S E R M # 5 0

PRODUCT DEVELOPMENT

PRODUCTS

TangibleGood

Baseball

IntangibleService

Watching a professional baseball game

Consumer goodPurchased and used by consumer for personal use

Business goodPurchased 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

• Entertainment

• Equipment and apparel

• Promotional items

• Sports facilities

• Marketing research

• Management services

THE SPORTS PRODUCT

ENTERTAINMENT PRODUCT

• The entertainment industry’s top revenue producing products and services

THE ENTERTAINMENT PRODUCT

• Film & Cinema

• Television

• Music & Concerts

• Radio

• Video Games

• Theme Parks

• Publications • 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-n-roll-reggie-watts-rocks-the-newly-launched-synthkit-and-electronic-music-goes-mini-modular/

• http://www.ted.com/talks/ayah_bdeir_building_blocks_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.