Ayesha Khalil

Mar

keti

ng

Creating valve for customer

MarketingNew Product

development life cycle

Marketingo More then advertising &

selling.o Creating value for customer.o Is study that how to gain

& retain customers.

What is product?Anything that can be offered to

a market for attention, acquisition, use, or consumption

that might satisfy a want or

need.

ServiceService Any activity or benefit that one party can

offer to another that is essentially intangible and

does not result in the ownership of anything

Difference B

etween

Product &

ServiceProduct

o tangible

o homogeneous

o Production and

distribution are separated

from consumption

o A thing

o Core value processed in

factory

o Customers do not

participate in the

production process

o Can be kept in stock

o Transfer of ownership

Service

o intangible

o heterogeneous

o Production, distribution

and consumption are

simultaneous processes

o An activity or process

o Core value produced in

the buyer-seller

interaction

o Customers participate in

production

o Cannot be kept in stock

o No transfer of ownership

Levels of ProductoCore productoActual productoAugmented product

Core productCore benefit or service

Actual productoQuality leveloFeaturesoDesignoPackageoBrand name

Augmented producto InstallationoAfter-sale serviceoWarrantyoDelivery and creditoAttached benefit

Product classificationsoConsumer productsoIndustrial productoOrganizations, persons, places, and ideas

Product

New Product Development Life

Cycle

New-Product Development StrategyAcquisition:-

refers to the buying of a whole company, a patent, or

a license to produce someone else’s product

New product development:-

refers to original products, product improvements,

product modifications, and new brands developed

from the firm’s own research and development

Idea

generation

Idea

screening

Business

analysis

Concept Development & Testing

Test Marketing

Commercialization

New

-Pro

duct

D

evel

opm

ent

Pro

cess

1. Idea generation2. Idea screening3. Concept development and

testing4. Marketing strategy

development5. Business analysis6. Product development7. Test marketing8. Commercialization

Brainstorm

ing

The process of getting a group

to think of unlimited ways to

vary a product or solve a

problem

.

.

..

.

.

.

Sources of new-product ideas

Internal sources:- refer to the company’s own formal research and

development, management and staff, and entrepreneurial

programs.External sources:-

refer to sources outside the company such as customers,

competitors, distributors, suppliers, and outside design

firm

Idea screening refers to reviewing new-product ideas in order to drop poor ones as soon as possible

2.Idea Screening

3.C

once

pt

Dev

elop

men

t an

d T

esti

ng

oProduct idea:- is an idea for a

possible product that the company can

see itself offering to the marketoProduct concept:- is a detailed

version of the idea stated in meaningful

consumer terms

oProduct image:- is the way

consumers perceive an actual or

potential productoConcept testing:- refers to new-

product concepts with groups of target

consumers

4.Marketing Strategy DevelopmentMarketing strategy

development refers to the

initial marketing strategy

for introducing the product

to the market

oDescription of the target marketoProduct positioning, sales,

market share, and profit goalsoPrice, distribution, and

budgetoLong-term sales, profit goals, and marketing mix

strategyMar

keti

ng

stra

tegy

sta

tem

ent

Business Analysis

Mar

keti

ng S

trat

egy

Dev

elop

men

t

Business analysis:- o involves a review of the sales,

costs, and profit projections to find

out whether they satisfy the

company’s objectivesProduct development:-o involves the creation and testing

of one or more physical versions

by the R&D or engineering

departmentsoRequires an increase in investment

is the stage at which the product and marketing program are introduced into more realistic marketing settingsTest marketing provides the marketer with experience in testing the product and entire marketing program before full introduction

6.Test marketing

When firms test market it see that:- o New product with large investmento Uncertainty about product or marketing programo When firms may not test marketo Simple line extensiono Copy of competitor producto Low costso Management confidence

Approaches to test marketingStandard test marketsControlled test marketsSimulated test markets

Customer monitoring

Creating valve for

customer

Customer

identification

Customer

retention

Customer

acquisition

Stan

dard

tes

t m

arke

ts

oStandard test markets are

small representative markets

where the firm conducts a full

marketing campaign and uses

store audits, consumer and

distributor surveys, and other

measures to gauge product

performance. Results are used

to forecast national sales and

profits, discover product problems, and fine-tune the

marketing program.

