Core Concepts of Marketing by John Burnett - HTML preview

CHAPTER 7

INTRODUCING AND MANAGING THE PRODUCT

The Consumer's Viewpoint

There are a variety of ways that produc ts can be clas-

sified as new from the perspective of the conSJmer. Degree of consumption modification

and task experience se:ve as two bases for classification. Robertson provides an insightful model when he suggests that new products may be classified according to how much behavioral change or new learning is required by the consumer in order to use the product. 10

The continuum proposed by Robertson and shown in Figure 7.4 depicts the three pri-

mary categories based on the di srupting influence the use of the product has on established

consumption patterns . It is evident that most new products would be considered continu-

ous innovations. Annual model changes

automobiles, appliances, and sewing machines

are examples. Portable hair dryers, diet soda, and aerobic dance CDs reflect products in

the middle category. True innovations are rare.

Although conceptualizing new products in terms of how they modify consumer con-

sumption patterns is useful, there is another basis for classification. New task experience

can also be a criteria. An individual may live in a ho use for several years without ever hav-

ing to repa;r a broken window. One day a mishap occurs, and Mr. Smith is forced to go to

hardware store to buy the necessary

required to install a new window pane. As

he has no experience at all with this task, all those products are new to Mr. Smith. The glaz-

ing compound, the new glass and molding, and metal tacks , as well as the appropriate tools,

are as new to Mr. Smith as a home computer. Using the model proposed by Robertson , prod-

ucts can also be placed on a continuum according to degree of task experience. Clearly, a

product that has existed for a great many

such as a carpenter's level, may be per-

ceived as totally new by the person attempting to build a straight wall. In this case, new-

ness is in the eye of the beh older.

The obvious difficulty with this classification is that it tends to be person-specific.

because replacing a new washer in your bathroom faucet constitutes a new product for

you doesn't mean it is a new product for me. However, it is conceivable that marketing

research would show that for certain types of products, large groups of people have very

limited experience. Consequently, the marketing strategy for such products might include

very detailed instructions, extra educational materials, and sensitivity on the part of the sales clerk

the ignorance

the customer.

Another possible face t of a new task experience is to be familiar with a particular

product, but not familiar with all of its functions. For

a homemaker may have a

microwave oven which she uses primarily for reheating foo d items and making breakfast

foods. Suppose that one afternoon her conventional oven breaks and she must deliver sev-

eral cakes she has donated to a church bazaar. Unfortunately, she has not baked them yet

and is forced to use her microwave, a brand-new task.

Continuous

Dynamically

Discontinuou s

innovations

continuous

innovations

innovations

Least disrupting

Some disrupting

Involves

influence on

influence on

establishment of

established

established

new consumption

consumption

consumption

patterns and the

patterns

patterns

creatio n of

previo usly

unknown products

FIGURE 7.4

Continuum for cla ssifying new products

Source: Thomas Robertson, "The Process of Innovation and the Diffusion of Innovation;' Journal of Mark eting, January 1967, pp . 14-19.

PRODUCT PLANNING AND STRATEGY

171

The Firm's Viewpoint

products in tenns of their newness from the per-

spective of the manufacturer is also important. There are several levels of possible newness

that can be derived through changes either in production, marketing, or some combination

of both.

Based on a schema developed by Eberhard Scheuing, new products, from the per-

spective of the business, can take the following forms: 11

1. Changing the marketing mix: one can argue that whenever some e;ement of the

marketing mix (product

pricing, branding, channels of

adver-

tising, etc.) is modified, a new product emerges.

2. Modification: certain features (norn1ally product design) of an existing product

are altered, and may include external changes, technological improvements, or new

areas of applicability.

3. Differentiation: within one product line, variations of the existing products are

added.

4. Diversification: the addition of new product lines for other applications.

A final consideration in defining "new" is the legal ruling provided by the Federal

Trade Commission. Since the tenn is so prevalent in producl promotion, the FTC felt

to limit

use

"new" to products that are entirely new or changed in afunctionally sig-

nificant or substantial respect. Moreover, the teon can be used for a six-month period of time.

the limited uniqueness of most new products, this ruling appears reasonable.

for Acquiring N ew Products

Most large and medium-sized films are diversified, operating in different business fields.

It would be

to assume that the individual firm is either capable or willing to develop

all new products internally. In fact, most companies simultaneously employ both internal

and external sources for new products. Both are important to the success of a business. 12

Internal Sources

Most major corporations conduct research and development to

some extent. However, very few

make exclusive use of their own internal R&D.

On

contrary, many companies make excellent use of specialists to supplement their own

capabilities. Still, to depend extensively upon outside agencies for success is to

a busi-

ness on the blink of peril. Ideally, the closer the relationship between the new business and

existing product lines, the better the utilization of R&D will be. The National Science Foundation

(1957-77) divides R&D into three parts:

1. Basic research: original investigations for the advancement of scientific knowl-

edge that do not have specific commercial objectives, although they may be in

fields of present or

interest to the reporting company

2. Applied research: directed toward practical applications of knowledge, specific

ends concerning products and processes

3. Development: the systematic use of

knowledge directed toward the pro-

duction of useful materials, devices, systems, or methods, including design and

development of prototypes and processes

External Sources

External approaches to new product development range from the

acquisition of entire businesses to the acquisition of a single component needed for the inter-

nal new product development effort of the finn. The following external sources for new

products are available to most firms.

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