PRODUCT DEVELOPMENT SERM #50 PRODUCTS Tangible Good Baseball Intangible Service Watching a professional baseball game Consumer good Purchased and used by consumer for personal use Business good Purchased by organization for their use PRODUCT LINE & ITEM • Product line • All Nike shoes • Product item • Specific model • Size of a product CORE V. ANCILLARY • Core Product: • Main product • i.e. Sports event, Movie, Stage Show, Book • Ancillary Product: • A product related to or created from the core product • i.e. Movie-based Roller Coaster, Movie on DVD PRIMARY FUNCTIONS OF MARKETING • Sports Products • Entertainment Products SPORTS PRODUCTS • the goods and services designed to provide benefits to a sports spectator, participant or sponsor THE SPORTS PRODUCT • Licensed merchandise • Participation • Promotional items • Sports facilities • Entertainment • Marketing research • Equipment and apparel • Management services THE SPORTS PRODUCT ENTERTAINMENT PRODUCT • The entertainment industry’s top revenue producing products and services THE ENTERTAINMENT PRODUCT • Film & Cinema • Video Games • Television • Theme Parks • Music & Concerts • Publications • Radio • Newspapers • Books • Magazines PRODUCT DEVELOPMENT • Step 1: SWOT Analysis • Strength, Weaknesses, Opportunities, Threats • Helps develop a product to match company objectives • Step 2: Idea Generation • Generating new product ideas • Consumers, employees, research and development submit ideas • Study the competition • i.e. Nike studies New Balance youth baseball cleats and creates their own Nike version of the cleat • Step 3: Screening and Evaluation • Product idea is evaluated: • Is the necessary technology is available? • Does it meet the objectives of the company? • Focus Group – group of 6-10 consumers who discuss the product PRODUCT DEVELOPMENT • Step 4: Business Analysis • Financial aspects are reviewed • What is needed to take this product to the market? • What legal factors need to be analyzed? • Copyright, patented products • Step 5: Development • Prototype – first model of product • Test product capabilities to determine production cost • Technical problems, quality, and safety addressed PRODUCT DEVELOPMENT • Step 6: Test Marketing • Product tested in marketplace • Offer product for sale in small geographic area • Test all aspects of Marketing Mix • Product, Place, Price, Promotion • Not all products go through this step because of cost • Step 7: Commercialization • Commercialization – process that involves producing and marketing a new product • Offered for sale in marketplace to final consumer • Full-scale production launches • Product Life Cycle begins CONCLUSION • Tangible vs. Intangible • Product line vs. Product item • Core Product vs. Ancillary Product • 7 steps of Product Development: • • • • • • • SWOT Analysis Idea Generation Screening & Evaluation Business Analysis Development Test Marketing Commercialization VIDEO EXAMPLE • http://blog.ted.com/2013/11/21/a-littlebit-rock-nroll-reggie-watts-rocks-the-newly-launched-synthkitand-electronic-music-goes-mini-modular/ • http://www.ted.com/talks/ayah_bdeir_building_blo cks_that_blink_beep_and_teach#t-305134 CLASS ACTIVITY • With a partner, design a new product for a SER industry: • Take the product through EACH stage of product development. • 7 steps of Product Development: • • • • • • • SWOT Analysis Idea Generation Screening & Evaluation Business Analysis Development Test Marketing Commercialization • Explain why the company would want to introduce your new product. • Be specific in your explanation. • You must include a prototype of your product.