MARK101 Chapter Notes - Chapter 7: Business Analysis, Marketing Strategy, Marketing Mix
13 Jun 2018
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NEW PRODUCT DEVELOPMENT
I. Product
A Product is anything that can be offered to a market for attention, acquisition, use, or
consumption and that might satisfy a want or a need.
Includes: physical objects
A Service is a form of product that consists of activities, benefits, or satisfactions offered for
sale that are essetiall itagile ad do’t result i the owership of athig
II. Definition
- The first stage of a product life cycle
- Companies develop ideas, undertake research, prepare prototype (first model), pre test
the products, make modifications be4 launch
- Eliminate problems and improve positive features
- New product can involve substantial cost for a business
III. Classification
- New to the market: new tech never seen be4 (invention)
- New to the company: already in the market but first time produced by the company
(new to categories entry)
- New to the product line: extension of current company line (line extension)
- New to the product: modification and improvements to a specific product (new benefit
- Repositioning: new use or application
IV. Stages
1. Idea generation
- Idea Generation is the Systematic Search for New Product Ideas Obtained Internally
From Employees (up to 55%) and Also From customers (28), competitors (30),
distributors, suppliers.
- Open to ideas from inter source ( scientist, engineer, marketer) and external
source(customers, competitions, partners)
- Ver sall % of ew produt ideas eoe part of org’s produt i
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2. Screening
- Eliminate ideas that not feasible, identify the most promising ideas
- Estimate:
• Market size
• Product price
• Development time and costs
• Manufacturing costs
• Rate of return
3. Concept evaluation:
- New product ideas in 2 concepts
- Test the new product concepts w target customers
- Choose the one that has the strongest appeal to target customers
4. Marketing strategy
- Describe overall: target market, planned positioning, sales and profit costs, market
share
- Short term: product planned price, distribution, marketing budget
- Long term: sales and profit goals, marketing mix strategy
5. Business analysis
- Fit to the company current offerings and its overall objectives
- How product affect costs, sales and profits
6. Product development
- Covert concept in2 actual product
- Develop prototype
- Investment in design, materials
7. Test marketing
- Test Marketing is the Stage Where the Product and Marketing Program are Introduced
into More Realistic Market Settings
- Elements may be tested
• Budget level
• Product
• Positioning strategy
• Advertising
• Distribution
• Pricing
• Branding
• Packaging
8. Commercialization
- Launch new product in2 the market
- High cost this stage
V. Causes of new product failures
- Not itroduig superior produt
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
A product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or a need. A service is a form of product that consists of activities, benefits, or satisfactions offered for sale that are esse(cid:374)tiall(cid:455) i(cid:374)ta(cid:374)gi(cid:271)le a(cid:374)d do(cid:374)"t result i(cid:374) the ow(cid:374)ership of a(cid:374)(cid:455)thi(cid:374)g. The first stage of a product life cycle. Companies develop ideas, undertake research, prepare prototype (first model), pre test the products, make modifications be4 launch. New product can involve substantial cost for a business. New to the market: new tech never seen be4 (invention) New to the company: already in the market but first time produced by the company (new to categories entry) New to the product line: extension of current company line (line extension) New to the product: modification and improvements to a specific product (new benefit. Idea generation is the systematic search for new product ideas obtained internally.
