Week 5 Project

Product Planning and Development

© 2016 South University

Page 2 of 2

Marketing Management

©2016 South University

2 Product Planning and Development

Week 3 Lecture 1

Utility Types and Research Methods

A product is the foundation of the marketing mix and the beginning of an organization’s marketing strategy. It is the need-based offering of an organization. In economic terms, it creates either form or task utility.

Form utility is applied when raw materials are combined with labor to create a physical good of value. Company X uses raw rubber combined with steel to form steel-belted tires. Therefore, it represents form utility. On the other hand, task utility is applied when labor is used to provide a service. Company Y provides spa services, which involve physical labor. Therefore, it represents task utility. It is important for organizations to be aware of these utility types. Too often, organizations develop products they are interested in producing rather than conducting research to see what the consumers’ needs actually are.

To make a product successful, an organization requires a good product plan. Good product planning and development starts with conducting research on the target market to determine its needs and wants. There are three research methods of determining consumer needs and wants. These methods are focus groups, consumer panels, and ladder interviews.

demographics and psychographics of the target market. An organization usually sends its consumer panel test products for feedback. A focus group is one of the most common methods of conducting consumer research. In this method, marketing managers gather consumers to get their views on product ideas or

Page 3 of 2

Marketing Management

©2016 South University

3 Product Planning and Development

Week 3 Lecture 1

to explore what they are looking for in a new product. A ladder interview is a personal interview in which individuals are asked a series of questions about a product and how they use it. Together, these three research methods provide an organization with input on the needs of the target market and how the organization can fulfill those needs with its product.