Chapter 15 – Product development and supply chain management

Growth trap
When a business experiences rapid growth in sales volume, it’s income statements will generally reflect growing profits. A rapid growth in sales and profits may be hazardous to the company’s cash flow. A growth trap can occur, because growth tends to demand additional cash faster than it can be generated in the form of increased profits.
Brandmark
Is the one tangible component of brand identity. It’s a brand that cannot be spoken (arcos do McDonald’s e símbolo da Nike).
Trademark
A legal term indicating that a firm has exclusive rights to use a brand to promote a product.
Product mix
Is the collection of all product lines within a firm’s ownership and control. A firm’s product mix might consist of a line of bar soaps and a line of shoe polishes.
What is the product life cycle? What is the competitive advantage life cycle. How do they differ?
– the product life cycle provides a detailed picture of what happens to the sales and profits of an individual product or service over time.
– the competitive advantage life cycle (develop, deploy, decline): a firm must invest resources to develop a competitive advantage which it can later deploy to boost its performance, but that position will eventually decline as rival firms build these advantages.
-the PLC focus in one.individual product or service while the CALC is about the company itself, reinventing in order to keep in advantage.
What are the steps in the product development process?
1. Idea accumulation: increasing the pool of ideas under consideration;
2. Business analysis: requires that every new product idea be carefully studied in relation to several financial considerations.
3. Development of physical product: sketching out the plan of branding, packaging, and other supporting efforts, such as pricing and promotion.
4. Product testing: should determine whether the physical product is acceptable (safe, effective, durable, etc).
What influence does packaging have on the perceived value of a product?
Innovative packaging is often deciding factor for consumers.
Do strategies for goods and service marketing differ? If so, how?
Yes.
Goods marketing: tangible offerings; occurs at different times; more standardization; less perishability.
Service marketing: intangible offerings; occur at the same time; less standardization; greater perishability.
When should a business offer a warranty on a product?
When the products are innovative, comparatively, expensive, purchased infrequently, relatively complex to repair, and positioned as high-quality goods.
What is dual distribution?
A distribution system that involves more than one channel (retailer, wholesale, agent/brokers).