Product Development Product Planning Making decisions about the
Product Development
Product Planning • Making decisions about the production and sale of a business’s products. Relates to packaging, labeling, warranties, guarantees, branding and product mix
Product Mix • All the different products that a company makes or sells. Includes: product items, product lines, product width and product depth • EX. Proctor and Gamble: hand soaps, body lotions, dish detergents, laundry detergents, shampoos, etc. • Ex. Mc. Donalds: Burgers, Chicken, Salads, Sides, Drinks, Desserts, etc
Product Line • Group of closely related products manufactured/sold by a business – All the car models produced by Ford – Cereal products of Kellogg’s – Cake mixes of Pillsbury • Retailers often sell more than one product line
Product Item • Specific model, brand or size of a product within a product line – Kellogg’s Cereal – Frosted Flakes, Corn Puffs, Special K, Apple Jacks, Pops, Fruit Loops, etc
Product Width • Refers to the number of different product lines a business/manufacturer sells – Kellogg’s: Cereal, Cereal Bars, Egg-os, Drinks – Pillsbury: Biscuits, Cookies, Cake Mix, Frosting, etc.
Product Depth • Refers to the number of different product items offered within each product line – Pillsbury Cakes: Chocolate, Yellow, Confetti, Carrot, German Chocolate, Strawberry, etc.
Steps of Product Develoment 1. Generating Ideas 2. Screening Ideas 3. Developing the Product – Prototype!! 4. Testing the Product/Prototype – Test Market 5. Introducing the Product 6. Evaluating Customer Acceptance
Product Expansion • Product Extension: Introduces a different variation of the “ORIGINAL” product – Hershey’s Hugs is an extension of Kisses • Builds on product/company image • Increases sales/profits • Appeals to new markets
Product Modification • An alteration in a company existing product. May offer in new and different varieties, formulas, colors, styles, and sizes – Hershey’s Kisses with Almonds,
Delete a Product is Obsolete – Cassette Player Product has lost its appeal – Trendy Product doesn’t match company objectives To make room for other products/Shelf Space • No longer PROFITABLE • Product conflicts with other product in the same product line • • – P&G White Cloud vs. Charmin
Product Life Cycle • Represents the stages that a product goes though in its life • Fours Stages: – – Introduction Growth Maturity Decline
Introduction • • • Focus in on promotion and production Major goal to draw the customer’s attention Least profitable
Growth • • • Increasing sales and profits Much of the market knows of the product and buys it Ads are focused on customer satisfaction rather than benefits Competition Present Modification for new models or improvements may become necessary
Maturity • • • Sales level off and slow down More Competition and market already owns product Money spent fighting competition, especially in ads
Decline • • Sales fall Profits may be smaller than costs Management must decide how to or how long to support the product Drop, sell, recommit, modernize, alter, discount or regionalize
Product Positioning • Refers to the effort a business makes to identify, place and sell its products in the marketplace. • The image that is attached with the product
• Product Life Cycle – – • Product Mix – – • • • Introduction Growth Maturity Decline Product item Product Line Product Depth Product Width Product Expansion Product Modification Product Deletion Create a WEB
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