상품개발 및 관리 (Developing & Managing Products) 영문 정리.

Developing & Managing Products

 

1. Product items, lines and mixes

- Product item : A specific version of a product that can be designated as a dictinct offering among an organization’s products.

- Product line : A group of closely related product items.

- Product mix : All the products an organization sells.

- Benefits from organizing related items into product lines

1) Advertising economies

2) Package uniformity

3) Standardized components

4) Efficient sales and distribution

5) Equivalent quality

- Product mix width : The number of product lines an organization offers.

- Product line depth : The number of product items in a product line.

- Firms increase the width of their product mix to manage market risk., to capitalize on establishes reputations.

(1) Adjustments to product items, lines and mixes

1) Product modifications : Changing one or more of a product’s characteristics.

- Quality modification : Change in a product’s dependability or durability.

- Functional modifications : Change in a product’s versatility, effectiveness, convenience or safety.

- Style modifications : Aesthetic product change, rather than a quality or functional change.

- Planned obsolescence : The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.

2) Product line extensions : Adding additional products to an existing product line in order to compete more broadly in the industry.

 

(2) Product line contraction

1) Three main benefits

- Resources become concentrated on the most important products.

- Managers no longer waste resources trying to improve the sales and profits of poorly performing products.

- New product items have a greater chance of being successful because more financial and human resources are available to manage them if total profitability has not been reduced.

 

2. Product life cycles

- A concept that provides a way to trace the stages of a product’s acceptance, from its introduction to its decline.

(1) Introductory stage : The full-scale launch of a new product into the marketplace.

Product strategy : Limited number of models; frequent product modifications

Distribution strategy : Distribution usually limited, depending on product; intensive efforts and high margins often needed to attract wholesalers and retailers.

Promotion strategy : Develop product awareness; stimulate primary demand; use intensive personal selling to distributors use samples and coupons for consumers.

Pricing strategy : Prices are usually high to recover development costs.

 

(2) Growth stage : The second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies mat start acquiring small pioneering firms and profits are healthy.

Product strategy : Expended number of models; frequent product modifications.

Distribution strategy : Expanded number of dealers; intensive efforts to establish long-term relationships with wholesalers and retailers.

Promotion strategy : Stimulate selective demand; advertise brand aggressively.

Pricing strategy : Prices begin to fall towards end of growth stage as result of competitive pressure.

 

(3) Maturity stage : A period during which sales increase at a decreasing rate.

Product strategy : Large number of models.

Distribution strategy : Extensive number of dealers; margins declining; intensive efforts to retain distributors and shelf space.

Promotion strategy : Stimulate selective demand; advertise brand aggressively; promote heavily to retain dealers and customers.

Pricing strategy : Prices continue to fall.

 

(4) decline stage : A long-run in sales.

Product strategy : Elimination of unprofitable models and brands.

Distribution strategy : Unprofitable outlets phased out.

Promotion strategy : Phase out all promotion.

Pricing strategy : Prices stabilize at relatively low level; small price rises are possible if competition is negligible.

 

3. The importance of new products

- New products ar important to sustain growth and profits to replace obsolete items.

 

4. Categories of new products

- New product : Product new to the world, the market, the producer, the seller or some combination of these.

New to the world products : These products create an entirely new market.

New product lines : These products allow the firm to enter an established market.

Additions to existing product lines : This category includes new products that supplement a firm’s established line.

Improvements or revisions of existing products : The ‘new and improved’ product may be significantly or slightly changed.

Repositioned products : These are existing products targeted at new markets or market segments.

Lower-priced products : This category refers to products that provide performance similar to competing brands at a lower price.

 

5. The new-product development process

 

(1) New-product strategy : Linking the new-product development process with the objectives of the marketing department, the business unit and the corporation.

(2) Idea generation

Sources of ideas

Product development

The two considered most useful for generating new-product ideas

 

(3) Idea screening : The first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new-product strategy or are obviously inappropriate for some other reason.

 

(4) Business analysis : The second stage of the screening process where preliminary figures for demand, cost, sales and profitability are calculated.

 

(5) Development : Stage in the product development process in which a prototype is developed and a marketing strategy is outlined.

 

(6) Test marketing : The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.

 

(7) Commercialization : The decision to market a product.

 

6. The spread of new products

 

(1) Diffusion of innovation

Innovators : The first 2.5%. Being adventurous.

Early adopters : The next 13.5%. The respect of others.

Early majority : The next 34%. Deliberateness.

Late majority : The next 34%. Scepticism.

Laggards : The final 16%. Tradition

(2) Product characteristics and the rate of adoption

Complexity : The degree to difficulty involved in understanding and using a new product.

Compatibility : The degree to which new product is consistent with existing values and product knowledge, experience and current needs.

Relative advantage : The degree to which a product is perceived as superior to existing substitutes.

Observability : The degree to which the benefits or other results of using the product can be observed by others and communicated to target customers.

Trialability : The degree to which a product can be tried on a limited basis.

(3) Marketing implications of the adoption process

Word-of-mouth communication : Opinion leaders discuss new products with their followers and with other opinion leaders. Therefore marketers must ensure that opinion leaders have the types of information desired in the media they use.

Marketing communication : Information passed on from marketers to the public, including consumers, via a range of promotional activities. Marketers must use different appeals to those messages directed towards each categories of adopters.