|


 
  

Every product has to go through a life cycle ²

It is born, goes through several phases, and
eventually dies as newer products come along that
better serve consumer needs.

?





 
 
½ xcquisition
½ New-product development
|

   
  

x
 refers to the buying of a whole company,

a patent, or a license to produce someone else·s
product.


      refers to original
products, product improvements, product
modifications, and new brands developed from
the firm·s own research and development.
|

   
  

 
   
 
0 verestimation of market size
0
oor design
0 Incorrect positioning
0 rong timing
0
riced too high
0 Ineffective promotion
0 anagement influence
0 igh development costs
0 ompetition
|

   
  

Marketing Business
Strategy Analysis
Development

Concept
Product
Development
Development
and Testing

Idea Test
Screening Marketing

Idea Commercialization
Generation
|

   
  

Idea Generation


  
 




 

     refer to the company·s own formal research

and development, management and staff, and
entrepreneurial programs.


    refer to sources outside the company such
as customers, competitors, distributors, suppliers, and
outside design firms
|

   
  

Idea Screening
    refers to reviewing new-product ideas
in order to spot good ideas and drop poor ones
as soon as possible

    
  

0 arget market and market size
0
roduct price, development time and cost
0 ate of return and potentiality
|

   
  

Ñoncept Development and Testing

   is a detailed version of the idea

stated in meaningful consumer terms. xn
attractive idea must be develop into a product
concept.

For instance: Facing the utmost shortage of transport

fuel thinking about an effective alternative like
NG technology.
|

   
  

Ñoncept Development and Testing

    refers testing the new-product
concepts with a groups of target consumers to
find out whether the product has strong consumer
appeal or not?
- For the concept testing, a word or picture
description might be sufficient. But we can make
a dummy of the product to make it more
practical and reliable to customers.
|

   
  

£arketing Strategy Development

£         refers designing

an initial marketing strategy for a new product
based on the product concept

he marketing strategy statement consists of three parts:

1.    describes the target market, the planned
product positioning, sales, market share and profit goals
for the first year.
|

   
  

£arketing Strategy Development

·.     describes the product·s planned price,

distribution and marketing budget for the first year.

3.    describe the planned long-run sales, profit

goals and marketing mix strategy.
|

   
  

- siness Analysis

- 
  involves a review of the sales, costs,
and profit projections to find out whether they
satisfy the company·s objectives

- o estimate the sales, company might look at the sales

history of similar product and conduct surveys of
market opinion.
|

   
  

Business Analysis
Review of Product Sales, Costs,
and Profits Projections to See if
They Meet Company Objectives

If No, Eliminate
Product Concept

If Yes, Move to
Product Development
|

   
  

Vrod ct Development

     involves the creation and

testing of one or more physical versions by the
 or engineering departments in order to
ensure that the product idea can be turned into a
workable product.

0 It requires an increase in investment and direct

involvement of different departments.
|

   
  

Test £arketing

    is the stage at which the product and

marketing program are introduced into more
realistic marketing settings.

- est marketing provides the marketer with

experience in testing the product and entire
marketing program before full introduction.
 |

   
  

Test Marketing is the Stage Where the Product and Marketing

Program are Introduced into More Realistic Market Settings.

Budget Levels Product

Packaging Positioning
Elements that
May be Test
Marketed by a
Branding Company Advertising

Pricing Distribution
|

   
  

Test £arketing for Ñons mer Vrod cts

xpproaches to test marketing:

0
tandard test markets
0 ontrolled test markets
0
imulated test markets
|

   
  

Test £arketing
     are small representative
markets where the firm conducts a full marketing
campaign and uses store audits, consumer and
distributor surveys, and other measures to
estimate product performance.
- esults are used to forecast national sales and
profits, discover product problems, and fine-tune
the marketing program.
|

   
  

Test £arketing
- haracteristics of
tandard test markets:
0 ay be very costly
0 an take long time
0 ompetitors can monitor the test results
0 ompetitor interference by cutting price
0 ompetitors gain access to the new product before
introduction
|

   
  

Test £arketing
      are panels of stores monitored
by some research firms that carry new products for
a fee.
- haracteristics of ontrolled test markets:
0 ess expensive than standard test markets
0 Faster than standard test markets
0 ompetitors gain access to the new product
|

   
  

Test £arketing
      are events where the firm
will create a shopping environment and note how
many consumers buy the new product and
competing products.
Ex:
articipating in rade shows and arranging
internal Fair/Exhibitions highlighting the products.
|

   
  

Test £arketing
   

  

 
0 ess expensive than other test methods
0 Faster and direct response
0 estricts access by competitors

   
0 Not considered as reliable and accurate due to the
controlled setting
|

   
  

Ñommercialization

    is the introduction of the new product

in the mass market. Based on the results from test
marketing marketer decide the following things while
commercialization.

