153366588 product-marketing-1
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The document discusses the product life cycle and new product development process. It covers: 1. The stages of the product life cycle - introduction, growth, maturity, decline - and how marketing strategies differ at each stage. 2. The new product development process which includes idea generation, screening, concept development/testing, market strategy development, business analysis, product development, test marketing, and commercialization. 3. Factors that influence the diffusion and adoption of new products by different customer groups over time.
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153366588 product-marketing-1
- 1. PRODUCT • PRODUCT VARIETY • QUALITY • DESIGN • FEATURES • WARRANTIES • SERVICES • BRAND NAME • SIZE & FORM • PACKAGING • RETURNS Piyoosh Bajoria
- 2. Time Introduction Profits Sales Growth Maturity Decline Sales and Profits Over the Product’s Life From Development to Decline Product Life Cycle Development Piyoosh Bajoria
- 3. Product Life Cycle • Demand / Technology life Cycle • Product Form Life Cycle • Brand Life Cycle Piyoosh Bajoria
- 5. The Shape of the Sales Curve May Vary... Time Time Time Time Sales SalesSales Sales TRADITIONAL FAD SEASONAL (CYCLICAL) REVIVAL or NOSTALGIA Piyoosh Bajoria
- 6. Marketing Strategies for PLC INTRODUCTION GROWTH MATURITY DECLINE Product Strategy Distribution Strategy Promotion Strategy Pricing Strategy Limited models Frequent changes More models Frequent changes. Large number of models. Eliminate unprofitable models Limited Wholesale/ retail distributors Expanded dealers. Long- term relations Extensive. Margins drop. Shelf space Phase out unprofitable outlets Awareness. Stimulate demand.Sampling Aggressive ads. Stimulate demand Advertise. Promote heavily Phase out promotion Higher/recoup development costs Fall as result of competition & efficient produc- tion. Prices fall (usually). Prices stabilize at low level. Piyoosh Bajoria
- 7. SalesSales CostsCosts ProfitsProfits Marketing ObjectivesMarketing Objectives ProductProduct PricePrice Low salesLow sales High cost per customerHigh cost per customer Negative or lowNegative or low Create product awareness and trialCreate product awareness and trial Offer a basic productOffer a basic product Usually is high; use cost-plus formulaUsually is high; use cost-plus formula DistributionDistribution High distribution expensesHigh distribution expenses AdvertisingAdvertising Build product awareness among early adopters and dealers Build product awareness among early adopters and dealers Introduction stage Piyoosh Bajoria
- 8. SalesSales CostsCosts ProfitsProfits Marketing ObjectivesMarketing Objectives ProductProduct PricePrice Rapidly rising salesRapidly rising sales Average cost per customerAverage cost per customer Rising profitsRising profits Maximize market shareMaximize market share Offer new product features, extensions, service, and warranty Offer new product features, extensions, service, and warranty Price to penetrate marketPrice to penetrate market DistributionDistribution Increase number of distribution outletsIncrease number of distribution outlets AdvertisingAdvertising Build awareness and interest in the mass market Build awareness and interest in the mass market Growth Stage Piyoosh Bajoria
- 9. SalesSales CostsCosts ProfitsProfits Marketing ObjectivesMarketing Objectives ProductProduct PricePrice Peak salesPeak sales Low cost per customerLow cost per customer High profits, then lower profitsHigh profits, then lower profits Maximize profits while defending market share Maximize profits while defending market share Diversify brand and modelsDiversify brand and models Price to match or best competitorsPrice to match or best competitors DistributionDistribution Build more intensive distributionBuild more intensive distribution AdvertisingAdvertising Stress brand differences and benefitsStress brand differences and benefits Maturity stage Piyoosh Bajoria
- 10. MarketMarket ModificationModification MarketMarket ModificationModification ProductProduct ModificationModification ProductProduct ModificationModification MarketingMarketing MixMix ModificationModification MarketingMarketing MixMix ModificationModification Maturity Stage Product Defense Strategies Maturity stage Piyoosh Bajoria
- 11. SalesSales CostsCosts ProfitsProfits Marketing ObjectivesMarketing Objectives ProductProduct PricePrice Declining salesDeclining sales Low cost per customerLow cost per customer Declining profitsDeclining profits Reduce expenditure and maintain, reposition, harvest or drop the product Reduce expenditure and maintain, reposition, harvest or drop the product Phase out weak itemsPhase out weak items Cut priceCut price DistributionDistribution Go selective: phase out unprofitable outletsGo selective: phase out unprofitable outlets AdvertisingAdvertising Reduce to level needed to retain hard-core loyal customers Reduce to level needed to retain hard-core loyal customers Decline stage Piyoosh Bajoria
- 12. NEW PRODUCT DEVELOPMENT Piyoosh Bajoria
- 13. Objectives • Challenges in New Product Development (NPD) • Organizational Structure & NPD • Stages & Management of NPD • Diffusion & Adoption of New Products • Look at the Product lifecycle • Fads, style, etc Piyoosh Bajoria
- 14. • Original products, product improvements, product modifications and new brands that the company develops through its own research and development. What is new product Piyoosh Bajoria
- 15. Categories of New Products New-To-The-WorldNew-To-The-World New Product LinesNew Product Lines Product Line AdditionsProduct Line Additions Improvements/RevisionsImprovements/Revisions Repositioned ProductsRepositioned Products Lower-Priced ProductsLower-Priced Products Six Categories of New Products Six Categories of New Products Piyoosh Bajoria
