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LEARNING OBJECTIVES
LO 8-2 Define the characteristics of a product.
LO 8-4 Understand the life of a product and how product strategies change over time.
LO 8-6 Understand the new product development process.
LO 8-7 Identify how new products become diffused in a market.
CHAPTER OUTLINE
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ii. Essential Benefit
iii. Core Product
B. Product Classifications
i. Tangibility – Physical Aspects of The Product
Experience
a. Consumer Goods
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b. Business Goods
C. Product Discrimination: Create a Point of
Differentiation
i. Form
v. Durability
vi. Reliability
vii. Repairability
viii. Style
D. Product Plan: Moving from One Product to Many
Products
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E. Product Decisions Affect other Marketing Mix
Elements
i. Pricing
II. THE LIFE OF THE PRODUCT: BUILDING THE
PRODUCT EXPERIENCE
A. Product Life Cycle Sales Revenue and Profitability
B. Product Life Cycle Timeline
C. Product Life Cycle Caveats
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ii. Customer’s Perspective
B. Reasons For New Product Success or Failure
A. Identify Product Opportunities
i. Generate New Ideas
a. Internal
b. External
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C. Develop The Product Opportunity
i. Develop The Product
V. CONSUMER ADOPTION AND DIFFUSION PROCESS
A. Consumer Product Adoption Process
VI. SUMMARY
KEY TERMS
product Anything that delivers value to satisfy a need or want and includes physical
merchandise, services, events, people, places, organizations, information, even ideas..
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stock keeping unit (SKU) Unique identification numbers used in tracking products through a
distribution system, inventory management, and pricing.
essential benefit The fundamental need met by a product.
core product The physical, tangible elements that make up a product’s essential benefit.
durable product Products with a comparatively long product life that are often expensive.
convenience goods Frequently purchased, relatively low-cost products for which customers have
little interest in seeking new information about or considering other product options.
shopping goods Products that require consumers to do research and compare across product
dimensions like color, size, features, and price.
specialty goods Unique products in which consumers’ purchase decision is based on a defining
characteristic.
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durability The projected lifetime of the product under specific operating conditions.
reliability The percentage of time a product works without failure or stoppage.
market penetration Attractive price point to gain market share and discourage competitors.
market skimming High initial price point targeting less price-sensitive consumers to recoup
R&D costs before competitors enter market.
new-to-the-world product A new product that has not been available before.
upgrades or modifications to existing products A new product that represent incremental
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innovation diffusion process How long it takes a product to move from first purchase to last
purchase (the last set of users to adopt the product).
APPLICATION QUESTIONS
1. You are a marketing manager for Starbucks. Describe the following as it relates to the
product experience at Starbucks: essential benefit, core product, and enhanced product.
Now imagine you are the marketing manager for Aquafresh Extreme toothpaste. Describe
the product experience in terms of essential benefit, core product, and enhanced product.
Starbucks essential benefit: beverage products for consumption
Starbucks core product: high-end coffee and related beverages
2. Choose two comparable phones from Samsung and Microsoft/Nokia and examine each
product. How does the product form differ between the two products? How are they the
same? Now consider the features of the two products. What features are unique to each
phone? Which phone, overall, appeals to you most and why?
The following is an example:
1
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Samsung Galaxy Note 8 Nokia 8
Dimensions 162.5 x 74.6 x 8.5mm 151.5 x 73.7 x 7.9mm
Display
6.3in Quad HD+ Super AMOLED,
2960x1440 Infinity Display (18.5:9 Aspect Ratio)
5.3in IPS LCD 1440 x 2560 (@554ppi)
Processor
Qualcomm Snapdragon 835 (10nm) octa-core CPU
OR Samsung Exynos 8995 (10nm) octa-core CPU –
region dependent
Adreno 540 (Qualcomm Snapdragon) OR ARM
Mali-G71 (Samsung Exynos) – region dependent
Software Android Nougat Android Nougat
Connectivity
4G LTE, Wi-Fi, Bluetooth, Type-C USB, NFC,
GPS, Fingerprint scanner, Iris Scanner, Face
Scanner
4G LTE, Wi-Fi, Bluetooth, Type-C USB, NFC, GPS,
Fingerprint scanner
Storage 64GB, 128GB or 256GB – region dependent 64GB/128GB
MicroSD Yes Yes
Primary Camera@60fps
Dual-12MP, f/1.7 and f/2.4 apertures, 1/2.3″ sensor
size, 1.55µm pixel size, Dual-Pixel Phase Detection
Autofocus, OIS, 2x optical zoom, touch focus,
face/smile detection, Auto HDR, panorama, 2160p
video @30fps, 1080p video @60fps
@30fps, 1080p video @30fps
8MP with autofocus, f/1.7 aperture, Auto HDR,
1440p video @30fps
Dual-13MP Carl Zeiss, f/2.0 apertures, 1.12µm pixel
size, hybrid laser & phase detection autofocus, OIS,
dual-LED flash, geo-tagging, touch focus, face
detection, HDR, panoramic capture, 2160p video
3. One of the most difficult characteristics of a product to define is style. You are the marketing
manager for Cadillac; define the product style for an Escalade. Compare and contrast that
with product style for Chevrolet Tahoe (another large SUV built on the same platform as the
Escalade).