0 hen to launch?
0 here to launch?
0 ow to launch?
£
|

   

uccessful new product development should be:

0 ustomer-centered product development

0 eam-centered product development
0
ystematic product development
£
|

   

      
    

focuses on finding new ways to solve customer problems
and create more customer-satisfying experiences.
Ex. G
·s ommunity Information enter (I
offering internet services for the villagers.

0 It begins and ends with identifying and solving

customer needs and values. assive  activity
and involvement is needed to do so.
£
|

   

  


    is a
development approach where company·s various
departments work closely together in cross-
functional teams, overlapping in the product-
development process to save time and increase
effectiveness.
£
|

   

   
     is an innovative

development approach that collects, reviews,
evaluates and manages new-product ideas from the
stakeholders.

0 It reates an innovation-oriented culture.

0 ompany can form a innovative management
system to collect and evaluate ideas.

 
   

V     V is the course of a product·s

sales and profits over its lifetime.
- It involves five distinct stages:
0
roduct development
0 Introduction
0 Growth
0 aturity
0 ecline
 
 
   

Sales and
Profits ($) Sales

Profits

Time
Product Growth Maturity Decline
Introduction
Development

Losses/
Investments ($)

Sales and Profits Over the Product¶s Life From Inception to Demise

 
   

V        begins when the company

finds and develops a product idea to offer to the
market.

0 uring the product development stage, sales are

zero as it is not introduced to the market and the
company·s investment costs increase.

 
   

  when the new product is first

   is
launched to the market and made available for
purchase.

    


  
  
0 akes time to be introduced
0
low sales growth
0 ittle or no profit
0 igh distribution and promotion expense needed to make
awareness among customers

 
   

ÿ
  when the new product start to satisfy the
ÿ
 is
markets and the sales climb quickly

    




  
0
ales increase quickly
0
rice stability or decline is needed to increase sale
0 New competitors enter the market
0
rofits increase with sales volume
0
roduct quality  features need to increase
0 New market segments and distribution channels are
entered to support the demand

 
   

£  a long-lasting stage of a product that

£ is
has gained consumer acceptance

    


£  
  

0 ate of sales growth slowdown

0 any suppliers/competitors enter to market
0
ubstitute products are also available
0 Increased promotion and  to support sales and profits

 
   

£odifying Strategies in £at rity Stage

0 arket modifying
0
roduct modifying
0 arketing mix modifying

 
   

£odifying Strategies


when a company tries
£
£
  
is
to increase the consumption of the current product.
0 Increase usage rate of existing users
0
earching for new users
0 New market segments

 
   

£odifying Strategies

 £    is when a company

tries to change the characteristics of a current
product.
0 hanging quality  features
0 xdding new tastes  packaging
0 ffering different sizes, model

 
   

£odifying Strategies

£  £! £    is when a

company changes one or more of the marketing
mix elements
0
rice
0
romotion
0 istribution channels
0 Increasing support services

 
   

   refers when sales decline or level off

for an extended time because of technological
advancement, shift in consumer demand and
increased competition.
 " 

 


  
  
0 aintain the product
0 arvest the product
0 rop the product
  
 


 
#$

Summary of Characteristics, Objectives, & Strategies

Sales Low sales
Costs High cost per customer
Profits Negative or low
Marketing Objectives Create product awareness and trial
Product Offer a basic product

Price Usually is high; use cost-plus formula

Distribution High distribution expenses
Advertising Build product awareness among early
adopters and dealers
 

 


 
#$

Summary of Characteristics, Objectives, & Strategies

Sales Rapidly rising sales

Costs Average cost per customer

Profits Rising profits

Marketing Objectives Maximize market share

Offer new product features, extensions,
Product service, and warranty
Price Price to penetrate market

Distribution Increase number of distribution outlets

Advertising Build awareness and interest in the
mass market
£  
 


 
#$

Summary of Characteristics, Objectives, & Strategies

Sales Peak sales
Costs Low cost per customer
Profits High profits, then lower profits
Marketing Objectives Maximize profits while defending
market share
Product Diversify brand and models
Price Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits