Principles of marketing chpter 09 theory
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The document discusses new product development and product lifecycles. It covers major stages in new product development including idea generation, screening, testing, and commercialization. It also discusses generating ideas from internal and external sources. The product lifecycle is described as having five stages: development, introduction, growth, maturity, and decline. Characteristics of each stage such as sales, costs, and profits are provided. The importance of customer-centered, team-based, and systematic approaches to new product development is emphasized.
Principles of marketing chpter 09 theory
- 1. Chapter-09 New-Product Development And Product Life-Cycle Strategies Theory Q1: mention the major stages in new product development. Stage 1: idea generation Stage 2: idea screening Stage 3: concept development & testing Stage 4: marketing strategy development Stage 5: Business analysis Stage 6: product development Stage 7: test marketing Stage 8: commercialization Q2: How can we generate the ideas for the development of new-product ? Idea generation, the systemetic search for new-product ideas. A company has to generate many ideas by internal and external sources. Using internal sources, the company can find new ideas through formal research and development from the brains of its executives, scientists, engineers, manufacturing staff and salespeople. Some companies have developed successful programs that encourage employees to think up and develop new-product ideas. Using external sources, the company can find new ideas from customers. Company engineers or salespeople can meet with and work alongside with customers to to get suggestions and ideas. Finally, some companies even give customers the tools and resources to design their own products. Beyond customers, competitors can be a good source of new-product ideas. Companies watch competitors’ ads to get clues about their new-product ideas.
- 2. Besides distributors and suppliers can also contribute for new-product ideas. Distributors are close to the market and can pass along information about consumer problems and new product possibilities. Suppliers can tell the company about new concepts, techniques and materials that can be used to develop new-product ideas. Q3: There should be a lot of ideas after idea generating. So, what should we do within these ideas; select, eleminate or what? The purpose of succeeding the following stages, we have to reduce some ideas, that we called ‘idea screening’. Idea screening helps spotting good ideas and dropping the poor ones. Many companies require their executives to write up new-product ideas on a standard form that can be reveiwed by a new-product committee. This write describes the product, the target market and the competition that makes some rough estimates of market size, product price, development time and costs, manufacturing costs and rate of return. Then finally, the committee evaluates the idea. Q4: Mention about the purpose of marketing strategy development for the new-product ideas. The marketing strategy statement consists of three parts- The first part describes the target market; the planned product positioning; and the sales, market share, and profit goalsfor the first few years. The second part outlines the product’s planned price, distribution, and marketing budget for the first few years. The third part describes the planned long run sales, profit goals and marketing mix strategy. Q5: Briefly Describes different types of test markets. After passes the concept and product test, the product goes into the stage ‘test marketing’. It is the stage at which the product and marketing program are introduced into more realistic market settings. Test marketing
- 3. gives the marketer experience with marketing the product before going to the great expense of full introduction. So, when using test marketing, companies usually choose one of three approaches- 1. Standard Test Market: Using this markets, the company finds a small number of representative test cities, conducts a full marketing compaign in these cities, consumer and distributor surveys, and other measures to gauge product performance. The results are uesd to forecast national sales and profits, discover potential product problems and fine tune the marketing program. It have some draw backs that it can be very costly and they may take a long time. 2. Controlled Test Markets: Several researcher firms keep controlled panels of stores that have agreed to carry new products for a free. Controlled test markets usually cost less than standard test markets. It also completed quickly than that.controlled test markets allows competitors to get a look at the companies new product. 3. Simulated Tes Markets: the company or research firms shows ads and promotions for a variety of products, including the new prroduct being tested, to a sample of consumers. It gives consumers a small amount of money and invites them to a real or laboratory store where they may keep the money or use it to buy the new product and competing brands. Q6: How can Customer-Centerd New-Product Development solve the problem of customer? give an example. New product development that focuses on finding new ways to solve customer problems and create more customer satisfying experiences called customer centered new product development. We can found that the most successful new products are once that are differentiated solve major customers problem and offer a compelling customer value proposition .
