153366588 product-marketing-1
TRANSCRIPT
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PRODUCT
• PRODUCT VARIETY
• QUALITY
• DESIGN
• FEATURES • WARRANTIES
• SERVICES
• BRAND NAME
• SIZE & FORM
• PACKAGING
• RETURNS
Piyoosh Bajoria
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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
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Product Life Cycle
• Demand / Technology life Cycle
• Product Form Life Cycle
• Brand Life Cycle
Piyoosh Bajoria
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Time
Product category
profits
Product category
sales
Introductory Introductory stagestage
Growth Growth stagestage
Maturity Maturity stagestage
Decline stage
Product Life Cycle
Piyoosh Bajoria
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The Shape of the Sales Curve May Vary...
Time
Time Time
Time
Sale
s
Sale
sSa
les
Sale
s
TRADITIONAL FAD
SEASONAL (CYCLICAL) REVIVAL or NOSTALGIA
Piyoosh Bajoria
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Marketing Strategies for PLCINTRODUCTION GROWTH MATURITY DECLINE
ProductStrategy
DistributionStrategy
PromotionStrategy
PricingStrategy
Limited modelsFrequent changes
More modelsFrequent changes.
Large number of models.
Eliminate unprofitable
models
LimitedWholesale/
retail distributors
Expanded dealers. Long-term relations
Extensive.Margins drop.Shelf space
Phase out unprofitable
outlets
Awareness. Stimulate
demand.Sampling
Aggressive ads.Stimulatedemand
Advertise. Promote heavily
Phase outpromotion
Higher/recoupdevelopment
costs
Fall as result ofcompetition &
efficient produc-tion.
Prices fall (usually).
Prices stabilize at low level.
Piyoosh Bajoria
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Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative or low
Create product awareness and trial
Offer a basic product
Usually is high; use cost-plus formula
Distribution High distribution expenses
Advertising Build product awareness among early adopters and dealers
Introduction stage
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Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer
Rising profits
Maximize market share
Offer new product features, extensions, service, and warranty
Price to penetrate market
Distribution Increase number of distribution outlets
Advertising Build awareness and interest in the mass market
Growth Stage
Piyoosh Bajoria
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Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak sales
Low cost per customer
High profits, then lower profits
Maximize profits while defending market share
Diversify brand and models
Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits
Maturity stage
Piyoosh Bajoria
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Market Market ModificationModification
Product Product ModificationModification
MarketingMarketingMixMix
ModificationModification
Maturity Stage Product Defense Strategies
Maturity stage
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Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining sales
Low cost per customer
Declining profits
Reduce expenditure and maintain, reposition, harvest or drop the product
Phase out weak items
Cut price
Distribution Go selective: phase out unprofitable outlets
Advertising Reduce to level needed to retain hard-core loyal customers
Decline stage
Piyoosh Bajoria
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NEW PRODUCT DEVELOPMENT
Piyoosh Bajoria
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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
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• Original products, product improvements, product modifications and new brands that the company develops through its own research and development.
What is new product
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Categories of New ProductsNew-To-The-World
New Product Lines
Product Line Additions
Improvements/Revisions
Repositioned Products
Lower-Priced Products
SixCategories
ofNew
Products
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• 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
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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
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New Product Development Process
IdeaIdeaGenerationGeneration
ConceptConceptDevelopmentDevelopmentand Testingand Testing
MarketingMarketingStrategyStrategy
DevelopmentDevelopment
IdeaIdeaScreeningScreening
BusinessBusinessAnalysisAnalysis
ProductProductDevelopmentDevelopment
MarketMarketTestingTesting
CommercializationCommercializationPiyoosh Bajoria
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Original Products
ProductImprovements
ProductModifications
NewBrands
AcquiredCompanies
Acquired Patents
AcquiredLicenses
Strategies for Obtaining New Product Ideas
New product development strategies
Piyoosh Bajoria
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Step 1: Idea GenerationCustomers
Employees
Distributors
Competitors
R & D
Consultants
Creative Thinking
Sources ofSources ofNew-ProductNew-Product
IdeasIdeas
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Attribute Listing
The process of listing down major attributes of existing products & modifying each attribute for an improved
product
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Forced Relationships
In this process several objects are considered in relationships
with each other to create a new product.
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Morphological Analysis
This method calls for identifying structural
dimensions of a problem and examining the relationship
amongst them.
Piyoosh Bajoria
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Need /problem identification
This method calls for identifying needs, problems &
even asking for ideas.
Piyoosh Bajoria
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Brainstorming
The process of getting a group to think of unlimited ways to
vary a product or solve a problem.
Piyoosh Bajoria
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• 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
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1. Develop New Product Ideas into Alternative Detailed
Product Concepts
2. Concept Testing - Test theNew Product Concepts with Groups of Target Customers
3. Choose the One That Has theStrongest Appeal to Target
Customers
Step 3: Concept Development & Testing
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Part Two Describes Short-Term:Product’s Planned Price
DistributionMarketing Budget
Part Three Describes Long-Term:Sales & Profit Goals
Marketing Mix Strategy
Marketing Strategy Statement Formulation
Part One Describes Overall:Target Market
Planned Product PositioningSales & Profit Goals
Market Share
Step 4: Market Strategy Development
Piyoosh Bajoria
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Business Analysis
Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives
If Yes, Move to Product Development
If No, Eliminate Product Concept
Step 5: Business AnalysisStep 6: Product development
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Advertising
Packaging
ProductBudget Levels
Positioning Strategy
DistributionPricing
Branding
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
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When? Where?
Commercialization is the Introduction of the New Product into the Marketplace.
Step 8: Commercialization
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Step 8: Commercialization
Production
Inventory Buildup
Distribution Shipments
Sales Training
Trade Announcements
Customer Advertising
Steps in Steps in Marketing a Marketing a New Product New Product
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Diffusion
The process by which the adoption of an innovation spreads.
Piyoosh Bajoria
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Categories of adoptersin Diffusion process
• Innovators• Early adopters• Early majority• Late majority• Laggards
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Perc
enta
ge o
f Ado
pter
s
Time
Innovators2.5%
EarlyAdopters
13.5%
LateMajority
34%
EarlyMajority
34%Laggards
16%
Categories of Adopters
Piyoosh Bajoria
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Diffusion process and product life cycle curve
InnovatorsEarly adopters
Early majorityLate majority
Laggards
ProductProductlife cyclelife cyclecurvecurve
DiffusionDiffusioncurvecurve
Introduction Growth Maturity Decline
Sale
s
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Product characteristics and the rate of adoption
• Complexity• Compatibility• Relative advantage• Observability• Triability
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Marketing implications of the adoption process
Communication aids the diffusion process
• Word-of-mouth• Direct from marketer
Piyoosh Bajoria