Deck 12: Developing and Managing Products

Question 1

Caterpillar Inc. Crawls Over the Competition with Product Development
Caterpillar Inc. is a global manufacturer of construction and mining equipment, machinery, and engines. The company is best known for its more than 300 machines, including tractors, forest machines, off-highway trucks, wheel dozers, and underground mining machines. Many of these machines are sold under the Cat brand, which consists of a Cat logo with the yellow pyramid over part of the "A." Since Caterpillar's machines and equipment are by far their most popular products, the organization must continually develop new products, modify existing ones, and spread awareness of its offerings to maintain its global competitive edge.
The development of new products at Caterpillar involves a series of stages. Overseeing the product development process are product managers. Under their direction, the Caterpillar division will brainstorm ideas for new products or discuss ways to modify existing ones. The company screens relevant product ideas and then undergoes concept testing and business analysis to determine the likely demand and feasibility of the proposed ideas. When it comes to actually developing the product, quality is everything for Caterpillar. Creating high-quality products is embedded in Caterpillar's Code of Conduct as one of its highest values. Therefore, the company has adopted the quality control process of Six Sigma to detect, correct, and reduce problems before the product is released.
After a working product is developed, Caterpillar releases the product on a limited scale and, should these test markets prove favorable, commercializes it on a national or global scale. This allows Caterpillar to gauge not only customer reaction to the product but also work out any manufacturing issues or problems that occur before launching it on a massive scale. When Caterpillar released its Cat CT660 Vocational Truck, it first released the truck into limited markets to make certain that it met quality standards and avoided major glitches. Once it passed these inspection processes, the Cat CT660 Vocational Truck was made available for large-scale shipment.
Not all of Caterpillar's products are new. Many of the company's machines and much of its equipment are modified to meet changing customer needs or adhere to new governmental requirements. For instance, after being criticized for violating the Clean Air Act in 2000, Caterpillar began modifying its engines to be more eco-friendly. Previously, the company's engines were releasing too much pollution into the air, so Caterpillar created Advanced Combustion Emissions Reduction Technology (ACERT) engines to reduce the amount of gases released. Caterpillar's ACERT technology surpassed federal regulation requirements. However, tighter gas emission laws are requiring Caterpillar to modify its products once more. To meet new requirements, Caterpillar has partnered with Tenneco Inc. to create the Clean Emissions Module (CME) to reduce emissions even further. These modules are being placed in Caterpillar's ACERT engines. Caterpillar also refurbishes old machines to increase their life spans, a type of functional modification.
Caterpillar has extended its product line into several different areas, including apparel, watches, toys, and jackets. Line extensions have both benefits and potential downsides. If the line extension has little to do with the core product, then the extension could fail or, even worse, contaminate the brand. On the other hand, line extensions can allow companies to branch out into other areas and increase brand awareness. For instance, Caterpillar-branded toy trucks and tractors allow consumers to become familiar with the Caterpillar name at a young age.
Caterpillar has begun taking its line extensions a step further by licensing the Cat brand name to create Cat-branded lifestyle stores across the world. When first considering Cat-branded stores, Caterpillar was uncertain whether consumers would accept items like apparel and footwear in a retail environment. The company test-marketed the stores over a two-year period with outlets in the United Arab Emirates and China. Caterpillar has since decided to open stores on a wider global scale. The company has licensed its brand to Wolverine World Wide Inc. for Cat footwear and Summit Resource Imports/ SRI Apparel for Cat-branded apparel. Although it is riskier to create a product extension that is vastly different from Caterpillar's core products of machinery and equipment, Caterpillar expects to profit from these licensing arrangements with increased revenue and global brand awareness.
Caterpillar is a company that must continually develop and manage its products to maintain its leadership in the construction industry. Its success at product management will likely lead the company to take advantage of future opportunities in the global market.
Why is it so important for Caterpillar to develop new products on a regular basis?

