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Chapter 9

MKTG 300 Chapter Notes - Chapter 9: Business Casual, Consumer Product Safety Act, Weight Watchers


Department
Marketing
Course Code
MKTG 300
Professor
O'' Neal Carlton
Chapter
9

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Marketing 300: Chapter 9 Notes
Abbreviations: - change; comp - company; mktg - marketing; g/s - goods & services; p/s - products & services
New Product Development Strategy
New Product Development Strategy  development of original products, product improvements, product
modifications, and new brands through the firm’s own product development efforts
New products bring new solutions and variety to customers’ lives; key source of growth for companies
Innovations fail bc product may be poorly designed, incorrectly positioned, overestimate market size,
costs of development are higher than expected, competitors fighting harder, poor mktg research findings
Major Stages: Idea generation  idea screening  concept development and testing  mktg strategy
development  business analysis  product development  test mktg  commercialization
Idea Generation  systematic search for new product ideas
Major sources: internal/external sources like customers, competitors, suppliers, distributors, and others
Crowdsourcing open-innovation new product idea programs; company invites broad communities of people
(customers, employees, independent scientists, researchers, even the public) into the innovation process
Idea Screening helps spot good ideas and drop poor ones ASAP (reduce # of ideas to profitable products)
R-W- (“real, win, worth doing”) framework: 1) Is there a real need and desire for the product? 2) Can we
win? Do we have the resources to make it a success? 3) Is it worth doing? Does it fit growth strategy?
Product Concept detailed version of new product idea stated in meaningful consumer terms
Product Image: the way consumers perceive an actual or potential product
Concept Testing testing new product concepts with groups of target consumers to find out if the concepts have
strong consumer appeal (picture or word description followed by some questions)
Marketing Strategy Development  designing initial mktg strategy for new product based on the product concept
1) describes the target market; planned value proposition; sales, market-share, profit goals for few years
2) outlines product’s planned price, distribution, and marketing budget for the 1st year
3) describes the planned long-run sales, profit goals, and marketing mix strategy
Business Analysis  a review of the sales, costs, and profit projections for a new product to find out whether
these factors satisfy the company’s objectives
Product Development  developing the product concept into a physical product to ensure that the product idea
can be turned into a workable market offering
Huge investment where R&D dept. Will develop and test many physical versions of the product concept
Test Marketing  the product and its proposed mktg program are tested in realistic market settings
Costs can be high & takes time that may allow market opportunities to slip by, but it pays off when unsure
Both alternatives to test markets reduce the costs and speed up the process
Controlled test markets: products are tested among controlled panels of shoppers & stores
Simulated test markets: researchers measure consumer responses to new products and mktg tactics in
laboratory stores or simulated online shopping environments
Commercialization  introducing a new product into the market (will face high costs)
Cost examples: advertising, sales promotion, build or rent a manufacturing facility, or other mktg efforts
1) decide on timing: if product can be improved further, if economy is down, if it will eat into other
company product sales, or if competitors are ready to introduce their competing products
2) where to launch: single location, region, national or international market
Managing New Product Development
Customer-centered New Product Development  focuses on finding new ways to solve customer problems and
create more customer-satisfying experiences -- understanding customers and involving them in the process
Team-based New Product Development  various company depts. work closely together, overlapping the steps
in the product development process to save time and increase effectiveness
cross-functional teams help market more quickly, save time, and increase effectiveness
Systematic New Product Development  holistic and systematic; innovation manager, cross-functional innovation
management committee, recognition programs to reward those contributing the best ideas
Innovation Management System  collect, review, evaluate and manage new product ideas
find more resources at oneclass.com
find more resources at oneclass.com
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