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Product Development (s)

Management (MGM)
Course Code

of 4
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Product Development
5.1 ± Marketing and Product Development
Marketing research reveals what consumers want and points the way toward business opportunities. It is
The company launches a feasibility study, which is a study to determine if any business opportunity is
possible, practical, and viable. The production department will build a prototype and the marketing
department must show the aircraft to potential customers and measure their reactions.
5.2 ± Invention or Innovation?
Inventions are new devices, methods, or processes developed from study and experimentation. Businesses
use inventions to create original solutions to meet consumer needs (e.g. the invention of the wheel made
the car). Innovations are products or service that uses new technology, items, or processes to change
existing products, to change the methods used to produce products, or to change the ways used to
distribute them (e.g. shipping companies developed tracking system).
5.3 ± The stages of product development
There are several stages a marketer must go through to bring a new product to market.
1. Idea generation: $FRPSDQVmarketing research reveals that consumers want either a new
product or an existing product modified. They would brainstorm how to make the product better.
2. Idea screening: Companies need to test both consumer reaction to the new idea and the
competitive situation in the market. There are many factors that need to be taken into
consideration before an idea can move one step closer to becoming a reality.
3. Concept development: The Company might design and make a prototype. A prototype is sample
of what the product might look like and how it might operate. It is also market-tested to determine
if consumers like it.
4. Market strategy: The Company develops a marketing strategy to target the primary market and
puts together a marketing plan to implement this strategy.
5. Feasibility study: A study to determine if any business opportunity is possible, practical, and
viable. The product must be one that the company can make and sell, that consumers want and at
a price they will pay, and that will produce a profit for the company.
6. Product design: The product design takes into account the preferences of the primary market. The
product design also includes the peripherals, such as warranty, instruction manual, packaging, and
service information.
7. Test marketing: To test consumer acceptance of the product, the company might allow a few
people who fit the primary market profile. Afterward, the company would have the participants
fill out a survey that asked how frequently they used the product and specific questions as such.
8. Market entry: At this stage, the product enters the product life cycle.
5.4 ± Product development and utility
Form utility ± the relationship between a product or services to form its function.
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Form utility must consider
x Material utility: used to produce the product
x Scent: manufactured or real, it helps sell the product
x Flavour: makes a product unique
x Design: most important, it helps function properly
x Packaging: holds the product together
Information utility ± provides consumers with instructions, directions, and user manuals (e.g. know and
understand the benefits of the product)
Place utility ± makes it possible for the consumer to purchase the product (e.g. making it easy to find)
Time utility ± product is available when the consumer wants it (e.g. selling pumpkins during
Possession utility ± easy to purchase (e.g. offering credit terms to buy now and pay later)
5.5 Product Mapping
Product mapping ± grouping similar products into categories to create competitive segments, and using
those segments to create a market for a specific product
Marketing opportunity analysis ± is also called a situational analysis because it defines the various
opportunities or market situations for a specific brand.
x Part 1: Overall Market ± The MOA identifies the category under investigation that defines the
brand. The category is broad and will include every type of product that belongs in the category.
x Part 2: Indirect competition ± The MOA groups the competitive brands by features. Product
development people regard indirect competition as possible marketing opportunities, but they
would only consider pursuing a particular opportunity after they had exhausted all the
opportunities within the direct competition category.
x Part 3: Direct competition ± The third stage of the MOA identifies all competitive brands that
compete for a share of the same market. These products are practically identical. Markets would
analyze any gaps missing and determine if they would have market potential. MP =N*P*Q
Benefit analysis: FAB and CBA
Chapter 6 Positioning and Branding
6.1 ± What is positioning?
A position is a stance, a perception, an attitude, or a point of view. Marketers want to position their
product or service in order to crate an image of the brand that they want the consumer to accept. Many
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marketers define positioning as the attempt by a business to obtain a share of mind, that is, to achieve top-
of-the-mind awareness among target consumers.
6.2 ± Types of positioning
Benefit positioning ± consumers expect every product they purchase to benefit them in some way. This is
why many product offer features that other products do not (e.g. shoes for comfort).
Target positioning ± To gain an effective target-market position, all of a branGVPDUNHWLQJPXVWEH
focused on a specific consumer segment. A target position should cause the people in the target market to
Mac books for students in the arts).
Price positioning ± Offer the most expensive product in a category, or offer the least expensive product in
a category. A luxury good offers status more than quality. Products also compete to establish the low-end
position. Some businesses want the consumer to think that their products are inexpensive (e.g. Ferrari ±
high, Ikea ± low).
Distributing positioning ± Some marketers use a unique sales technique and become known for their
method of distribution. Companies can also position their product by placing it in a channel that is not
used by competitors (e.g. amazon.com only online).
Service positioning ± positioning itself to be well known for having excellent customer service (e.g.
6.3 How to position a product
Long term positioning ± Marketers usually try to select a position that their product can maintain for a
long time. They avoid basing their positioning on new technology.
Relevant positioning ± Marketers also have to be sure that the position of their product is relevant to the
consumer. It must appeal and relate to the consumer to motivate them to buy the product.
Clear and coherent positioning ± They try to ensure that the position of their product is clear and coherent;
that their message is guaranteed to be understooGHJWLPKRUWRVDOZD\VIUHVK
Distinctive positioning ± A company that does not position its product in a distinctive manner or that
decides not to position its product at all will discover that consumers have no reason to choose that
costly advertising.
6.4 Branding
itself as a product.
Brand names:
Corporate dominant names: includes the name of the manufacturing company (apple)