182 CHAPTER 7 INTRODUCINGANDMANAGINGTHEPRODUCT
Summary
Theabilityoftheorganizationtoconsistentlyproducenewproductsandeffectivelymanageexist-
ingproducts looms asoneofthemostimportant and difficulttasksfacedby thecompany. This chap-
terprovidesanoverviewofthecomponents thatconstitutea product,andtheproductplanningprocess.
Theprocessbeginswiththetaskofdefiningthe product.Inordertoprovideanaccuratepor-
trayaloftheproduct, itisimportanttoconsider theperspectiveoftheconsumer, themanufacturer,
andthevariouspublics.Allthreeperspectivesmustbeunderstoodandsatisfied. Inad dition, thethree
componentsof theproductarediscussed.Thecoreproductidentifieswhattheconsumerexpectswhen
purchasing theproduct.Thetangibleproductisreflectedinits qualitylevel,feature~,brandname,
styling, andpackaging.Theaugmentedproductis reflectedbytheservicessupportingthecore/tan-
gible product.Thepromisedproductsuggesbwhatthe productdeliversinthelong term.
Therearealsoseveral classificationschemesthatareusefulinimprovingourunderstanding
oftheproductintothreecategories:convenience,shopping, andspecialty.Aconveniencegoodis one
that requiresa minimumamountofeffOltonthepartoftheconsumer.Incontrastconsumerswani
tobeabletocompareproducts categorizedasshoppiflggoods. Specialtygoodsaresounique, at least
fromtheperspectiveoftheconsumer,thattheywill gotogreatlengthstoseekout andpurchasethem.
Anotherrelevant classificationscheme;hasbeenappliedtobusinessgoods.Tlu'eecharacteris -
ticsofbusinessproducts are:(1)demandis derivedfrompLlfchaseofanotherproduct,(2)demand
Lendstobeprice-inelastic. and(3)tendencytowardpurecompetition. Business productsareclassi-
fiedasextractiveproductsandmanufacturedproducts.
Goodsproductsversusserviceproductsisthe finalcategurization.Althoughthereis stillcon-
troversyaboutthe va li dityofthisseparation,wecontendthatthedifferencesjustifyadjustmentsin
themarketingstrategy forservice products.Services areintangible, requiresimultaneousproduction
andconsumption,cannotbe easilystandardized, andrequirehighconsumerinvol vement.
ThischaptercontinueswiLl1a discussionoftheproductplanningprocess.Threeelementswere
delineated:(1)thedeterminationofproductobjective, (2) theidentificationandresolutionoffactors
thathavean impacton theproduct,ano(3)thedevelopmentofprogramsappropriateforthatpar-
ticularproduct.Examplesofproductobjectives, aswellas a discussionoftheimportanceofprod-
uct objectives, areprovided.Thethirdelementofprogramdevelopmentprovidesthebasisforthe
two chaptersthatfollow.Thecontinuingdevelopmentofsuccessfulnewproduct loomsasthemost
important factorinthesurvivalofthefirm.This chapterintroduce~theconceptof"new" productas
wellastheprocessofactuallyproducinga newproduct.
It i s notedthatwhatconstitutes a newproduct mustbeappraisedfromboththeconsumer's
pointofviewaswellasthatofthemanufacturer.Intheformer case,newnessis measured inrespect
to:(I)degreeofconsumptionmodificationand(2)theextentofnewtas!:experience.Thefirmdefines
theproduct intermsof:(1)changesinthemarketingmi):.,(2)modifications,(3)differentiation,and
(4)diversification.
Newproductscanbeacquiredfromseveralinternalandex ternalSOlu ces.The firmcanemploy
basicresearch,appliedresearch,anddevelopmenttodevelopnewproducts.Ortheycanusetheexter-
nalroute: mergersandacquisitions,licensesandpatents,andjointventures.
Marketer' s Vocabulary
Product Anything,eithertangibleorintangible,offeredbythefirmasa solutiontotheneedsand
wantsoftheconsumer, that is profitableorpotentiallyprofitableandmeets therequirementsofthe
variouspublicsgoverning orinfluencing society.
Consumergoods ProductspurchasedforpersonalconsumptionwithnointentionofseIFngto
others.
Industrialgoods Productspurchasedbyanindividualororganizationinordertomodifythe
productordistribute it fora profit.
