PowerPoint Slides to accompany Rix Marketing: A Practical Approach 7e

• Core product = ability to satisfy wants1. Can capture memories2. Opportunity for self-expression• Actual product

= what it is and does1. Well-made2. Light and stylish3. Attractive packaging

What is a Product?

Rix Marketing: A Practical Approach 7e Next: Classifying Consumer GoodsChapter Seven: Product Planning and Development Learn more on pages 239 – 241

• Augmented product = extras1. Brand status and retailer reputation2. Before and after-sales service3. Warranty

Rix Marketing: A Practical Approach 7e Next: Classifying Consumer GoodsChapter Seven: Product Planning and Development Learn more on pages 242 - 246

Classifying Consumer GoodsCategorising products can help guide product management strategies

• Convenience goods1. Groceries, snack foods, socks/undies, stationary2. Low unit value3. Usually frequently purchased4. Low involvement in brand or price comparison5. Substitute readily accepted

All elements of the marketing mix are important, but which of the

four Ps is critical for convenience goods?

Place (distribution): because if our brand is not on the shelf, the

consumer will readily accept a substitute.

Rix Marketing: A Practical Approach 7e Next: Classifying Consumer GoodsChapter Seven: Product Planning and Development Learn more on pages 242 - 246

Classifying Consumer Goods

• Shopping goods1. White goods, most cars, furnishings, clothing2. Higher unit value3. Less frequently purchased4. Consumer compares price and other features

Which element(s) of the four Ps is critical if we are marketing

shopping goods?

Price: because consumers shop around for the best deal, and

Promotion: especially combined manufacturer and retailer

promotions

Rix Marketing: A Practical Approach 7e Next: Classifying Consumer GoodsChapter Seven: Product Planning and Development Learn more on pages 242 - 246

Which element of the four Ps is critical if we are marketing

specialty goods?

Product: because the quality, style or brand is what has made

the product a sought-after specialty good

• Specialty goods1. Luxury items, specialty stereo, unique cars2. Usually high unit value3. Very high involvement in purchase4.Very high brand or outlet loyalty

Classifying Consumer Goods

Rix Marketing: A Practical Approach 7e Next: Classifying Business GoodsChapter Seven: Product Planning and Development Learn more on pages 242 - 246

Classifying Consumer Goods

Which element of the four Ps is critical if we are marketing

unsought products?

Promotion: because consumers are either unaware of the

product or don’t actively seek it out.

• Unsought goods1. Consumer is not aware of product, or2. Consumer has to be shown the need

Rix Marketing: A Practical Approach 7e Next: Classification of ServicesChapter Seven: Product Planning and Development Learn more on pages 246 - 250

Classifying Business Goods

• Raw materials• Fabricating materials and parts• Installations• Accessory equipment• Operating supplies

Each of these also has some relevance for B2B marketing

strategy (See Table 7.1)

Rix Marketing: A Practical Approach 7e Next: Developing New ProductsChapter Seven: Product Planning and Development Learn more on pages 250 - 251

Classification of Services

• B2B v B2C• Extent of physical good involved• Capital investment required • Delivery method• Degree of customer involvement

Each of these is relevant for services marketing strategy (See

also Chapter 9)

Rix Marketing: A Practical Approach 7e Next: New Product Adoption and DiffusionChapter Seven: Product Planning and Development Learn more on pages 252 - 259

Developing New Products

Identify the

strategic role of

the new products

1. Idea generation

2. Screening and evaluation of ideas

3. Business analysis

4. Product prototype development

5. Test marketing 6. Commercialisation

CONCEPT TESTING

Rix Marketing: A Practical Approach 7e Next: Stages in the Adoption ProcessChapter Seven: Product Planning and Development Learn more on page 260

New Product Adoption and Diffusion

1. Stages consumers go through in adopting a new line

2. Types of consumers who adopt new products early or late

3. Factors affecting the adoption rate of a new product

Success with a new line is more likely if three aspects of the adoption process are

understood

Rix Marketing: A Practical Approach 7e Next: Adopter CategoriesChapter Seven: Product Planning and Development Learn more on page 260

Stages in the Adoption Process

1. Awareness

2. Interest

3. Evaluation

4. Trial

5. Adoption

6. Post-adoption confirmation

Consumer is exposed to the new line

Consumer looks for information

Consumer compares the new line to alternatives

Consumer buys one or tries a sample

Consumer buys on a regular basis

Consumer looks for re-assurance in ads or others’ opinions

Rix Marketing: A Practical Approach 7e Next: Innovations Can Have Different Adoption RatesChapter Seven: Product Planning and Development Learn more on page 261

Adopter Categories

Consumers adopt products at different stages of its life cycle.

Marketers target early groups who ‘educate’ other consumers.

Innovators(very small group)

Early adopters

Early majority

Late majority

Laggards

Innovations Can Have Different Adoption Rates

Rix Marketing: A Practical Approach 7e Next: Factors Affecting the Adoption RateChapter Seven: Product Planning and Development Learn more on page 261

Rix Marketing: A Practical Approach 7e Next: Product Life CycleChapter Seven: Product Planning and Development Learn more on pages 260 -263

Factors Affecting the Adoption Rate

Why the difference in adoption rate?

• Relative advantage• Compatibility• Complexity• Ability to trail• Ability to observe

50% market penetration in

2 years

50% market penetration in

20 years

Rix Marketing: A Practical Approach 7e Next: Planned ObsolescenceChapter Seven: Product Planning and Development Learn more on pages 263 269

Product Life Cycle

Introduction• Costs high, sales low• Gaining distribution is key task• High risk of product failure

Growth• Sales increasing• Competition increases• Competitive promotion is key task

Maturity• Sales slow• Margins fall• ‘Extra reason to buy’ product improvement and promotion is key task

Decline• Consider deletion• Cost control is key task

Rix Marketing: A Practical Approach 7e Next: Five Minute Quiz Chapter Seven: Product Planning and Development Learn more on pages 270-271

Planned Obsolescence

Planning for a product to ‘die’ is a controversial aspect of product management. Two types of obsolescence:

1. Technological or function obsolescence

• New materials• Miniaturisation• Improved functions

2. Fashion or style obsolescence

• Shapes• Colours• Superficial improvements

Five Minute Quiz

1. List three categories each of consumer goods and business goods

2. List the steps for developing a new product3. List the stages in the new product adoption

process4. List five factors than can affect the

adoption rate for a new product5. Briefly outline the stages in the

product life cycle

Rix Marketing: A Practical Approach 7e Chapter Seven: Product Planning and Development