Answer 1

It is important for a business to develop new products and increase the number of product offerings to increase sales, improve ability to cater varied demands, and survive competition.
Enhancing product mix can offer competitive edge to the company in the market. Product mix is the type and number of the product offerings by the company.
For example; a fast food outlet offers snack, meals, beverages, and pastries. This is the product mix of the food outlet.
It is important for C Inc. to develop new products on regular basis for various reasons. Some of the reasons are mentioned below:
• Helps spread the risk - Adding new product to the product line helps the company to spread the risk on all products and not just rely on one product.
• Diversification - Developing and launching new products helps the company diversify and expand. For example; a food outlet may offer Wi-Fi, play games in game-zone while waiting for the order etc.
• Cater to varied needs - When a company offers more than one product, it enhances its ability to be able to cater to a large number of customers and help manage economies of scale too.
• Gain customer trust - Extending the existing product line helps the company to gain trust of the customer. As the customer's association with the main or first product is already done, it will be comparatively easier to communicate benefits of the new product.
• Gain brand visibility - With multiple product offerings, customer will be able to relate with the brand better.
These were some of the reasons C Inc should regularly add new products to its offerings.

Question 2

What is a line extension, and how does it differ from a product modification?

Answer 2

A line extension refers to adding a new item in the existing product line. For example, adding diet coke in the list of coke. Line extension provides a development over the product but is designed to meet the specific requirements of customers.
On the other hand, product modification refers to the revision of updation in an existing product on the basis of customer feedback or any flaws in design of the product.
Product modification can be done by changing one or more product's characteristics whereas line extension requires removal of the original product from the line. Modification in the product is less risky as compared to line extension.

Question 3

A company's marketing strategy may be revised to include new products as it considers its SWOT analysis and the impact of environmental factors on its product mix. When developing a marketing plan, the company must decide whether new products are to be added to the product mix or if existing ones should be modified. The information in this chapter will assist you in the creation of your marketing plan as you consider the following:
Identify whether your product will be a modification of an existing one in your product mix or a completely new product.
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Answer 3

The product would be a modification of an existing one rather than a development over the new product. SWOT analysis would help the company to evaluate its strengths, weakness, opportunities and threats. This in turn would help the company to know about the characteristics of the business, its weaknesses, elements that the company can exploit and elements that can trouble the organization.
Modification of the existing product would require the organization to conduct a swot analysis on the basis of which the company can plan to achieve its goals successfully. The company should try to adjust the product mix depending on the requirements, preferences, attitudes of the customers and understanding the competitors.
The company should try to make innovative adjustment in the existing product by understanding the needs and requirement of the customers by producing what the customer demands for.

Question 4

Whether you love them or hate them, the AXE commercials leave an indelible impression. The AXE brand, owned by Unilever, is meant to exude masculinity. First released under the Lynx brand name in France in 1983, AXE products did not hit American shelves until 2002. However, in a short time period, AXE products have revolutionized the male grooming market. AXE is the number-one male grooming brand in both the United States and Canada.
The company features provocative advertisements of women falling over men who wear the AXE body spray. AXE body sprays are its most popular product, but when it first entered the U.S. market, the company was taking a risk. Until that time, body sprays were not marketed to men, as they were considered to be more of a girl's item. Yet AXE quickly gained popularity by honing in on what many young men care about.
"Our target is really 18 to 24," said AXE brand manager Mike Dwyer. "Our ads are exactly what an 18-to-24-yearold guy is thinking about. It's gears and gadgets, it's sports, or it's girls. We focus very much on girls."
AXE's product features are both tangible and psychological. On the tangible side, the smell of the product needs to be pleasing to both men and women. The psychological features of the product include desirability, masculinity, and seductiveness.
To effectively manage the AXE brand, Unilever has to regularly develop new products and manage existing lines. Over the years, it has introduced several line extensions, including hairstyling, aftershave, skin care, and shower gel products. The company has also released an AXE fragrance called Anarchy for Her in Canada, so that girls can experience the "AXE Effect." Anarchy for Her is meant to complement the Anarchy for Him male fragrance and has more fruity and flowery scents.
Each year, the company introduces a new fragrance. For example, one of its more recent fragrances includes a chocolate ice cream scent. In order to create scents that resonate with its young male demographic, AXE hires professional perfumers to develop the fragrance and even employs expert "smellers." Such efforts not only made AXE a market leader but also helped the male grooming industry as a whole. It is estimated that, by 2015, male grooming products will be a $33.2 billion industry
AXE's sexualized marketing and its appeal to young men have become what Dwyer has called the "AXE Lifestyle." The styling of the product's package is meant to convey seductiveness (the traditional package is black, but the color changes depending on the product). AXE advertisements try to connect the action of attracting a woman to the product itself. For instance, the chocolate ice cream fragrance featured a commercial where women were licking the man after he used that particular scented body spray. Although AXE promotes itself through Twitter and events, its commercials tend to be its most notable promotion.
Young men have gravitated toward the idea that AXE body spray can make them more desirable. However, what AXE perhaps did not anticipate was its popularity among younger generations: male teenagers and tweens (those between the ages of 10 and 12). Although these younger generations do not have jobs, they have significant influence in the family. Mothers often purchase these products for their children after they request them.
Many of the promotions that appeal to young men seem to appeal to preadolescents-namely, the desire to be accepted and feel "sexy." Because preadolescence is the age when many young men become more conscientiousness of their looks, AXE provides a way for them to feel more confi dent about their body image. Unfortunately, preadolescents tend to over-spray, and some schools have even banned the body spray because it is distracting in class.
Although the AXE brand can profit from its popularity among the tween generation, this trend can also backfire. Young men traditionally have shied away from products that are popular with those young enough to be their "kid brothers." Therefore, AXE makes it clear that its target market is for those between the ages of 18 and 24. To respond to these changing trends, AXE will need to continue developing and adapting products to meet the needs of its target market and take advantage of new market opportunities.
How has AXE managed its product mix?

