new product dev444
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Ashish Pillai IBS Chandigarh
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Ashish Pillai IBS Chandigarh
New to theWorld
New Product
LinesAdditions
Improvement
s Re-positionings
Cost
Reductions
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Simple: Listen to your customers,intermediaries and other externalassociates carefully
To create successful new products,the company must:
Understand its customers, markets andcompetitors
Develop products that deliver superior
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Overestimation of Market Size
Product Design Problems
Product Incorrectly Positioned, Pricedor Advertised
Costs of Product Development
Competitive Actions
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Shortage of ideasFragmented markets
Social and governmental constraints
Cost of development
Capital shortages
Faster required development time
Shorter product life cycles
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The key to idea generation isinteracting with customers andconsumers regularly
Attribute listing
Forced relationshipsMorphological analysis
Reverse assumption analysis
New contexts
Mind mapping
Surveys
Brainstorming
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Product idea Product concept Categoryconcept Brand conceptConcept testing
Communicability and believability
Need levelGap level
Perceived value
Purchase intention
User targets, purchase occasions, purchasingfrequency
Conjoint analysis: A statistical technique inwhich respondents' utilities or valuations of
attributes are inferred from the preferences theyex ress for various combinations of these
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Target markets size, structure, andbehavior
Planned price, distribution, andpromotion for the first year
Long-run sales and profit goals andmarketing-mix strategy over time
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The idea may be great and the conceptmay be well appreciated, but at the endthe idea should be a sound businessproposal
Costs & profits
Breakeven analysis and risk analysis
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Prototype:The first physical form or servicedescription of a new product, still in rough ortentative mode
With complex products, there may becomponent prototypes as well as onefinished prototype.
On services, the prototype is. simply the firstfull description of how the service will work,and comes from the systems design ordevelopment function.
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The new product and its marketing planare tested together in the market.
A market test simulates the eventual
marketing of the productSales-Wave Research
Simulated Test Marketing
Controlled Test Marketing
Test Markets
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When: TimingFirst Entry
Parallel Entry
Late Entry
Where: The geographic strategy ofproduct launch
To Whom: How are planning to take theproduct and message right to the targetsegment?
How: How are you planning to
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AwarenessInterest
Evaluation
Trial
Adoption
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Consumer Characteristics:Thereadiness of the target consumers to try newproducts
New Product Characteristics: How
innovative is the product?Relative advantage
Compatibility
Complexity
Divisibility
Communicability
Organizational Characteristics: If the
new product is a B2B product the
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S C
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Product line is narrow
Keep prices high (skim) or launchcheap (penetration)
Distribution is selective
Target early adopters - experts
Promotional budget very high
Examples: Home networking, hybrid
cars, HDTV, Blu Ray
Ashish Pillai IBS Chandigarh
Inform, Induce,Distribute
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Add more channels - broaderdistribution
Still getting new customers
Watch for me too new entrantsAdvertise in mass media
Compete on features
Examples: Digital cameras (5 year ago),MP3 players
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New: Features, Channels,
Flankers, Segments
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Declining sales and declining profits
Late adopters and laggards remain as
customers
Competition is strong and products
have evolved
Cut costs, milk the brand, prepare for
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Increase / Maintain /Decrease
Harvest Divest Ashish Pillai IBS Chandigarh
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Is there a difference between aProduct and a Brand?
Do consumers behave differentlytowards brands and products?
Do you think that brands will needdifferent strategies than products?
So. Do you think the life cycle and the
consequent changes required will be
Ashish Pillai IBS Chandigarh
We have already covered the Product LifeCycle. So why do we need to study
Brand Life Cycle all over again?
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According to the American MarketingAssociation: A brand is a name, term,design, symbol, or any other featurethat identifies one seller's good or
service as distinct from those of othersellers
The legal term for brand is trademark.
A brand may identify one item, a familyof items, or all items of that seller
If used for the firm as a whole, the
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BrandA name, term, sign,symbol, design, or acombination of them,intended to identify thegoods or services ofone seller or a group ofsellers and todifferentiate them from
those of competitorsIntangible
E.g. 1: Pepsi / Coke
E.g. 2: Band Aid
ProductAnything that can beoffered to a market forattention, acquisition,use, or consumption andthat might satisfy awant or need
Tangible
E.g. 1: Soda Pop
E.g. 2: Adhesive
bandage
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Think of how you became aware ofthem, why you bought them, why youprefer them, how you feel aboutthem ...
List them as they come to your mind
Chose one brand you are veryfamiliar with :
What does this Brand do for you?
What does it MEAN to you?
How do you relate to it ?
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According to you, who makes thebest cars in the world????? Ans:.
Do you own one?
Have you ever owned one?
Have you ever driven one?
Do you know anybody who owns one?
How do you know .. It is the best?
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Attributes Benefits Values
Culture
User
Personality
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A persona that overlays andincludes the physicalproducts/services
The sum of fundamental valuesand attributes ascribed to it bypeople
The entity that the consumersconstruct from the products
meanings, symbols and images
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A brand is essentially a
container for a costumers
complete experience with
the offer and the company(Sergio Zyman)
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Source : K. L. Keller
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Apparel : 61%
Tobacco : 46%
Food Products : 37%
Transportation Equip : 20%
Primary Metals : 1%
Stone, Clay : 0%
g
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The classical marketing literaturerecognises the following four stagesof brand life cycle:
2.Unbranded Goods
3.Brands as Reference
4.Brands as Personality
5.Brand as Icon
6.Brand as Company
7.Brand as Policy
g
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Unbranded Goods: Commodities &packaged goods; major proportion of goodsin non-industrialized context; minor role inEurope/USA; supplier has power over
consumerBrands as Reference: Brand name oftenname of maker; name used for identification;any advertising support focuses on rational
attributes; name over time becomesguarantee of quality/consistency E.g: Kissan,USHA, Godrej
Brand as Personality: Brand name may be"stand alone"; marketin su ort focuses on
g
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