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DEVELOPING NEW PRODUCTS AND SERVICES Layers of the Product Concept The Core Product Consists of all the benefits the product will provide for consumers or business customers A customer purchases a 1/2” drill bit. What does s/he want? A 1/2” hole! Marketing is about supplying benefits - not products. The Actual Product Consists of the physical good or delivered service that supplies the desired benefit Example: A washing machine’s core product is the ability to get clothes clean, but the actual product is a large, square, metal apparatus Actual product also includes appearance, styling, packaging, and the brand The Augmented Product Consists of the actual product plus other supporting features such as warranty, credit, delivery, installation, and repair service after the sale Classifying Products Shopping Products Good or service for which consumers will spend time and effort gathering information on price, product attributes, and product quality Consumers will tend to compare alternatives before making a purchase Types of shopping products attribute-based shopping products price-based shopping products Specialty Products Goods or services bought with much consumer effort in an extended problem- solving situation Consumers insist upon a particular item and will not accept substitutes Example: Sony’s AIBO Robot Dog Unsought Products Goods or services for which a consumer has little awareness or interest until a need arises Require a good deal of advertising or personal selling to interest people Business Products Life-Changing Innovations CD Photocopier Fax Cell phone Post-it Notes Air conditioner Microwave Types of Innovations Innovations differ in their degree of newness and this helps to determine how quickly products will be adopted by a target market The more novel the innovation, the slower the diffusion process Innovation continuum is based on the amount of disruption or change Innovation Continuum “New” Products What is a New Product? Newness Compared wit
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