Question 5

Caterpillar Inc. Crawls Over the Competition with Product Development
Caterpillar Inc. is a global manufacturer of construction and mining equipment, machinery, and engines. The company is best known for its more than 300 machines, including tractors, forest machines, off-highway trucks, wheel dozers, and underground mining machines. Many of these machines are sold under the Cat brand, which consists of a Cat logo with the yellow pyramid over part of the "A." Since Caterpillar's machines and equipment are by far their most popular products, the organization must continually develop new products, modify existing ones, and spread awareness of its offerings to maintain its global competitive edge.
The development of new products at Caterpillar involves a series of stages. Overseeing the product development process are product managers. Under their direction, the Caterpillar division will brainstorm ideas for new products or discuss ways to modify existing ones. The company screens relevant product ideas and then undergoes concept testing and business analysis to determine the likely demand and feasibility of the proposed ideas. When it comes to actually developing the product, quality is everything for Caterpillar. Creating high-quality products is embedded in Caterpillar's Code of Conduct as one of its highest values. Therefore, the company has adopted the quality control process of Six Sigma to detect, correct, and reduce problems before the product is released.
After a working product is developed, Caterpillar releases the product on a limited scale and, should these test markets prove favorable, commercializes it on a national or global scale. This allows Caterpillar to gauge not only customer reaction to the product but also work out any manufacturing issues or problems that occur before launching it on a massive scale. When Caterpillar released its Cat CT660 Vocational Truck, it first released the truck into limited markets to make certain that it met quality standards and avoided major glitches. Once it passed these inspection processes, the Cat CT660 Vocational Truck was made available for large-scale shipment.
Not all of Caterpillar's products are new. Many of the company's machines and much of its equipment are modified to meet changing customer needs or adhere to new governmental requirements. For instance, after being criticized for violating the Clean Air Act in 2000, Caterpillar began modifying its engines to be more eco-friendly. Previously, the company's engines were releasing too much pollution into the air, so Caterpillar created Advanced Combustion Emissions Reduction Technology (ACERT) engines to reduce the amount of gases released. Caterpillar's ACERT technology surpassed federal regulation requirements. However, tighter gas emission laws are requiring Caterpillar to modify its products once more. To meet new requirements, Caterpillar has partnered with Tenneco Inc. to create the Clean Emissions Module (CME) to reduce emissions even further. These modules are being placed in Caterpillar's ACERT engines. Caterpillar also refurbishes old machines to increase their life spans, a type of functional modification.
Caterpillar has extended its product line into several different areas, including apparel, watches, toys, and jackets. Line extensions have both benefits and potential downsides. If the line extension has little to do with the core product, then the extension could fail or, even worse, contaminate the brand. On the other hand, line extensions can allow companies to branch out into other areas and increase brand awareness. For instance, Caterpillar-branded toy trucks and tractors allow consumers to become familiar with the Caterpillar name at a young age.
Caterpillar has begun taking its line extensions a step further by licensing the Cat brand name to create Cat-branded lifestyle stores across the world. When first considering Cat-branded stores, Caterpillar was uncertain whether consumers would accept items like apparel and footwear in a retail environment. The company test-marketed the stores over a two-year period with outlets in the United Arab Emirates and China. Caterpillar has since decided to open stores on a wider global scale. The company has licensed its brand to Wolverine World Wide Inc. for Cat footwear and Summit Resource Imports/ SRI Apparel for Cat-branded apparel. Although it is riskier to create a product extension that is vastly different from Caterpillar's core products of machinery and equipment, Caterpillar expects to profit from these licensing arrangements with increased revenue and global brand awareness.
Caterpillar is a company that must continually develop and manage its products to maintain its leadership in the construction industry. Its success at product management will likely lead the company to take advantage of future opportunities in the global market.
Why is Caterpillar so careful to test-market its products prior to commercialization?

