Chapter 14,
15, 13 & 16
Product & Marketing
• Chapter 14: Developing & Pricing Products &
Services
– Covers Design & Cost
• Chapter 15: Distributing Products
• Chapter 13: Marketing
– Covers Overview, Design, & Segmentation
• Chapter 16: Promotions
– Covers Advertising, Marketing, & Branding
Chapter 14,
15, 13 & 16
Product & Marketing Myths
• Chapter 14
– “Developing & Pricing Goods & Services”
– No one in business calls them ‘goods’-they’re products
• Cost-base pricing
–
–
–
–
Does not exist in a totally free market
Exist in government procurement & oligopolies
Supply & Demand will typically determine price
Cost will determine profit margins
• Product development is chaotic
– Does not flow in a straight line as shown in the book
• Product life-cycle is uncertain
– even if it makes the light of day
Chapter 14,
15, 13 & 16
Product & Marketing
• Almost all businesses started with a need
– Small or large determines the size and success
• To define a business, product, or service ask
– What problem are you trying to solve?
• If you can think of a product or service that does
not exist, 99% of the time it has already been
thought of. The reason why it does not exist
– Not sustainable (solution cost more than problem)
– Technology does not exist or not advanced
– Therefore . . . .
Chapter 14,
15, 13 & 16
Product & Marketing
• Most business compete against existing
solutions by
– Building on top of an existing market (distribution)
– Trying to find an edge or difference (segmentation)
– Using technology or patents (cost or design)
– Holding secret knowledge/design (Coca-Cola, JackBox, KFC,)
– Branding (fast foods & fashion)
Chapter 14,
15, 13 & 16
Five Components of Developing &
Marketing Products or Services
•
•
•
•
•
Cost
Design
Distribution
Brand
Segmentation
Chapter 14,
15, 13 & 16
Cost
5 Product Market Components
Design
420 Distribution
354 (Selling)
Technology
Patent
386 Packaging (form 411)
Commodity 358 Product Design 406 Intermediaries
353 Production
Product Diff
411 Delivery (time)
Efficiency
Design-cost
411 Location (place 359)
Design-Appeal
- Wholesale
- Retail
- On-line
Catalogs
Tele-marketing
355
Customer
Direct
367
Relations 446 Personal Selling
421 Supply Chain
- Logistics
- Shipping
- Storage
25%
3%
60%
387 Brand
354 (Concept)
Product Diff
381 Product Mix
Product Offerings
359 Promotion 455
440 Ad-Cool Effect
453 Anti-Ad (WOM)
Fashion
450 Public Relations
4%
367
Segmentation
380 Total Prod Offer
396 Pricing (359)
Preservation
Leasing
411 Possession
8%
Chapter 14,
15, 13 & 16
Market Research
• Collecting Data, problems with
– Solutions cost more than the price
– Technology not feasible
– The Ford Dilemma – “If I asked what my
customers wanted they will tell me a faster horse”
• Design Research