PG1 Final

Unit I
Product Development Organisation

New product development in functional department
New product development responsibility on product manager
Structural Units
New Product Department New Product Committee Ad hoc Committee Task Force Venture Team
Product Portfolio
The set of different products that an organisation produces, ideally balanced so that some products are mature, some are still in their growth stage while others are waiting to be introduced.
Product Portfolio
Portfolio Management
Portfolio Management is used to select a portfolio of new product development projects to achieve the following goals:
Maximize the profitability or value of the portfolio Provide balance Support the strategy of the enterprise
Portfolio Management is the responsibility of the senior management team of an organization or business unit.
Portfolio Management
This team, which might be called the Product Committee, meets regularly to manage the product pipeline and make decisions about the product portfolio. Often, this is the same group that conducts the stage-gate reviews in the organization.
A logical starting point is to create a product strategy markets, customers, products, strategy approach, competitive emphasis, etc. The second step is to understand the budget or resources available to balance the portfolio against. Third, each project must be assessed for profitability (rewards), investment requirements (resources), risks, and other appropriate factors.
Balancing Product Portfolio

Aggressively support the newly introduced product to ensure dominance
Continue present strategies to existing products to ensure maintenance of market share Gain share of market for products by investing in acquisitions Narrow down the range of models of product and focus on one segment
Diffusion of Consumer Innovations

How an innovation spreads among potential buyers and users.
Category according to product adoption:

Innovators Early Adopters Early Majority Late Majority Laggards 2% next 13% next 34% above 34% last 16%
Characteristics
Relative Advantage Compatibility Complexity Divisibility Communicability
Types
Diffusion of Industrial Innovations
Process Product
Characteristics
Economic advantage Commitment Uncertainty Risk Reduction
Economic Analysis
Market Potential
Market Demand Estimating Sales
Estimating Replacement Sales Estimating Repeat Sales
Sales Forecasting Methodologies

Judgmental Estimates
Awareness trial repeat purchase
Unit II
Test Marketing
The stage of the new product development in which the product and marketing program are tested in realistic market settings. Lets the company test: Product Entire marketing program
Targeting, positioning, advertising, distribution, pricing, branding & packaging budget levels.
Types
Standard Test Markets Controlled Test Markets Simulated Test Markets
Standard Test Markets

Company finds small number of representative test cities Conducts a full marketing campaign in these cities Uses audits & survey results to see the product performance Most widely used method
Standard Test Markets Drawbacks

Costly Time Consuming Competitors can monitor test market results and interfere
Controlled Test Markets

Behavior scan Factors controlled are:
Shelf placement Price In- store promotions Direct mail promotions
Simulated Test Markets

Ads & promotions of variety of products are shown including new product Small amount of money is given to the sample consumers They are invited to the real or lab stores The researchers note how many buy new product & how many buy competing brands Feedback is taken after few days
New Product Launch
New Product Launch

The marketing plan for launch is a statement of the course of action to be followed for the products introduction into the market. It should clearly specify the marketing objectives, strategies and programs. Continuous process
The marketing objectives for the new product should contain:

Unit or rupee value sales of the product by next year Market share by the year Product profitability in terms of percentage margins and payback
Analysis
Market Analysis
Market Overview Segment Overview Consumer Overview Competition Overview
Internal Analysis
The sales Force Promotional setup Distribution System
The Target Market

Criteria used to select an appropriate market segment:
Segment attractiveness Ease of Access Degree of fit Competitive Situation Relative Advantage Profitability
Product Strategy
Finalization of the product benefits, features and attributes. Developing Growth strategy
Product Positioning
Deciding how the product will be perceived by potential customers. A product positioning statement should clearly show the end-use and the benefit sought to be delivered.
Pricing the New Product

Use the products target market and positioning strategy Skimming versus Penetration Pricing Promotional Pricing
Advertising for New Product

Decisions to be taken:
Advertising Objectives Advertising Budget Advertising Strategy
Media Selection
Media Image & Editorial Content Media Scheduling
Should take into account time response function to the introductory advertising as well as competitive reactions.
BRAND & BRANDING
BRAND
American Marketing Association
A name, term, sign, symbol or design or a combination of them intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of competitors.
Conveys Six levels of Meaning

Attributes Benefits Values Culture Personality User
TYPES OF BRANDS
Functional (attributes or benefits) Symbolic (emotional aspect)
BRANDING
Branding is a process that is used by the businesses to utilize marketing strategies To enhance their product or service image so that it is more readily recollected by the customer Branding helps the product or service to make a favorable impact on the target customer while the branding concepts help in outlining the guidelines that should be followed during the branding process.
TYPES
Personal Branding Corporate Branding Individual Branding Faith Branding Nation Branding Foreign Branding Audio/Sound Branding Rebranding
Assessing a Brand
Visibility
Benchmarking with other similar brands Brand
Media Presence
Parent Company Sales / Market Share Captured
Advertisement Likeability
Brand Equity
When a commodity becomes a brand, it is said to have equity. Goodwill: the convergence of finance & marketing
A source of value for the consumer

A source of value to the company
Brand Personality
Brand personality is the way a brand speaks and behaves. It means assigning human personality traits/characteristics to a brand so as to achieve differentiation. These characteristics signify brand behaviour through both individuals representing the brand as well as through advertising, packaging, etc.
ADVERTISING
Advertising is any paid form of non personal presentation and promotion of ideas, goods or service by an identified sponsor. Ads are cost effective way to disseminate messages. Handling Small Company
sales & marketing department

A separate department
Large Company
Objectives
Classification on the basis of:
Informative advertising Persuasive advertising Reminder advertising Reinforcement advertising
5 Ms of Advertising
MESSAGE
Message generation Message evaluation & selection Message execution Social responsibility review
MONEY MISSION
Sales Goals Advertising objectives
Factors: Stage in PLC Market share & consumer base Competition & Clutter Advertising frequency Product suitability
MEASUREMENT
Communication impact Sales impact
MEDIA
Reach, frequency, impact Major media types Specific media vehicles Media timing Geographical media allocation
Public Relations

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Unit I

Product Development Organisation

Balancing Product Portfolio

Diffusion of Consumer Innovations

Category according to product adoption:

Diffusion of Industrial Innovations

Sales Forecasting Methodologies

Awareness trial repeat purchase

Standard Test Markets

Standard Test Markets Drawbacks

Controlled Test Markets

Simulated Test Markets

New Product Launch

New Product Launch

The marketing objectives for the new product should contain:

The Target Market

Pricing the New Product

Advertising for New Product

BRAND & BRANDING

Conveys Six levels of Meaning

Benchmarking with other similar brands Brand

Parent Company Sales / Market Share Captured

A source of value for the consumer

sales & marketing department

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