Week 7 Reflection
Dan Cushing
Week 7 was devoted to learning about the Product Life Cycle, differentiating goods between business and consumer, and steps to develop new products.
The Product Life Cycle is a model that attempts to display the four stages a product will go through from introduction to discontinuance. The four stages are Introduction, Growth, Maturity, and Decline. Introduction stage occurs when the product first enters the market. The business's activities in this stage revolve around raising awareness, maximizing profits, and either trying to recuperate research and development costs or keeping prices low to attract customers and discourage competition. The customers in this stage are known as early investors. In the Growth stage, the investments made previously begin to pay off. As a result, the market share of the product and profits both increase. However, competition begins to enter the market so product differentiation becomes important. The Maturity stage has the highest level of profitability because the customers now are primarily repeat customers. The product is well known and mass produced so variable costs are lowered. Lastly, the Decline Stage is where companies are forced to make decisions about the products future. Businesses are left with three options here. They can maintain/improve their current product which is where the business looks to add new features or look for new ways the product can be used. The company can harvest the product by making it a cash cow. The business will reduce costs associated to the product in order to maximize profits. The third option is to discontinue the product. The company ceases to support the product, sell off all remaining inventory, and focus on other products. Our smart project will only reach the Introduction stage due to the time limit of the class. This means that we will have to produce a pitch and try to create user awareness for why a consumer will need HydroFit.
The next topic we learned about is the six steps to develop new products. The six steps are: Idea Generation, Concept Testing, Product Development, Market Testing, Product Launch, and Evaluation of Results. Idea Generation consists of brainstorming of new viable products to introduce. The brainstorming is a result of consumer input, research and development, licensing, and existing products. Concept Testing the idea is brought up before a survey of potential customers in order to determine if the company should move forward or not. Product Development involves development of the product as well as introducing the prototype to test markets. Here the company will do premarket tests as well as test marketing. Test marketing is more expensive than premarket tests but it allows the market demand to be estimated. This leads into Product Launch where a full on product launch is conducted and the product is introduced to the general public. After the product launch, the company will evaluate the results. This is where the company determines if the product is living up to expectations or is failing. If there are needs for improvement, the product will be modified in this stage.
When producing a product, it is important to think of who the consumer is. If it is to a consumer then it is a Consumer Product, while if it is for a business it is a Business Product. There are 7 types of business products. Major Equipment is capital goods such as heavy machinery. Accessory Equipment refers to less expensive equipment goods such as a printer. Raw materials refer to goods that have not been modified or produced in any fashion such as iron or crude oil. Component Parts are goods that a company will buy in order to make their products. For example, my team HydroFit will need to buy a fore sensor from another company for our prototype. Processed Materials are materials that are used to manufacture other goods. Supplies are goods that are typically inexpensive and bought in bulk such as paper. Finally, Business Services are expense items that are not part of the physical product. On the other hand, Consumer Products have 4 categories. The first is Convenience products. These products are low cost, routine purchases, and readily available in the market. Shopping products require consumers to use the Buying Process to compare brands and determine what they buy. These products are generally more expensive and have limited distribution. Shopping products can be homogeneous where the products in the market are very similar and buying decision is mostly based on price. Otherwise the product can be heterogeneous where the products are differentiated and the consumer must compare products. Specialty products refer to those that consumers care about brand and quality and will be loyal consumers. Lastly, Unsought products are those that consumers do not actively seek out such as funeral expenses.
One thing I would like to know more about is when a company will find it necessary to re-position their product.
Dan Cushing
Week 7 was devoted to learning about the Product Life Cycle, differentiating goods between business and consumer, and steps to develop new products.
The Product Life Cycle is a model that attempts to display the four stages a product will go through from introduction to discontinuance. The four stages are Introduction, Growth, Maturity, and Decline. Introduction stage occurs when the product first enters the market. The business's activities in this stage revolve around raising awareness, maximizing profits, and either trying to recuperate research and development costs or keeping prices low to attract customers and discourage competition. The customers in this stage are known as early investors. In the Growth stage, the investments made previously begin to pay off. As a result, the market share of the product and profits both increase. However, competition begins to enter the market so product differentiation becomes important. The Maturity stage has the highest level of profitability because the customers now are primarily repeat customers. The product is well known and mass produced so variable costs are lowered. Lastly, the Decline Stage is where companies are forced to make decisions about the products future. Businesses are left with three options here. They can maintain/improve their current product which is where the business looks to add new features or look for new ways the product can be used. The company can harvest the product by making it a cash cow. The business will reduce costs associated to the product in order to maximize profits. The third option is to discontinue the product. The company ceases to support the product, sell off all remaining inventory, and focus on other products. Our smart project will only reach the Introduction stage due to the time limit of the class. This means that we will have to produce a pitch and try to create user awareness for why a consumer will need HydroFit.
The next topic we learned about is the six steps to develop new products. The six steps are: Idea Generation, Concept Testing, Product Development, Market Testing, Product Launch, and Evaluation of Results. Idea Generation consists of brainstorming of new viable products to introduce. The brainstorming is a result of consumer input, research and development, licensing, and existing products. Concept Testing the idea is brought up before a survey of potential customers in order to determine if the company should move forward or not. Product Development involves development of the product as well as introducing the prototype to test markets. Here the company will do premarket tests as well as test marketing. Test marketing is more expensive than premarket tests but it allows the market demand to be estimated. This leads into Product Launch where a full on product launch is conducted and the product is introduced to the general public. After the product launch, the company will evaluate the results. This is where the company determines if the product is living up to expectations or is failing. If there are needs for improvement, the product will be modified in this stage.
When producing a product, it is important to think of who the consumer is. If it is to a consumer then it is a Consumer Product, while if it is for a business it is a Business Product. There are 7 types of business products. Major Equipment is capital goods such as heavy machinery. Accessory Equipment refers to less expensive equipment goods such as a printer. Raw materials refer to goods that have not been modified or produced in any fashion such as iron or crude oil. Component Parts are goods that a company will buy in order to make their products. For example, my team HydroFit will need to buy a fore sensor from another company for our prototype. Processed Materials are materials that are used to manufacture other goods. Supplies are goods that are typically inexpensive and bought in bulk such as paper. Finally, Business Services are expense items that are not part of the physical product. On the other hand, Consumer Products have 4 categories. The first is Convenience products. These products are low cost, routine purchases, and readily available in the market. Shopping products require consumers to use the Buying Process to compare brands and determine what they buy. These products are generally more expensive and have limited distribution. Shopping products can be homogeneous where the products in the market are very similar and buying decision is mostly based on price. Otherwise the product can be heterogeneous where the products are differentiated and the consumer must compare products. Specialty products refer to those that consumers care about brand and quality and will be loyal consumers. Lastly, Unsought products are those that consumers do not actively seek out such as funeral expenses.
One thing I would like to know more about is when a company will find it necessary to re-position their product.
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