- 4. In another case, we can see that directly engaged company with their customers in the new product innovation process had twice the return on assets and triple the growth in operating income of farms that don’t. For an example Black &Decker’s Dewalt division they are strong in customer focus and they pay attention to the customers . They are engineer and marketing product managers spending their time for customer only who are trying to make their living with these tools . So, customer-centered new –product development begins and ends with solving customer problems . Q7: Explain why successful new-product development required a customer-center, team based and systematic afford? Successful new product development required a customer-center, team based and systematic afford for it’seffect . Customer Centerd New Product Development New product development that focuses on finding new ways to solve customer problems and create more customer satisfying experiences called customer centered new product development. We can found that the most successful new products are once that are differentiated solve major customers problem and offer a compelling customer value proposition . In another case, we can see that directly engaged company with their customers in the new product innovation process had twice the return on assets and triple the growth in operating income of farms that don’t . For an example Black & Decker’s Dewalt division they are strong in customer focus and they pay attention to the customers . They are
- 5. engineer and marketing product managers spending their time for customer only who are trying to make their living with these tools . So, customer-centered new –product development begins and ends with solving customer problems . About that expert asks ‘What is innovation after all , if not products and services that offer fresh thinking in a way that meet the need of customers?’ So, customer centered new product development is always putting customers first . Team Based New Product Development Good new product development also requires a total company, cross-functional effort. An approach to developing new products in which various company departments work closely together, overlapping the steps in product development process to save time and increase effectiveness . Such team usually include people from the marketing,finance, design, manufacturing and legal departments and even supplier and customers company. In the team based approach , if one area his snags , it works to resolved them while the team moves on . The team based approach does have some limitation . For Example, sometimes it creates more organizational tension and confusion than the more orderly sequential approach. Companies that combinesa customers centered approach with team based new product development gain a big competitive edge by getting the right new products to market faster. Systematic New Product Development The new product development process should be holistic and systematic rather then compartmentalized and haphazard. Otherwise ,few new ideas
- 6. will surface and many good ideas will sputter and die . To avoid this problems, a company can install an innovation system to collect, review, evaluate and manage new product ideas . The way can assign a cross functional innovation management committee to evaluate propose new product ideas and help bring good ideas to market and can create recognition programs to reward those who contribute the best ideas . There are two favorable outcome . First, it creats an innovation-oriented company culture . Second, it will yield a larger number of new product ideas ,among which will be found specially good one . So, systematic new product development requires a holistic approach for finding new ways to create valued customer experiences from generating and screening new products ideas to creating and rolling out want-satisfying product to customer. For an example Google , Apple , IDEO, 3M, Procter & Gamble and General Electric-the entire culture encourages , suppose and reward innovation and they are successful. Q8: What is product life cycle? How many stages it has? Grafically show the product life cycle. Product life cycle means means the course of a product’s sales and profits over its lofe time. It has 5 distinct stages.they are given below-a. product development stage b.introduction stage c.growth stage d.maturity stage and
- 7. e.decline stage Q9: How would be the product life cycle concept about styles, fashion and fades? Show graphically. Style- It is a basic and distinctive mode of expression.Once a style is invented,it may last for generations passing in and out of vogue.a style has a cycle showing several periodes of renewed interest. Fashion-A fashion is a currently accepted or popular style in a given field.Fashions tend to grow slowly,remain popular for a while and then decline slowly. Feds- Feds are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. Q10: What is the moral of product life cycle? The moral of product life cycle is that companies must continually innovate or else they risk extinction.No matter how successful its current product lineup,a company must skillfully manage the life cycles of existing products for future success.And to grow it must develop a steady stream of new products that bring new value of customers. Q11: What is the characteristics if product development stage? Product development begins when the company finds and developes a new product idea.During product deveopement,sales are zero and the company’s investment is large.There is no profit in thi stage. Q12: What is the characteristic of introduction and growth stage? > Characteristic of introduction and growth stage are given below-
- 8. Characteristics Introduction Growth Sales low rapidly rising Costs high average Proits negative rising profits Customers innovators early adopters Q13: In which stage we get more profit then others and why? In maturity stage we get more profit then others.Because in this stage rate of sale is very high,cost is low and a stable number of competitor is present here.In this stage we should follow the competitor to sell our product more.We should prove that our product have some special quality then others. For this reasons we gwt more profit from this stage. Q14: What type of product should offer in introduction stage?Write down the advertising and sales promotion strategies of all stages. A basic product should offer in introduction stage. Advertising strategy- In introduction stage more advertising is needed.As our product is new in the market so we should know the customer about our product. In growth stage we should build awareness and interest in the mass market. In maturity stage we should advertise in this way that our product have some different characteristics then others.We should also add here the benefits of our product.
- 9. In last stage we should reduce the price of product for regular customer for why they are satisfied to our product. Sales promotion- In first stage huge sales promotion is needed to introduce our product to the customer. In second stage sales promotion should be that by which we can fulfill the customers demand perfectly. In this stage sales promotion should be increase to encourage brand switching. In the last stage sales promotion should be reduce to minimal level. Because we can’t increase sell at this stage as we wish. Q15: Brifly discuss about the product dicisions and social responsibility. We should ensure the product’s safty to the customers. We must comply with specific laws regarding product quality and safety.If any consumer have been injured by a produt with a defective design,they can sue to the dealers.By facing this problem,company’s reputetion is hampered.Consumers faith can be lost for the company.For reduce this problem some company offer written product warranties to convince customers of their product quality. We should not sell such a thing that harms our society.We can follow our competitor but should not copy them.We should not use similar product’s brand name to our product.By doing this we make our customer confused and they lost their trust to us. At last we should bear in mind that product decision and social responsibility is a big thing about selling a product.So, at the time of production til selling we must be carefull about the product’s safety and quality.
- 10. Q16: Brifly discuss about international product and service marketing. International marketing varies product to product and service to servicre. International marketers face special challenges for selling product.First they must figure out what product and service to introduce and in which countries.Then they must decide how much to standardize or adapt their product and service for the world market. Because the way of marketing is not same in all countries.Product design,manufacturing and marketing cost should be varied country to country. Packaging also presents new challenges for international marketers.Because name,labels and colors may not be translate easily from one country to another.Packaging may also need to be tailored to meet the physical characteristics of consumers in various parts of the world.For instance,soft drinks are sold in smaller cans in Japan to better fit the smaller Japanese hand. Service marketers also face special challenges when going global.Such as-commercial banking industry. Professionals and business services industries,such as- accounting, management consulting and advertising have also globalized. At last we can say that we shoud not confined our thinking about a country for the purpose of international business.We must think globaly.