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D174 Module 7
Product strategy
| Term | Definition |
|---|---|
| Product | anything that delivers value to satisfy a need or want and includes physical merchandise, services, events, people, places, organizations, information, even ideas |
| Stock-Keeping Unit (SKU) | unique identification number used to track a product through a distribution system, inventory management, and pricing. |
| Essential benefit | fundamental need met by the product |
| Core Product | Companies translate the essential benefit into physical, tangible elements |
| Enhanced product | extends the core product to include additional features, designs, and innovations that exceed customer expectations |
| Tangibility | physical aspect of a product i.e. they can be touched like a bottle of shampoo |
| Durability | references the length of product usage |
| Nondurable products | consumed in a few uses and, in general, cost less than durable products. Examples of consumer nondurables include personal grooming products such as toothpaste, soap, and shampoo, |
| Durable products | Longer product life and are often more expensive. Consumer durables include microwave ovens, washer/dryers, |
| Convenience goods | Frequently purchased, relatively low-cost products for which customers have little interest in seeking new information or considering other options and rely heavily on prior brand experience and purchase behavior |
| Shopping goods | Products that require consumers to do more research and compare across product dimensions such as color, size, features, and price |
| Specialty goods | unique purchase made based on a defining characteristic for the consumer. |
| Unsought goods | products that consumers do not seek out and, indeed, often would rather not purchase at all. Insurance, particularly life insurance, is not a product people want to purchase. |
| Business Goods | Materials, Parts, MRO (Maintenance, Repair, Operating supplies, Capital goods |
| How do companies create points of differentiation? | Form, Features,Performance quality, Conformance quality, Durability, Reliability,Repairability,style. |
| Product line | group of products linked through usage, customer profile, price points, and distribution channels or needs satisfaction. |
| Product Mix | Combining all the products offered by a company |
| Product Life Cycle | Companies create, launch, and transform products as market conditions change over time. This product evolution is referred to as the product life cycle (PLC) |
| Stages in PLC or Product Life Cycle | life of a product has four basic stages: introduction, growth, maturity, and decline |
| Fad | come and go quickly, often reaching only a limited number of individuals but creating a lot of buzz in the marketplace. Women’s fashion is seasonal, with a product line being introduced in the spring and declining by winter |
| Objective of Introduction phase | Build market awareness for the product leading to trial purchase. |
| Objective of Growth phase | Differentiate product from those of new competitors, promoting rapid expansion. |
| Objective of Maturity phase | Transition product from high growth to sales stability. |
| Objective of Decline stage | Determine the future of the product. |
| New to the world products | a product that has not been available before or bears little resemblance to an existing product, and one type of new product |
| What are three major activities in new product development? | (1) identify product opportunities, (2) define the product opportunity, and (3) develop the product opportunity. |
| Innovation diffusion process | How long it takes a product to move from first purchase to last purchase (the last set of users to adopt the product) |
| What are the five stages before adopting a product: | Awareness, Interest, Evaluation, Trial, Adoption |
| Types of consumers in the Consumer Adoption chart | Innovators, Early adopters, Early Majority, Late Majority, Laggards |
| Innovators | Product enthusiasts enjoy being the first to try and master a new product. Consumers can do Beta testing and represent a good source of feedback late in the product development process or early in the product launch phase. (2.5%) |
| Early Adopters | Product opinion leaders seek out new products consistent with their personal self-image. Not price-sensitive, willing to pay the price premium for a product, demand a high level of personalized service and product features. (13%) |
| Early Majority | Product watchers want to be convinced of the product’s claims and value proposition before making a commitment. This group is considered critical to long-term success as they take the product into the mainstream.(34.5%) |
| Late Majority | Product followers are price-sensitive and risk-averse. They purchase older-generation or discontinued models with lower prices and fewer product features. (34%) |
| Laggards | Product avoiders want to evade adoption as long as possible. Resistant to change, they will put off the purchase until there is no other option. (16%) |
Created by:
mkale
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