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Lecture 8

MKT 300 Lecture 8: MKT 300 Chapter 8 Notes

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University of Alabama
MKT 300
Susan Fant

Marketing Chapter 8 Notes First Stop: Samsung-Enriching Customers’ Lives Through New Product Innovation • Transition from a low-cost knock-off to a cutting-edge technology brand • Aimed to dethrone Sony ➢ Set out to become a premier brand ➢ Focused on customer-centered new product • Wants to be the first company that finds and develops the next product in consumer electronics New Product Development • Development of new products through the firm’s own research and development efforts ➢ New product – original products, product improvement and modifications, and new brands • Creating successful new products requires: ➢ Understanding consumers, markets, and competitors ➢ Developing products that deliver superior value to customers Major Stages in New Product Development • Idea generation • Idea screening • Concept development and testing • Marketing strategy development • Business analysis • Product development • Test marketing • Commercialization Idea Generation • Systematic search for new product ideas • Internal idea sources ➢ Intrapreneurial programs ➢ Internal social networks • External idea sources: ➢ Competitors ➢ Customers ➢ Distributors and suppliers • Crowdsourcing: inviting broad communities of people into the new product innovation process Idea Screening • Screening new product ideas to spot good ones and drop poor ones as soon as possible • Ways of screening new ideas: ➢ New idea write-up reviewed by a committee ➢ R-W-W framework – Real, win, worth doing Product Concept • A product concept is a detailed version of the product idea stated in meaningful consumer terms • A product idea is an idea for a possible product that the company can see itself offering to the market • A product image is the way a product is perceived by consumers Concept Development • Developing a new product into alternative product concepts ➢ Find out how attractive each concept is to customers ➢ Choose the best one Concept Testing • Testing a group of target consumers to find out the degree of consumer appeal toward the concepts • Methods: ➢ Presenting the concepts to consumers symbolically or physically or with a word or picture description ➢ Asking customers about their reactions to the concepts Marketing Strategy Development • Initial marketing strategy for a new product • The marketing strategy statement ➢ Describes the target market, the planned value proposition, and the sales, market-share, and profit goals for the first few years ➢ Outlines the planned product price, distribution, and marketing budget for the first year ➢ Describes the planned long-run sales, profit goals, and marketing mix strategy Business Analysis and Product Development • Business analysis: review of the sales, costs, and profit projections for a new product ➢ To find out whether the projections satisfy the company’s objectives • Product development: develop the product concept into physical product ➢ To ensure that the product idea can be turned into a workable market offering Test Marketing • The product and its proposed marketing program are introduced into realistic market settings • Fives the marketer an experience with marketing a product before the introduction • Tests the product and its marketing program • Costs can be high • Time consuming • Alternatives to standard test markets ➢ Controlled test markets ➢ Simulated test markets • Reasons for using alternative test markets ➢ Reduce the costs of test marketing ➢ Speed up the process Commercialization • Introducing a new product into the market • Considerations for launching a new product ➢ Time ➢ Place o Single location, region, national market, or international market Managing New Product Development • Requires a holistic approach ➢ Customer-centered new product
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