Cha

lleng

es o

f st

anda

rd t

est

mar

kets

Time

Cost

Competitors can monitor the test

Competitor interference

Competitors gain access to the new product before introduction

are panels of stores that have agreed to carry new products for a feeLess expensive than standard test marketsFaster than standard test marketsCompetitors gain access to the new product

Controlled test markets

Simulated test markets are events where the firm will create a shopping environment and note how many consumers buy the new product and competing products. Provides measure of trial and the effectiveness of promotion. Researchers can interview consumers.

Simulated test markets

Simulated T

est

Markets

Advantages

o Less expensive than

other test methods

o Faster

o Restricts access by

competitors

Disadvantage

so Disadvantages

o Not considered as

reliable and accurate

due to the controlled

setting

8.CommercializationCommercialization is the introduction

of the new productoWhen to launchoWhere to launchoPlanned market rollout

Commercialization

product-lin

e

decisio

n

product-line

decision

o Product mix

o Product-line analysis

o Product –line length

Product mix

The set of all products and

items that a particular seller

offers for sale.

A company’s product mix has a

certain width, length, depth, and

consistency.

Pro

duct

L

engt

h

oWidth:- how many different

product lines.oLength:- the total number of

items.oDepth:- how many variants

are offered of each product in

the line.oConsistency:- how closely

related the various product

lines are in end use, production

requirement, distribution

channels, or some other way.

Pro

duct

Dec

isio

ns

for

Mar

keti

ng

Stra

tegy

What is most important p of marketing mix?

Successful firms

Man

agin

g N

ew-P

rodu

ct

Dev

elop

men

tSuccessful new product

development should be:o Customer-centeredo Team-centeredo Systematic

Product life cycle (PLC)

Product life cycle (PLC) is the

course that a product’s sales and

profits take over its lifetimeoProduct development oIntroductionoGrowthoMaturityoDecline

Pro

duct

life

cyc

le (

PC

)

oProduct ClassoProduct FormoBrand

Product life cycle (PLC) describes

Successful new product development should be:-

o Customer-canteredo Team-canteredo Systematic

New

pro

duct

life

cy

cle

stra

tegi

es

o IntroductionoGrowthoMaturityoDecline

Product classes:- have the longest life cycles, with sales of many

product classes in the mature stage for a long time

Product forms:- have the standard PLC— shape, introduction, rapid

growth, maturity, and decline

Brands:- have changing PLCs due to competitive threats

Marketing mix modifying strategy is when a company changes one or more of the marketing mix elementsPricePromotionDistribution channels

Market modifying strategy

is when a company tries to increase consumption of the current productNew usersIncrease usage of existing usersNew market segments

Decline stage is

when sales decline or level off for an extended time, creating a weak producto Maintain the

producto Harvest the producto Drop the product

Product

Life-C

ycle

Strateg

ies

Product need:-o longest life cycle (e.g., “phone”)

Product form:- o standard PLC shape (e.g., landline telephone)

Brand:- o shorter PLC cycles due to competitive attacks

and wear out (e.g., T-Mobile, Nokia, Sprint)

Styles and Fashions :-o very short life cycles (different phone designs)

Fad:- o fashion with quick adoption, quick decline

(e.g., pet rocks) and backlash

o The trend towards shorter Product Life Cycles

Pro

duct

Lif

e-C

ycle

Len

gths

Intr

oduc

tion

St

age

of P

LC

Sales:- low

Costs:- high cost per customer

Profits:- negative

Marketing Objective:-create product awareness and trial

Product:- offer a basic “core” product

Price:- based primarily on cost

Distribution:- build selective distribution

Promotion:- heavy to entice product trial

Gro

wth

Sta

ge

of P

LC

Sales:- rapidly risingCosts:- average cost per customerProfits:- rising

Marketing Objective:-

maximize market shareProduct:- offer peripheral benefits, i.e. service, warranty, packages

Price:- penetration strategyDistribution:- start building intensive distribution

Promotion:- reduce since demand is naturally growing

Mat

urit

y St

age

of P

LC

Sales:- reach their peakCosts: lowest cost per customerProfits: highest everMarketing Objective:-

“defend” high profits and market share

Product:- diversify brand and models

Price:- match or beat competitorsDistribution:-

continue building intensive distribution

Promotion:- increase to encourage brand switching

Dec

line

Stag

e of

PL

C

Sales:- decliningCosts:- lower (but not lowest) cost per customer

Profits:- decliningMarketing Objective:- reduce

expenditures and “milk” the brand for residual sales

Product:- phase out weak itemsPrice:- cut price or raise priceDistribution:- selective - phase out unprofitable outlets

Promotion:- reduce to “survival” level

Question???.

Tha

nk Y

ou

.