Marketing management Essay Example for Free

Marketing management Essay Slide 9.1 it’s good and good for you Chapter 9a Developing new products and  managing the product life cycle Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.2 New product development and product life-cycle strategies Topic outline †¢ †¢ †¢ †¢ †¢ New product development strategy New product development process Managing new product development Product life-cycle strategies Additional product and service considerations Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.3 New product development strategy Two ways to obtain new products Acquisition refers to the buying of a whole  company, a patent or a license to produce  someone else’s product. New product development refers to the  development of original products, product  improvements, product modifications and  new brands through the firm’s own product  development efforts. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.4 New product development process  Major stages in new product development Figure 9.1 Major stages in new-product development Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.5 New product development process (Continued) Idea generation Idea generation is the systematic search for new product ideas. Sources of new product ideas †¢ Internal †¢ External Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.6 New product development process (Continued) Idea generation Internal sources refer to the company’s  own formal research and  development, management and staff, and intrapreneurial programs. External sources refer to sources outside  the company such as customers,  competitors, distributors, suppliers  and outside design firms. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.7 New product development process (Continued) Crowdsourcing Inviting broad communities of people—  customers, employees, independent  scientists and researchers and even the public at large—into the new product  innovation process. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.8 New product development process (Continued) Idea screening †¢ Identify good ideas and drop poor ideas. †¢ R-W-W screening framework: – Is it real? – Can we win? – Is it worth doing? Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.9 New product development process (Continued) Concept development and testing Product idea is an idea for a possible product  that the company can see itself offering to the market.  Product concept is a detailed version of the  idea stated in meaningful consumer terms.  Product image is the way consumers  perceive an actual or potential product. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.10 New product development process (Continued) Concept development and testing Concept testing refers to testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.11 New product development process (Continued) Marketing strategy development †¢ Marketing strategy development involves designing an initial marketing strategy for a new product based on the product concept. †¢ Marketing strategy statement includes: – Description of the target market – Value proposition – Sales and profit goals. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.12 New product development process (Continued) Marketing strategy development Business analysis involves a review of the sales, costs and profit projections to find out whether they satisfy the company’s objectives. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.13 New product development process (Continued) Marketing strategy development Product development †¢ †¢ †¢ Involves the creation and testing of one or more physical versions by the RD or engineering departments. Requires an increase in investment. Shows whether the product idea can be turned into a workable product. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.14 New product development process (Continued) Marketing strategy development Test marketing is the stage at which the product and marketing program are introduced into more realistic marketing settings. Provides the marketer with experience in testing the product and entire marketing program before full introduction. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.15 New product development process (Continued) Types of test markets Standard test markets Controlled test markets Simulated test markets Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.16 New product development process (Continued) Marketing strategy development †¢ Advantages of simulated test markets – Less expensive than other test methods – Faster – Restricts access by competitors. †¢ Disadvantages – Not considered as reliable and accurate due to the controlled setting. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.17 New product development process (Continued) Marketing strategy development When firms test market †¢ New product with large investment †¢ Uncertainty about product or marketing program When firms may not test market †¢ Simple line extension †¢ Copy of competitor product †¢ Low costs †¢ Management confidence Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.18 New product development process (Continued) Marketing strategy development Commercialisation is the introduction of the new product †¢ When to launch †¢ Where to launch †¢ Planned market rollout Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.19 Managing new product development Successful new product development should be: †¢ customer-centred †¢ team-based †¢ systematic. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.20 Managing new product development (Continued) New product development strategies Customer-centred new product development: new ways to solve customer problems and create more customer satisfying experiences. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.21 Managing new product development (Continued) New product development strategies Sequential new product development:  company departments work closely  together individually to complete each  stage of the process before passing it  along to the next department or stage. †¢ Increased control in risky or complex projects but may be slow. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.22 Managing new product development (Continued) New product development strategies Team-based new product development: Various company departments work  closely together, overlapping the steps  in the product development process to  save time and increase effectiveness. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.23 Managing new product development (Continued) New product development strategies Systematic new product development: innovative development approach that collects, reviews, evaluates and manages new product ideas. †¢ Creates an innovation-oriented culture. †¢ Yields a large number of new product ideas. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.24 Product life-cycle strategies Product life cycle Figure 9.2 Sales and profits over the product’s life from inception to decline Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.25 Product life-cycle strategies (Continued) †¢ Product development – Sales are zero and investment costs mount. †¢ Introduction – Slow sales growth and profits are nonexistent. †¢ Growth – Rapid market acceptance and increasing profits. †¢ Maturity – Slowdown in sales growth and profits level off or decline. †¢ Decline – Sales fall off and profits drop. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.26 Product life-cycle strategies (Continued) Figure 9.3 Styles, fashions and fads Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.27 Product life-cycle strategies (Continued) Fads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.28 Product life-cycle strategies (Continued) Introduction stage †¢ Slow sales growth †¢ Little or no profit †¢ High distribution and promotion expense. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.29 Product life-cycle strategies (Continued) Growth stage †¢ †¢ †¢ †¢ †¢ †¢ Sales increase New competitors enter the market Price stability or decline to increase volume Consumer education Profits increase Promotion and manufacturing costs gain economies of scale. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.30 Product life-cycle strategies (Continued) Maturity stage †¢ †¢ †¢ †¢ †¢ Slowdown in sales Many suppliers Substitute products Overcapacity leads to competition Increased promotion and RD to support sales and profits. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.31 Product life-cycle strategies (Continued) Maturity stage modifying strategies †¢ Market modifying †¢ Product modifying †¢ Marketing mix modifying Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.32 Product life-cycle strategies (Continued) Decline stage †¢ Maintain the product †¢ Harvest the product †¢ Drop the product Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.33 Additional product and service considerations Product decisions and social responsibility Public policy and regulations regarding developing and dropping products, patents, quality and safety. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013 Slide 9.34 Additional product and service considerations (Continued) International product and service marketing—challenges †¢ Determining what products and services to introduce in which countries †¢ Standardisation versus customisation †¢ Packaging and labelling †¢ Customs, values and laws. Kotler et al., Principles of Marketing, 6th edition  © Pearson Education Limited 2013