The steps in the new-product development process are idea generation, idea screening, product analysis, concept development and testing, product and marketing mix development, market testing, and commercialization.

The product life cycle is a theoretical model describing a product’s sales and profits over the course of its lifetime. Introduction, growth, maturity, and decline are stages in the product life cycle.

A product is any good, service, or idea that might satisfy a want or a need. A total product offer consists of all the tangible and intangible benefits associated with a good, a service, or an idea that affects a consumer’s purchasing decision. Marketers know this. When planning a total product offering, they think about it on three levels:

• The core product satisfies the basic need or want that motivates a purchase. Because it is the basic benefit provided by a product, you can’t touch it; it is intangible.

• The actual product is the tangible aspect of a purchase that you can touch, see, hear, smell, or taste. It provides core benefits when it is used.

• The augmented product consists of the core and actual product plus other real or perceived benefits that provide additional value to the customer’s purchase.

Product differentiation is the process of attracting customers by distinguishing a product in real or perceived terms from competing products.

Customer input and feedback guide product development and product differentiation and lead to the creation of a product line, a group of similar products marketed to one general market. A product mix is the combination of all product lines offered for sale by a company. Product lines and mix result from trying to tailor total product offerings to unique targeted customers.

The four classifications of consumer products are convenience goods and services, shopping goods and services, specialty goods and services, and unsought goods and services:

• Customers purchase convenience goods and services, such as gum, soap, and milk, frequently, immediately, and with little deliberation.

• Shopping goods and services are products that are less frequently purchased and require that the customer spend more time and effort comparing them. Examples include clothes, electronics, and furniture.

• Specialty goods and services have unique characteristics and no suitable substitutes. Examples include designer clothing or the services of prestigious lawyers.

• Unsought goods and services are products buyers don’t usually think about buying, don’t know exist, or buy only when a specific problem arises. An example is funeral services.

There are five categories of business-to-business (B2B) products: equipment, MRO products, raw and processed materials, component parts, and specialized professional services.

Branding reduces shopping time for consumers and helps them express themselves. Branding helps sellers define the special qualities of their products, encourages repeat purchases, and can result in new sales at higher prices.

Marketing a product using the same brand name but in a different product category is known as brand extension. A brand license is an agreement between the owner of a brand and another company or individual who pays a royalty for using the brand in association with a new product.

For sellers, branding creates brand loyalty among consumers. Brand loyalty contributes to brand equity, the overall value of a brand’s strength in the market. Brand awareness refers to the extent to which a particular brand name is familiar to consumers. Brand association occurs when consumers connect a brand with other positive attributes.

There are six different types of brands: manufacturer’s brands, family brands, individual brands, private brands, co-brands, and generic brands.

How a product is packaged and labeled sends a message about a product and a brand.

Common pricing objectives include maximizing profits, achieving greater market share, maximizing sales, building traffic in stores, matching status quo prices, covering costs to survive, creating an image, and ensuring greater affordability.

Price is the only revenue-generating component of the marketing mix. Marketers must carefully consider their pricing objectives to develop the best pricing strategy.

The major approaches to pricing strategies are cost-based pricing, demand-based pricing, competition-based pricing, and everyday low pricing.

Price skimming and penetration pricing are tactics used for new products.

Prestige pricing, psychological pricing, the use of loss leaders, and reference pricing are pricing strategies that affect the price perceptions of consumers.

Discounts, rebates, bundling, and dynamic pricing are common types of price adjustments.

Measuring how the demand for a product will be affected when its price changes is referred to as the product’s price elasticity of demand. Products that are purchased in approximately the same quantities when their prices rise are said to be price inelastic. By contrast, the demand for elastic goods falls when their prices rise.