This document summarizes key concepts around developing and managing goods and services from a marketing textbook. It outlines strategies for managing existing products such as line extensions and product modifications. It also describes the new product development process as a seven phase approach from idea generation to commercialization. Additionally, it discusses differentiating products through quality, design, and support services as well as product positioning and repositioning. The document also briefly touches on product deletion and the characteristics of services as well as organizing teams to develop products.

1. Source: Marketing, 2013 ed. (Ferrell, Hult, & Pride) v3.0 Prepared by: Acidera, Jaypaul O.
YPRIMAR – CHAPTER 5: DEVELOPING AND MANAGING GOODS AND SERVICES
MANAGING EXISTING PRODUCTS
A. Line extension – development of a product that is closely related
to existing products in the line but meets different customer
needs
B. Product modification – change in one or more characteristics of a
product
 Quality modifications – changes relating to a product’s
dependability and durability
 Functional modifications – changes affecting a product’s
versatility, effectiveness, convenience or safety
 Aesthetic modifications – changes to the sensory appeal of a
product
DEVELOPING NEW PRODUCTS
New-product development process – a seven-phase process for
introducing products
1. Idea generation – seeking product ideas to achieve objectives
2. Screening – choosing the most promising ideas for further review
3. Concept testing – seeking potential buyers’ responses to a
product idea
4. Business analysis – evaluating the potential contribution of a
product idea to the firm’s sales, costs and profits
5. Product development – determining if producing a product is
technically feasible and cost effective
6. Test marketing – introducing a product on a limited basis to
measure the extent to which potential customers will actually buy
it
7. Commercialization – deciding on full-scale manufacturing and
marketing plans and preparing budgets
PRODUCT DIFFERENTIATION THROUGH QUALITY, DESIGN, AND
SUPPORT SERVICES
Product differentiation – creating and designing products so that
customers perceive them as different from competing products
A. Product quality – characteristics of a product that allow it to
perform as expected in satisfying customer needs
• Level of quality – the amount of quality a product possesses
• Consistency of quality – the degree to which a product has the
same level of quality over time
B. Product design – how a product is conceived, planned, or
produced
• Styling – the physical appearance of a product
Product features – specific design characteristics that allow a
product to perform certain tasks
C. Customer services or support services – human or mechanical
efforts or activities a that add value to a product
PRODUCT POSITIONING AND REPOSITIONING
Product positioning – creating and maintaining a certain concept of a
product in customers’ minds
Perceptual maps – are created by questioning a sample of consumers
about their perceptions of products, brands, and organizations with
respect to two or more dimensions
BASES FOR POSITIONING:
A. Use competitors
 Head-to-head competition
 Avoiding competition
B. Price
C. Quality level
D. Benefits provided by the product
Repositioning – may strengthen a brand’s market share and
profitability which can be accomplished by:
 Physically changing the product
 Changing the price
 Changing distribution
 Changing image through promotional efforts
 Aiming product at a different target market
PRODUCT DELETION
Product deletion – eliminating a product from the product mix, usually
because it no longer satisfies a sufficient number of customers
Three basic ways to delete a product:
1. Phase-out – allows the product to decline without a change in the
marketing strategy; no attempt is made to give the product new
life
2. Run-out – exploits any strengths left in the product
3. Immediate drop – the best strategy when losses are too great to
prolong the product’s life
SIX BASIC CHARACTERISTICS OF SERVICES
1. Intangibility – a service that is not physically and cannot be touch
2. Inseparability of production and consumption
• Inseparability – being produced and consumed at the same
time
3. Perishability – the inability of unused service capacity to be
stored for future use
4. Heterogeneity – variation in quality
5. Client-based relationships – interactions that result in satisfied
customers who use a service repeatedly over time
6. Customer contact – the level of interaction between provider and
customer needed to deliver the service
CREATING MARKETING MIXES FOR SERVICES
A. Development of services
• Core service – is the basic service experience or commodity
that a customer expects to receive
• Supplementary service – is a supportive one related to the core
service that is used to differentiate the service bundle from that
of competitors
B. Pricing of services – most revenues are brought in during peak
demand
 Peak demand – the point in time where some services are very
time-sensitive because a significant number of customers
desire the service at a particular time
C. Distribution of services – many firms have changed a high-contact
service into a low-contact one
D. Promotion of services – typically includes tangible cues that
symbolize the service
ORGANIZING TO DEVELOP AND MANAGE PRODUCTS
Product manager – the person within an organization responsible for a
product, a product line, or several distinct products that make up a
group
Brand manager – the person responsible for a single brand
Market manager – the person responsible for managing the marketing
activities that serve a particular group of customers
Venture team – a cross-functional group that creates entirely new
products that may be aimed at new markets