CHP 2

Marketing:
An Introduction
Armstrong, Kotler, Trifts,
Buchwitz, Gaudet
6th Canadian Edition
8-1 Copyright © 2017 Pearson Canada Inc.

CHAPTER
2
Developing
and
Managing
Products
and Services
8-2 Copyright © 2017 Pearson Canada Inc. 2

Chapter 8
Developing and Managing Products and Services
Chapter 2: Learning Outcomes

• 2.1 Examine the steps in the new product development
process.
• 2.2 Examine the factors contributing to a product’s failure.
• 2.3 Examine how new product development and product
modification affect an organization’s ability to remain
competitive.
• 2.4 Describe the product life cycle concept and relate a
marketing strategy to each stage.
• 2.5 Discuss the nature and significance of branding,
packaging, and warranties.
• 2.6 Identify the attributes of a successful brand name.

Chapter 8
What Is a Product?
Services Products
Intangible activities, Anything offered to a
benefits, or satisfaction market for attention,
that do not result in acquisition, use, or
the ownership of consumption that may
anything satisfy a want or need

Chapter 8
What Is a Product?
• Products are:
 Differentiated based on
experience(s) in
acquiring and using
them
 Evaluated at three
levels

Chapter 8
Product and Service Classifications
Consumer Industrial
Convenience Materials And Parts
Shopping Capital Items
Specialty Supplies And Services
Unsought

Chapter 8
New-Product Development Strategy

• New-Product Development:
 Development of original
products, improvements,
modifications, or new brands
 New product innovation is
expensive and risky
 Most new products fail or
underperform
 Diffusion of innovations
theory

Chapter 8
Technology Adoption Life Cycle

Chapter 8
The New-Product Development Process

• Major stages in new-product development:

Chapter 8
New-Product Development Process

Idea Generation:
• Internal sources: • External sources:

 Company Customers
employees at Competitors
all levels Distributors
and suppliers
• Crowdsourcing Others

Chapter 8

2. Idea Screening:
 Keep good ideas and drop poor ones
 Describe product, target market, and competition
 Estimate market size, price, development time and
costs, manufacturing costs, rate of return
 Evaluate new-product ideas against a set of company
criteria

Chapter 8
3. Concept Development and Testing:
Product concept: Concept testing:
• New-product idea • Testing new-product

stated in meaningful concepts with groups of
consumer terms potential consumers

Chapter 8
Concept Development and Testing

Chapter 8

4. Marketing Strategy Development: An initial
marketing strategy and a three-part marketing
strategy statement
 Describe the target market, planned value
proposition, sales, market share, and profit goals
 Outline the product’s planned price, distribution, and
marketing budget
 Describe the planned long-run sales and profit goals,
marketing mix strategy

Chapter 8

5. Business Analysis:
 Review of the sales, costs, and profit projections
 Positive review triggers
product development

Chapter 8
6.Product
Development:
 Develops concept
into a prototype
 Prototypes are
developed and
tested

Chapter 8

7. Test-Marketing:
 Product introduced into a realistic

market
 Gains experience prior to full

introduction
8. Commercialization:
 Full-scale introduction
into
the market

Chapter 8
Check Your Understanding

Go-No-Go Decisions
As a company moves through the product development process, it
becomes more and more invested in moving forward with the idea.
Each step requires more resources, and while focus is placed upon
ideas along the process, time and energy is lost on other ideas
which may have also been viable. It begs
the question as to which of the 8 steps in
the product development process is the
most pivotal.
Can any one of the steps be singled out as

the most important or does it depend on
the specific situation?

Chapter 8
Product Life Cycle

Chapter 8
Summary of Product Life Cycle

Characteristics, Objectives, and Strategies

Chapter 8
Styles, Fashions, and Fads

Chapter 8
Product and Service Decisions

• Product decisions:
 Physical attributes such
as quality and design
 Packaging
 Labelling
 Sustainable packaging
 Product support services

Chapter 8
Product and Service Decisions

• Product line decisions:
 Product line length
 Line filling or line stretching
• Product mix decisions deal with four dimensions:
 Width
 Length
 Depth
 Consistency

Chapter 8
International Product Marketing Decisions

• Consider the example where Kraft Foods adapted the
Oreo cookie for the Chinese market.
 Initially had the wrong segment
 Initially had the wrong flavour
 Packaging needed to be adapted

Chapter 8
What is a Brand?
• A brand is the image which stands behind the
name, symbol, icon, design, or combination of
these, that identifies the maker or marketer of a
product.
• Branding can add value to a product

Chapter 8
Brands
• More than names or symbols, brands:
 Have status and value
 Have personality
 Involve emotions
 Signify quality
 Provide legal protection

Chapter 8
Brand Meaning
• Branding expert Al Reis says that the key to communicating
brand meaning is to get consumers to associate your brand
with just one word, so that your brand “owns” that word in
terms of brand positioning.
Company Word
Volvo Safety
Coors Light Cold
Red Bull Extreme

Chapter 8
Brand Relationships
• Brands represent
consumers’
perceptions and
feelings about a
product and its
performance
• A key factor in
consumers’
relationships with
brands is what they
believe about them.