Question 6

Compare and contrast the three major approaches to modifying a product.

Question 7

A company's marketing strategy may be revised to include new products as it considers its SWOT analysis and the impact of environmental factors on its product mix. When developing a marketing plan, the company must decide whether new products are to be added to the product mix or if existing ones should be modified. The information in this chapter will assist you in the creation of your marketing plan as you consider the following:
If the product is an extension of one in your current product mix, determine the type(s) of modifications that will be performed.
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 8

Whether you love them or hate them, the AXE commercials leave an indelible impression. The AXE brand, owned by Unilever, is meant to exude masculinity. First released under the Lynx brand name in France in 1983, AXE products did not hit American shelves until 2002. However, in a short time period, AXE products have revolutionized the male grooming market. AXE is the number-one male grooming brand in both the United States and Canada.
The company features provocative advertisements of women falling over men who wear the AXE body spray. AXE body sprays are its most popular product, but when it first entered the U.S. market, the company was taking a risk. Until that time, body sprays were not marketed to men, as they were considered to be more of a girl's item. Yet AXE quickly gained popularity by honing in on what many young men care about.
"Our target is really 18 to 24," said AXE brand manager Mike Dwyer. "Our ads are exactly what an 18-to-24-yearold guy is thinking about. It's gears and gadgets, it's sports, or it's girls. We focus very much on girls."
AXE's product features are both tangible and psychological. On the tangible side, the smell of the product needs to be pleasing to both men and women. The psychological features of the product include desirability, masculinity, and seductiveness.
To effectively manage the AXE brand, Unilever has to regularly develop new products and manage existing lines. Over the years, it has introduced several line extensions, including hairstyling, aftershave, skin care, and shower gel products. The company has also released an AXE fragrance called Anarchy for Her in Canada, so that girls can experience the "AXE Effect." Anarchy for Her is meant to complement the Anarchy for Him male fragrance and has more fruity and flowery scents.
Each year, the company introduces a new fragrance. For example, one of its more recent fragrances includes a chocolate ice cream scent. In order to create scents that resonate with its young male demographic, AXE hires professional perfumers to develop the fragrance and even employs expert "smellers." Such efforts not only made AXE a market leader but also helped the male grooming industry as a whole. It is estimated that, by 2015, male grooming products will be a $33.2 billion industry
AXE's sexualized marketing and its appeal to young men have become what Dwyer has called the "AXE Lifestyle." The styling of the product's package is meant to convey seductiveness (the traditional package is black, but the color changes depending on the product). AXE advertisements try to connect the action of attracting a woman to the product itself. For instance, the chocolate ice cream fragrance featured a commercial where women were licking the man after he used that particular scented body spray. Although AXE promotes itself through Twitter and events, its commercials tend to be its most notable promotion.
Young men have gravitated toward the idea that AXE body spray can make them more desirable. However, what AXE perhaps did not anticipate was its popularity among younger generations: male teenagers and tweens (those between the ages of 10 and 12). Although these younger generations do not have jobs, they have significant influence in the family. Mothers often purchase these products for their children after they request them.
Many of the promotions that appeal to young men seem to appeal to preadolescents-namely, the desire to be accepted and feel "sexy." Because preadolescence is the age when many young men become more conscientiousness of their looks, AXE provides a way for them to feel more confi dent about their body image. Unfortunately, preadolescents tend to over-spray, and some schools have even banned the body spray because it is distracting in class.
Although the AXE brand can profit from its popularity among the tween generation, this trend can also backfire. Young men traditionally have shied away from products that are popular with those young enough to be their "kid brothers." Therefore, AXE makes it clear that its target market is for those between the ages of 18 and 24. To respond to these changing trends, AXE will need to continue developing and adapting products to meet the needs of its target market and take advantage of new market opportunities.
How has AXE used line extensions to increase its reach among consumers?

