Ch 9 Product Development

8/2/2019 Ch 9 Product Development

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New productdevelopment


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Categories of new product New to the world

New product lines

Addition to the existing product lines

Improvement &revision of existingproduct

Repositioning

Cost reduction


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Hindrances to newproduct development Shortage of important ideas

Fragmented segments

Social & govt. constraints

Cost of development

Capital shortages

Faster required development time

Shorter product life cycles


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Stages of new productdevelopment Idea generation

Idea screening

Concept development & testing Marketing strategy development

Business analysis

Product development Test marketing

Commercialization


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Idea generation Interacting with others

Creative techniques

-attribute listing-forced relationship

-morphological analysis

-reverse assumption analysis-new context

-mind mapping


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Idea screening Whether the product idea matches the existing

products

The degree to which the new product cancannibalize the sales of the existing products

Companys ability to produce & market theproduct thus developed

Buyer behavior & the probable changes in theenvironment

Two errors ;1)go error

2)drop error


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Concept development Selecting the strongest concept from

the available alternatives

Eliminating the concepts that are notapproved or favored by the targetmarket

Identifying consumer criteria ofevaluating the product

Determining the desired features of theproduct

Deciding upon the product positioning


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Concept testing &analysis

Concept testing

Conjoint analysis

Marketing strategy

Business analysis


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Product development Identifying the target customers Positioning strategy of the new company Developing the attributes of the new product Competitors current activities & strategy Points for differentiation Marketing issues

Financials issues Legal & regulatory issues Production requirements Core competencies


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Test marketing Sales wave test

Simulated test marketing

Controlled test marketing

test markets


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Commercialization When

Where

To whom


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Consumer adoptionprocess Awareness

Interest

Evaluation

Trial

Adoption


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Factors influencing theadoption process Readiness to try new products &

personal influence

Characteristics of the innovation Organizations readiness to adopt

innovations


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Branding A brand is a name, term, sign, symbol or

design or a combination of them, intended toidentify the goods or services of one seller or

group of sellers & differentiate them from thoseof competitors Brand name is that part of a brand which can

be vocalized

Brand mark is that part of a brand which canbe recognized , but not utter able A trade mark a brand or part of a brand that is

given legal protection


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Functions of branding Product differentiation

Advertisement

Better quality of goods

Protection of goods

Consumer protection

Bridge between seller & buyer


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Brand conveys Attributes

Benefits

Values

Culture

Personality

User


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Brand equityIt is the amount of power & value the brand enjoys in the market

placeFactors that influence most powerful brands

Brands offer more than what they expect

Brand stays associative

Customers value proposition dictates the pricing of the brand

Right positioning of the brand

The brand maintains consistency

The portfolio of brands are well maintained

The firm utilizes all its marketing efforts to build a brand equity Knows what a brand means to its customers

Properly supported for a longer period of time

Co. checks for brands performance from time to time


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Advantages of brandequity More trade leverage in bargaining with

distributors & retailers

Can charge a higher price thancompetitors

Easily launch extensions

Defense against price competition


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Branding decisions Branding decisions

Brand sponsor decisions

Brand name decisions

Brand strategy decisions

Brand repositioning decision


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Benefits of branding Easy to process orders &track problems

Legal protection

Loyal & profitable set of customers

Segment markets

Easier to launch new brands


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Brand sponsor decision Manufacturer brand

Distributor brand

Licensed brand


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Brand name decision Individual names

Blanket family name

Separate family names

Company-individual names


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Brand strategy decision Line extension

Brand extension

New brands

Co brands

Brand proliferation

Brand relaunch Brand rejuvenation


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Desirable qualities for abrand name It should suggest product benefits

Suggest product category

Suggest high imaginary qualities Easy to spell, pronounce, recognize, &

remember

Should be distinctive Should not carry poor meanings in other

languages


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Brand building tools Public relations & press releases Sponsorships Clubs & consumer communities Factory visits Trade shows Public facilities Social cause marketing High value for money Founders or a celebrity personality


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packaging Wrapping, compressing, filling, or

creating of goods for the purpose of

protection of goods & their convenienthandling

Package is the case, container, wrapper,

or other receptacle for packing goods


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Functions of packing Protection of the product

Appeal to the customer

Perform functionally

Convenience

Cost effective

Easy handling Preventing adulteration

Publicity to product


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Requisites of a goodpackage Suitability

Protective

Requirements of consumers

Packaging materials

Cost

Attraction value Size & shape

Durability

Documents

Ch 9 Product Development