Chapter 8
People as Brands
People Are Also Brands

• Celebrities and politicians aim
to achieve brand power in their
name
• …. but personal brands (like
corporate brands) can be
damaged as quickly as they
were created

Chapter 8
Brand Equity & Personality

• Brand Equity:
 A financial value attributed to the brand based largely on intangible qualities
• Brand Personality:
 Human attributes and the emotions
they inspire toward customers
• Brands Elements:
 Name
 Logo or icon
(shape, colours, etc.)

Chapter 8
Branding Strategy
• Three main branding strategy decisions:
 Brand name selection
 Brand positioning
 Brand sponsorship
EXAMPLE:
MARKETING@WORK 9.2
Converse: An Old Brand with
a New Beginning

Chapter 8
Brand Strategy - Name
Distinctive Pronounceable
Great Brand
Product Names
related
Legally Extendable
clear

Chapter 8
Brand Strategy - Positioning
t
es Beliefs and
ng
Values
tro
-S
Desirable
ng
ro
Benefits
St
Product
Attributes

Chapter 8
Brand Strategy - Sponsorship
Products can be branded as:

• National brands: created and owned by producer
of product
 Samsung Galaxy/Kellogg’s Frosted Flakes
• Private brands: owned by the reseller of a product
 Shopper’s Life Brand/Superstore Joe Fresh

Chapter 8
Brand Stories
• Brands can be thought of as a form of storytelling.
• When brand managers tell stories about brands, the details

of character, place, and action embellish the basic
“information maps” we all keep in our heads.
• Psychologists refer to these information maps as schemas.
• Brand stories are an excellent strategy for inspiring

loyalty among consumers for a brand that might
otherwise go unnoticed

Chapter 8
Brand Stories
Brand stories:
Cavendish Farms tells
the story of its From
the Farm brand by
having real PEI
potato farmers
literally singing its
praises in a television
commercial.

Chapter 8
Branded Content and Branded Entertainment

• Branded Content (Content Marketing) is any form of
information or story written and produced by a brand
marketer, with the brand clearly and prominently featured.
 Globe & Mail – Sunnybrook Health Sciences Centre
• Branded entertainment is a form of entertainment,

usually video, that is created with the cooperation or
financial support of a marketer.
 BMW

Packaging
Label:
A printed
description of the
product on the
package.
Package:
The container or
wrapper for a
product.
38 Copyright © 2015 Pearson Canada Inc.
Functions of Packaging
• Protecting the product until
consumed.
• Storing the product until

consumed.
• Facilitating consumption of the

product.
• Promoting the product.
• Facilitating disposal of the

product.
39 Copyright © 2015 Pearson Canada Inc.

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Marketing:

6th Canadian Edition

8-1 Copyright © 2017 Pearson Canada Inc.

8-2 Copyright © 2017 Pearson Canada Inc. 2

Chapter 2: Learning Outcomes

8-3 Copyright © 2017 Pearson Canada Inc.

8-4 Copyright © 2017 Pearson Canada Inc.

8-5 Copyright © 2017 Pearson Canada Inc.

Product and Service Classifications

Convenience Materials And Parts

Shopping Capital Items

Specialty Supplies And Services

8-6 Copyright © 2017 Pearson Canada Inc.

New-Product Development Strategy

8-7 Copyright © 2017 Pearson Canada Inc.

Technology Adoption Life Cycle

8-8 Copyright © 2017 Pearson Canada Inc.

The New-Product Development Process

8-9 Copyright © 2017 Pearson Canada Inc.

New-Product Development Process

• Internal sources: • External sources:

8-10 Copyright © 2017 Pearson Canada Inc.

New-Product Development Process

8-11 Copyright © 2017 Pearson Canada Inc.

New-Product Development Process

3. Concept Development and Testing:

Product concept: Concept testing:

• New-product idea • Testing new-product

8-12 Copyright © 2017 Pearson Canada Inc.

Concept Development and Testing

8-13 Copyright © 2017 Pearson Canada Inc.

New-Product Development Process

8-14 Copyright © 2017 Pearson Canada Inc.

New-Product Development Process

8-15 Copyright © 2017 Pearson Canada Inc.

New-Product Development Process

8-16 Copyright © 2017 Pearson Canada Inc.

New-Product Development Process

 Product introduced into a realistic

 Gains experience prior to full

8-17 Copyright © 2017 Pearson Canada Inc.

Check Your Understanding

Can any one of the steps be singled out as

8-18 Copyright © 2017 Pearson Canada Inc.

Product Life Cycle

8-19 Copyright © 2017 Pearson Canada Inc.

Summary of Product Life Cycle

8-20 Copyright © 2017 Pearson Canada Inc.

Styles, Fashions, and Fads

8-21 Copyright © 2017 Pearson Canada Inc.

Product and Service Decisions

8-22 Copyright © 2017 Pearson Canada Inc.

Product and Service Decisions

8-23 Copyright © 2017 Pearson Canada Inc.

International Product Marketing Decisions

8-24 Copyright © 2017 Pearson Canada Inc.

8-25 Copyright © 2017 Pearson Canada Inc.

8-26 Copyright © 2017 Pearson Canada Inc.

8-27 Copyright © 2017 Pearson Canada Inc.