Question 9

Caterpillar Inc. Crawls Over the Competition with Product Development
Caterpillar Inc. is a global manufacturer of construction and mining equipment, machinery, and engines. The company is best known for its more than 300 machines, including tractors, forest machines, off-highway trucks, wheel dozers, and underground mining machines. Many of these machines are sold under the Cat brand, which consists of a Cat logo with the yellow pyramid over part of the "A." Since Caterpillar's machines and equipment are by far their most popular products, the organization must continually develop new products, modify existing ones, and spread awareness of its offerings to maintain its global competitive edge.
The development of new products at Caterpillar involves a series of stages. Overseeing the product development process are product managers. Under their direction, the Caterpillar division will brainstorm ideas for new products or discuss ways to modify existing ones. The company screens relevant product ideas and then undergoes concept testing and business analysis to determine the likely demand and feasibility of the proposed ideas. When it comes to actually developing the product, quality is everything for Caterpillar. Creating high-quality products is embedded in Caterpillar's Code of Conduct as one of its highest values. Therefore, the company has adopted the quality control process of Six Sigma to detect, correct, and reduce problems before the product is released.
After a working product is developed, Caterpillar releases the product on a limited scale and, should these test markets prove favorable, commercializes it on a national or global scale. This allows Caterpillar to gauge not only customer reaction to the product but also work out any manufacturing issues or problems that occur before launching it on a massive scale. When Caterpillar released its Cat CT660 Vocational Truck, it first released the truck into limited markets to make certain that it met quality standards and avoided major glitches. Once it passed these inspection processes, the Cat CT660 Vocational Truck was made available for large-scale shipment.
Not all of Caterpillar's products are new. Many of the company's machines and much of its equipment are modified to meet changing customer needs or adhere to new governmental requirements. For instance, after being criticized for violating the Clean Air Act in 2000, Caterpillar began modifying its engines to be more eco-friendly. Previously, the company's engines were releasing too much pollution into the air, so Caterpillar created Advanced Combustion Emissions Reduction Technology (ACERT) engines to reduce the amount of gases released. Caterpillar's ACERT technology surpassed federal regulation requirements. However, tighter gas emission laws are requiring Caterpillar to modify its products once more. To meet new requirements, Caterpillar has partnered with Tenneco Inc. to create the Clean Emissions Module (CME) to reduce emissions even further. These modules are being placed in Caterpillar's ACERT engines. Caterpillar also refurbishes old machines to increase their life spans, a type of functional modification.
Caterpillar has extended its product line into several different areas, including apparel, watches, toys, and jackets. Line extensions have both benefits and potential downsides. If the line extension has little to do with the core product, then the extension could fail or, even worse, contaminate the brand. On the other hand, line extensions can allow companies to branch out into other areas and increase brand awareness. For instance, Caterpillar-branded toy trucks and tractors allow consumers to become familiar with the Caterpillar name at a young age.
Caterpillar has begun taking its line extensions a step further by licensing the Cat brand name to create Cat-branded lifestyle stores across the world. When first considering Cat-branded stores, Caterpillar was uncertain whether consumers would accept items like apparel and footwear in a retail environment. The company test-marketed the stores over a two-year period with outlets in the United Arab Emirates and China. Caterpillar has since decided to open stores on a wider global scale. The company has licensed its brand to Wolverine World Wide Inc. for Cat footwear and Summit Resource Imports/ SRI Apparel for Cat-branded apparel. Although it is riskier to create a product extension that is vastly different from Caterpillar's core products of machinery and equipment, Caterpillar expects to profit from these licensing arrangements with increased revenue and global brand awareness.
Caterpillar is a company that must continually develop and manage its products to maintain its leadership in the construction industry. Its success at product management will likely lead the company to take advantage of future opportunities in the global market.
What are some of the benefits and risks of Caterpillar's line extensions?

Question 10

Identify and briefly explain the seven major phases of the new-product development process.

Question 11

A company's marketing strategy may be revised to include new products as it considers its SWOT analysis and the impact of environmental factors on its product mix. When developing a marketing plan, the company must decide whether new products are to be added to the product mix or if existing ones should be modified. The information in this chapter will assist you in the creation of your marketing plan as you consider the following:
Using Figure 12.1 as a guide, discuss how your product idea would move through the stages of new-product development. Examine the idea, using the tests and analyses included in the new-product development process.