The Escalade is known for its over-the-top styling. The following is from the GM website:
2
A statement too powerful to ignore. An expression of ambition on the grandest scale. This is
the 2018 Cadillac Escalade, where unmatched refinement, extraordinary comforts and an
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The Tahoe has a much more subdued style when compared to the Escalade.
4. You are the marketing manager for Coca-Cola products in the United States. Describe the
product line for Coke-branded products and briefly describe how each product differs from
the other products in the Coke brand product line.
Current product line for Coke branded products:
Launched
Discontinued
1886
1984
1985
5. Motorola is introducing a new phone that incorporates Internet surfing capability using new
LTE technology, a GPS program, and other new features that will greatly expand the features
available on a cell phone. Develop a marketing strategy for the launch of the new product.
The company that takes the risk and introduces a new product, creating a new product
category, is called the Pioneer. The essential marketing objective during the introduction
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Marketing Communications – Motorola’s first objective is to inform and educate the target
audience about the phone’s benefits, characteristics and features. As part of this educational
process, it may be necessary to alleviate customer anxiety and help them understand the
MANAGEMENT DECISION CASE
Reaching Millennials through New Product Innovation at Campbell’s Soup
This case provides an opportunity to elaborate on two important Product Management
principles: New Product Development and the Product Life Cycle. It also is a good case for
discussion of generational marketing and the need to understand the unique preferences of an
important target market.
For at least a couple of more years, college classes will largely consist of students who belong to
the millennial generation, so students can speak from firsthand experience about their food
product preferences. A discussion of this case could start with asking students if they eat canned
Questions for Consideration
1. In what category of the Product Life Cycle is Campbell’s soup products? Can a company’s
product be in one stage of the PLC while the industry category is in another?
This is a good opportunity to discuss the imperfections of the PLC as a planning tool. The
lines between stages are often blurred and the stage for a particular product is often
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understood only in hindsight. Marketers can also impact the position in the PLC through
2. Beyond product innovation, what other parts of the Campbell’s marketing mix could be
adjusted to try to get millennials to grab their soup spoons?
Promotion can be used to move Millennials toward more favorable attitudes about soup.
Potentials strategies include using sports figures or other opinion leaders in commercials,
doing lifestyle advertising that shows millennials enjoying soup, expanding engagement with
3. Campbell’s expanded their offerings through both their own R&D and by acquiring other
companies and their products. What are the pros and cons of these two options? Which
should be their focus going forward?
Managers (both within Marketing and other departments) are frequently faced with “make
or buy” decisions. Some pros and cons of the two approaches to new product creation:
Develop via R&D:
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Develop through Acquisition:
• Brings fresh talent/thinking into the company
• Brings existing customers
4. Since consumer research shows a clear preference among millennials for foods other than
soup, should Campbell’s slowly abandon soup in favor of other alternatives or continue to try
to reinvigorate the soup product line?
Some students will conclude that soup is just a dieing product class and should therefore be
abandoned now in favor of other alternatives, such as those Campbell’s has been
introducing. This would be a good point at which to discuss the size of the soup market
4
. As
reported in the Statista database, in 2016:
SUGGESTED VIDEO
BMW: “Newness” and the Product Life Cycle (11:02 minutes)
Description: BMW’s key to success is the manner in which they manage their product’s life
cycle. They are able to keep all of their lines new and competitive in each individual sector.
Explanation of BMW’s PLC is discussed.
1. What are the risks BMW faces as it continues to add new cars to its product line?
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As BMW adds cars to its lineup, it will continue to add the need for more and more
resources. Each vehicle would require its own marketing mix and the means to carry it out.
3M’s Post-it Flag Highlighter: Extending the Concept! (7:40 minutes)
Description: The NPD process is discussed using a new product that 3M has introduced: the Flag
Highlighter.
1. What are some of the top issues 3M should consider in developing the Flag Highlighter?
Critical unmet need – How bad do Students want this product?
Market size – How many students would be willing to purchase the highlighter?
GoPro: Making All of Us Heroes with Exciting New Products (8:01 minutes)
Description: This video discusses the product development process of GoPro, a company
committed to developing products that meet the needs of its customers across the globe.
GoPro’s very first product was inspired by the need to capture the experience of surfing
without holding a camera in your hands. GoPro’s customers are passionate people who use
GoPro technology to document their everyday and once-in-a-lifetime experiences.
1. Define GoPro’s product in terms of the essential benefit and core product. How does an
understanding of the essential benefit drive product development for a company like GoPro?
What kind of enhanced products could GoPro offer to add to the consumer’s experience with
their products?
The essential benefit is the ability to take high definition photos and videos while engaging in
adventurous activities, without having to hold the camera with your hands. GoPro (and
some students) might describe the core product as “making all of us heroes”, but a more
helpful description would be “enabling visual storytelling about the adventures of our lives.”
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