PRODUCT ITEM Is a specific model, brand, or size of a
product within a product line
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REASONS COMPANIES DELETE PRODUCT LINES Obsolescence (changing interests and
technology) Loss of appeal – consumer tastes
change Conflict with company objectives Replace with new products – limited
shelf space Lack of profit Conflict with other product lines –
competing with own brands not good
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INTRODUCTION STAGE OF PRODUCT LIFE CYCLE Product first introduced Focus on promotion and production Draw attention to the product Least profitable stage of life cycle
because of costs being so high to promote/make
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GROWTH – PRODUCT LIFE CYCLE Increasing sales and profits Most knows about and buys the product Competition starts offering products to
compete Advertising focuses more on customer
satisfaction
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MATURITY STAGE Sales level off or slow down Product has highest level of competition Most of target market owns product Most of advertising is fighting off
competition
Nintendo Wii
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DECLINE STAGE Sales fall Profit may be smaller than costs May sell or license the product Discount the product
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POSITIONING PRODUCTS Price and quality – economy line, mid-
priced line, and luxury line based on how they want to be viewed
Features and benefits – Rockport positioned as comfortable shoes (features/benefits)
Competition – How is my product better than theirs
Relation to other products in line – Crayola came out with a washable marker/crayon to go along with the rest of their product line
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BRANDS Can be a name, term, design, symbol
that identifies a business or organization and its productsExamples are Coca Cola, McDonalds,
Microsof A brand name is the word, group of
words, letters or numbers representing a brand that can be spokenExamples are: Mountain Dew, SnackWells,
Honda Accord
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BRANDS (CONTINUED) A brand mark is the part of the brand
that is a symbol or mark – known as a logoExamples:
Trade name – identifies the company or division of a particular corporationExamples are: Dell, Kellogg’s and Xerox
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TRADE CHARACTER Trade character is a brand mark with a
human form or characteristics
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TRADEMARKA trademark is a brand name, brand mark, trade name, trade character, or a combination that is given legal protection by the federal government
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PACKAGING Two main purposes for protection and
promotion
Promoting and selling the product – make packages attractive, colorful and artistic
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PACKAGING Ease of use – consider the way the
consumer uses the product
Providing information: Information about its contents, calories, guarantees, nutritional value and potential hazards
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SAFETY Products come in plastic containers
instead of glass now Drugs and food items are in tamper
resistant containers with sealed lids and blisterpacks
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HANDLING Prevent tampering while on display Use bubble wrap/packing paper to keep
product from breaking
Environmental packaging – packaging that is reusable, recyclable, safer, and less wasteful
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MANUFACTURER BRAND Also known as producer brands – owned
by manufacturers Generate the majority of sales Identify a given product Indicate a standard quality and priceAppeal to customers who want consistent
quality, dependable performance, and status Examples: Kraft, General Electric, Heinz, Keebler
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INFORMATION ON A PRODUCT LABEL Brand name Logo Ingredients Directions Special promotional messages Weight Expiration dates
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PRIVATE DISTRIBUTOR BRANDS Also known as store or private brands
Owned by wholesalers and retailersAppeal to customers who want quality and
performance at a lower priceCan generate a higher profit marginLead to customer loyalty
Examples: Sears Kenmore and Craftsman brands
Kroger brand of products Great Value – Wal-Mart
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GENERIC BRANDS Does not carry a company or brand
namePackaging only has a description of the
productOften priced 30-50% lower than other
manufacturer brandsPriced 10-15% below private distributor
brandsNot heavily advertised or promoted
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LABELING LAWS Name and address of manufacturer has
to be on the label Quantity of the contents must be on
label Product weight has to be listed in
traditional American weights and metric weights
Some countries require that labeling is bilingual
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FDA LAWS State amount of calories Percentage of daily intake of calories Fat, carbohydrates, sodium, etc.
Contents Health warnings: Such as women who
are pregnant should not drink alcoholic beverages due to increase risk of birth defects
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FEDERAL TRADE COMMISSION Care labeling rules: information about
the care of garments related to washing, drying, and ironing.
Environmental information about recyclable contents
Ozone safe information
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AGENCIES THAT REGULATE PRODUCTS/BUSINESSES Better Business Bureau – Help customers to
work with businesses to resolve complaints(you can call them to file a complaint)
BBB of Lexington, KY - Principles for Trust Consumer Product Safety Commission –
work with businesses on unsafe products in the marketplace (do recalls on products)
CPSC Home Page | cpsc.gov Federal Trade Commission –
Prevent unfair pricing practices Investigations of false advertising
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DIFFERENCE BETWEEN WARRANTIES AND GUARANTEES? Warranty – is a promise or guarantee,
given to a customer that a product will meet certain standards (given a time period)6 month warranty on IPhone
Guarantees – Used in promotional phrases such as “money back guaranteed”, “satisfaction guaranteed”