MKTG1001 Lecture Notes - Ikea, Business Analysis, Marketing Strategy
Learning Objectives for week 5:
1. Explain how companies find and develop new product ideas (pp 238-239)
A business can obtain new products by acquisition (buying companies or licences to
produce someone else’s product), or by new-product development efforts. New products
include original products, product improvements, product modifications and new brands
that the business develops from its own research and development.
Idea generation Idea screening Concept development and testing Marketing strategy
development Business analysis Product Development Test Marketing
Commercialisation.
Step 1: Idea Generation.
Systematic search for new-product ideas. A company typically develops
hundreds or even thousands of ideas to find a few good ones. Major sources of
new product ideas include internal sources, and external sources such as
customers, competitors, distributors and suppliers, and others. Many companies
are now using ‘crowd-sourcing,’ which invites broad communities of people into
the new-product innovation process.
Step 2: Idea Screening.
Purpose of screening is to reduce the number of ideas to be considered, spotting
good ideas and dropping poor ones as soon as possible. Product development
costs rise greatly in the later stage, so companies only want to go ahead with
product ideas that will turn into profitable products.
Step 3: Concept Development and Testing.
A product concept is an idea that consumers favour products that offer the most
quality, performance and features, and that the organisation should therefore
devote its energy to making continuous product improvements; a detailed version
of the new-product idea stated in meaningful consumer terms. Concept
development refers to creating a number of alternative product concepts, and
choosing the best one based on how attractive each concept is to customers.
Concept testing calls for testing new product-concepts with a group of target
consumers to find out if the concepts have strong consumer appeal.
Step 4: Marketing Strategy Development.
Designing an initial marketing strategy for a new product based on the product
concept. The marketing statement strategy involves a description of the target
market, the planned value proposition and the sales, market share and profit goals
for the first few years. The second part of the statement outlines the products
planned price, distribution and marketing budget for the first year. And the third
part describes the planned long-run sales, profit goals and marketing mix
strategy.
Step 5: Business Analysis.
Business analysis is a review of the sales, costs and profit projections for a new
product to find out whether these factors satisfy the company’s objectives. This
can be by reviewing sales history of similar products and conduction of market
surveys.
Step 6: Product Development.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Explain how companies find and develop new product ideas (pp 238-239) A business can obtain new products by acquisition (buying companies or licences to produce someone else"s product), or by new-product development efforts. New products include original products, product improvements, product modifications and new brands that the business develops from its own research and development. Idea generation idea screening concept development and testing marketing strategy development business analysis product development test marketing . A company typically develops hundreds or even thousands of ideas to find a few good ones. Major sources of new product ideas include internal sources, and external sources such as customers, competitors, distributors and suppliers, and others. Many companies are now using crowd-sourcing," which invites broad communities of people into the new-product innovation process. Purpose of screening is to reduce the number of ideas to be considered, spotting good ideas and dropping poor ones as soon as possible.