- 16. • Not introducing a “superior” product • Overestimation of Market Size • Product Incorrectly Positioned, Priced or Advertised • Blow out in costs of Product Development • Competitive Actions - price wars etc • Disharmony between marketing and R&D Causes of new product Failure Piyoosh Bajoria
- 17. To create successful new products, the company must: • understand its customers, markets and competitors, • develop products that deliver superior value to customers. Causes of new product Failure Piyoosh Bajoria
- 18. New Product Development Process IdeaIdea GenerationGeneration ConceptConcept DevelopmentDevelopment and Testingand Testing MarketingMarketing StrategyStrategy DevelopmentDevelopment IdeaIdea ScreeningScreening BusinessBusiness AnalysisAnalysis ProductProduct DevelopmentDevelopment MarketMarket TestingTesting CommercializationCommercializationPiyoosh Bajoria
- 19. Original Products Original Products Product Improvements Product Improvements Product Modifications Product Modifications New Brands New Brands Acquired Companies Acquired Companies Acquired Patents Acquired Patents Acquired Licenses Acquired Licenses Strategies for Obtaining New Product Ideas New product development strategies Piyoosh Bajoria
- 20. Step 1: Idea Generation CustomersCustomers EmployeesEmployees DistributorsDistributors CompetitorsCompetitors R & DR & D ConsultantsConsultants Creative ThinkingCreative Thinking Sources ofSources of New-ProductNew-Product IdeasIdeas Sources ofSources of New-ProductNew-Product IdeasIdeas Piyoosh Bajoria
- 21. Attribute Listing The process of listing down major attributes of existing products & modifying each attribute for an improved product Piyoosh Bajoria
- 22. Forced Relationships In this process several objects are considered in relationships with each other to create a new product. Piyoosh Bajoria
- 23. Morphological Analysis This method calls for identifying structural dimensions of a problem and examining the relationship amongst them. Piyoosh Bajoria
- 24. Need /problem identification This method calls for identifying needs, problems & even asking for ideas. Piyoosh Bajoria
- 25. Brainstorming The process of getting a group to think of unlimited ways to vary a product or solve a problem. Piyoosh Bajoria
- 26. • Process to spot good ideas and drop poor ones as soon as possible. • Many companies have systems for rating and screening ideas which estimate: • Market Size • Product Price • Development Time & Costs • Manufacturing Costs • Rate of Return • Then, the idea is evaluated against a set of general company criteria. Step 2: Idea Screening Piyoosh Bajoria
- 27. 1. Develop New Product Ideas into Alternative Detailed Product Concepts 1. Develop New Product Ideas into Alternative Detailed Product Concepts 2. Concept Testing - Test the New Product Concepts with Groups of Target Customers 2. Concept Testing - Test the New Product Concepts with Groups of Target Customers 3. Choose the One That Has the Strongest Appeal to Target Customers 3. Choose the One That Has the Strongest Appeal to Target Customers Step 3: Concept Development & Testing Piyoosh Bajoria
- 28. Part Two Describes Short-Term: Product’s Planned Price Distribution Marketing Budget Part Two Describes Short-Term: Product’s Planned Price Distribution Marketing Budget Part Three Describes Long-Term: Sales & Profit Goals Part Three Describes Long-Term: Sales & Profit Goals Marketing Strategy Statement Formulation Part One Describes Overall: Target Market Planned Product Positioning Sales & Profit Goals Market Share Part One Describes Overall: Target Market Planned Product Positioning Sales & Profit Goals Market Share Step 4: Market Strategy Development Piyoosh Bajoria
- 29. Business Analysis Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives Business Analysis Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives If Yes, Move to Product Development If Yes, Move to Product Development If No, Eliminate Product Concept If No, Eliminate Product Concept Step 5: Business Analysis Step 6: Product development Piyoosh Bajoria
- 30. AdvertisingAdvertising PackagingPackaging ProductProductBudget LevelsBudget Levels Positioning Strategy Positioning Strategy DistributionDistributionPricingPricing BrandingBranding Elements that May be Test Marketed by a Company Test Marketing is the Stage Where the Product and Marketing Program are Introduced into More Realistic Market Settings. Step 7: Test Marketing Piyoosh Bajoria
- 31. When?When? Where?Where? Commercialization is the Introduction of the New Product into the Marketplace. Step 8: Commercialization Piyoosh Bajoria
- 32. Step 8: Commercialization ProductionProduction Inventory BuildupInventory Buildup Distribution ShipmentsDistribution Shipments Sales TrainingSales Training Trade AnnouncementsTrade Announcements Customer AdvertisingCustomer Advertising Steps inSteps in Marketing aMarketing a New ProductNew Product Steps inSteps in Marketing aMarketing a New ProductNew Product Piyoosh Bajoria
- 33. Diffusion The process by which the adoption of an innovation spreads. Piyoosh Bajoria
- 34. Categories of adopters in Diffusion process • Innovators • Early adopters • Early majority • Late majority • Laggards Piyoosh Bajoria
- 36. Diffusion process and product life cycle curve Innovators Early adopters Early majority Late majority Laggards ProductProduct life cyclelife cycle curvecurve DiffusionDiffusion curvecurve Introduction Growth Maturity Decline Sales Piyoosh Bajoria
- 37. Product characteristics and the rate of adoption • Complexity • Compatibility • Relative advantage • Observability • Triability Piyoosh Bajoria
- 38. Marketing implications of the adoption process Communication aids the diffusion process • Word-of-mouth • Direct from marketer Piyoosh Bajoria