The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 12

Whether you love them or hate them, the AXE commercials leave an indelible impression. The AXE brand, owned by Unilever, is meant to exude masculinity. First released under the Lynx brand name in France in 1983, AXE products did not hit American shelves until 2002. However, in a short time period, AXE products have revolutionized the male grooming market. AXE is the number-one male grooming brand in both the United States and Canada.
The company features provocative advertisements of women falling over men who wear the AXE body spray. AXE body sprays are its most popular product, but when it first entered the U.S. market, the company was taking a risk. Until that time, body sprays were not marketed to men, as they were considered to be more of a girl's item. Yet AXE quickly gained popularity by honing in on what many young men care about.
"Our target is really 18 to 24," said AXE brand manager Mike Dwyer. "Our ads are exactly what an 18-to-24-yearold guy is thinking about. It's gears and gadgets, it's sports, or it's girls. We focus very much on girls."
AXE's product features are both tangible and psychological. On the tangible side, the smell of the product needs to be pleasing to both men and women. The psychological features of the product include desirability, masculinity, and seductiveness.
To effectively manage the AXE brand, Unilever has to regularly develop new products and manage existing lines. Over the years, it has introduced several line extensions, including hairstyling, aftershave, skin care, and shower gel products. The company has also released an AXE fragrance called Anarchy for Her in Canada, so that girls can experience the "AXE Effect." Anarchy for Her is meant to complement the Anarchy for Him male fragrance and has more fruity and flowery scents.
Each year, the company introduces a new fragrance. For example, one of its more recent fragrances includes a chocolate ice cream scent. In order to create scents that resonate with its young male demographic, AXE hires professional perfumers to develop the fragrance and even employs expert "smellers." Such efforts not only made AXE a market leader but also helped the male grooming industry as a whole. It is estimated that, by 2015, male grooming products will be a $33.2 billion industry
AXE's sexualized marketing and its appeal to young men have become what Dwyer has called the "AXE Lifestyle." The styling of the product's package is meant to convey seductiveness (the traditional package is black, but the color changes depending on the product). AXE advertisements try to connect the action of attracting a woman to the product itself. For instance, the chocolate ice cream fragrance featured a commercial where women were licking the man after he used that particular scented body spray. Although AXE promotes itself through Twitter and events, its commercials tend to be its most notable promotion.
Young men have gravitated toward the idea that AXE body spray can make them more desirable. However, what AXE perhaps did not anticipate was its popularity among younger generations: male teenagers and tweens (those between the ages of 10 and 12). Although these younger generations do not have jobs, they have significant influence in the family. Mothers often purchase these products for their children after they request them.
Many of the promotions that appeal to young men seem to appeal to preadolescents-namely, the desire to be accepted and feel "sexy." Because preadolescence is the age when many young men become more conscientiousness of their looks, AXE provides a way for them to feel more confi dent about their body image. Unfortunately, preadolescents tend to over-spray, and some schools have even banned the body spray because it is distracting in class.
Although the AXE brand can profit from its popularity among the tween generation, this trend can also backfire. Young men traditionally have shied away from products that are popular with those young enough to be their "kid brothers." Therefore, AXE makes it clear that its target market is for those between the ages of 18 and 24. To respond to these changing trends, AXE will need to continue developing and adapting products to meet the needs of its target market and take advantage of new market opportunities.
Why are younger generations attracted to AXE products?

Question 13

Do small companies that manufacture just a few products need to be concerned about developing and managing products? Why or why not?

Question 14

A company's marketing strategy may be revised to include new products as it considers its SWOT analysis and the impact of environmental factors on its product mix. When developing a marketing plan, the company must decide whether new products are to be added to the product mix or if existing ones should be modified. The information in this chapter will assist you in the creation of your marketing plan as you consider the following:
Discuss how the management of this product will fi t into your current organizational structure.
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 15

Why is product development a cross-functional activity-involving finance, engineering, manufacturing, and other functional areas-within an organization?

Question 16

What is the major purpose of concept testing, and how is it accomplished?

Question 17

What are the benefits and disadvantages of test marketing?

Question 18

Why can the process of commercialization take a considerable amount of time?

Question 19

What is product differentiation, and how can it be achieved?

Question 20

Explain how the term quality has been used to differentiate products in the automobile industry in recent years. What are some makes and models of automobiles that come to mind when you hear the terms high quality and poor quality?

Question 21

What is product positioning? Under what conditions would head-to-head product positioning be appropriate? When should head-to-head positioning be avoided?

Question 22

What types of problems does a weak product cause in a product mix? Describe the most effective approach for avoiding such problems.

Question 23

What type of organization might use a venture team to develop new products? What are the advantages and disadvantages of such a team?