Page 355 - Foundations of Marketing

322 Part 4 | Product and Price Decisions

Key Concepts

line extension 294 screening 298 consistency of quality 305 inseparability 312
product modification 295 concept testing 299 product design 305 perishability 312
quality modifications 295 business analysis 299 styling 305 heterogeneity 313
functional modifications product development 300 product features 305 client-based relationships
296 test marketing 301 customer services 305 314
aesthetic modifications 296 commercialization 302 product positioning 306 customer contact 314
new-product development product differentiation 304 product deletion 309 product manager 320
process 298 quality 304 homesourcing 311 brand manager 320
idea generation 298 level of quality 304 intangibility 311 venture team 320

Issues for Discussion and Review

1. What is a line extension, and how does it differ from a 9. What is product differentiation, and how can it be achieved?
product modification? 10. Explain how the term quality has been used to differ-
2. Compare and contrast the three major approaches to entiate products in the automobile industry in recent
modifying a product. years. What are some makes and models of automo-
3. Identify and briefly explain the seven major phases of biles that come to mind when you hear the terms high
the new-product development process. quality and poor quality ?
4. Do small companies that manufacture just a few prod- 11. What is product positioning? Under what conditions
ucts need to be concerned about developing and manag- would head-to-head product positioning be appropri-
ing products? Why or why not? ate? When should head-to-head positioning be avoided?
5. Why is product development a cross-functional activ- 12. What types of problems does a weak product cause in a
ity within an organization? That is, why must finance, product mix? Describe the most effective approach for
engineering, manufacturing, and other functional areas avoiding such problems.
be involved? 13. How important are services in the U.S. economy?
6. What is the major purpose of concept testing, and how is 14. Identify and discuss the major service characteristics.
it accomplished? 15. For each marketing mix element, which service charac-
7. What are the benefits and disadvantages of test teristics are most likely to have an impact?
marketing? 16. What type of organization might use a venture team to
8. Why can the process of commercialization take a develop new products? What are the advantages and
considerable amount of time? disadvantages of such a team?

Marketing Applications

1. A company often test-markets a proposed product in aesthetic), and describe how you would have modified it
a specific area or location. Suppose that you wish to differently.
test-market your new, revolutionary SuperWax car wax, 4. The characteristics of services affect the development of
which requires only one application for a lifetime fin- marketing mixes for services. Choose a specific service
ish. Where and how would you test-market your new and explain how each marketing mix element could be
product? affected by these service characteristics.
2. Select an organization that you think should 5. Identify three service organizations you see in outdoor,
reposition itself in the consumer’s eye. Identify where television, or magazine advertising. What symbols are
it is currently positioned, and make recommendations used to represent their services? What message do the
for repositioning. Explain and defend your symbols convey to potential customers?
suggestions. 6. Visit a retail store in your area, and ask the manager what
3. Identify a familiar product that recently was modi- products he or she has had to discontinue in the recent
fied, categorize the modification (quality, functional, or past. Find out what factors influenced the decision to

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