IDEA GENERATION Internal source # Research and Development # employees External source # customers # competitors # suppliers # distributers
IDEA SCREENINGProcess to spot a good idea and drop poor ones # Selecting an idea which is feasible and workable to develop. # Online blogs may discuss customers dissatisfaction with a certain product, which may provide ideas to inventors or a new product or service..
CONCEPT DEVELOPMENT AND TESTING It provide full details of the new product’s idea. # Will it be practical and feasible? # What benefits the product will provide ? # How will consumers react to the product? # What will it cost to produce it ? # Testing the concept by asking a number of customers what they think of the idea
MARKET STRATEGY & DEVELOPMENT A proposed marketing strategy will be written laying out the marketing mix strategy of the product, the segmentation, targeting and positioning strategy sales and profits that are expected.
BUSINESS ANALYSIS The business analysis stage looks more deeply into the Cash flow the product could generate, what the cost will be, how much market shares the product may achieve and the expected life of the product.
PRODUCT DEVELOPMENT At this stage the prototype is produced. The prototype will clearly run through all the desired tests, and presented to a selection of people made up of the target market segment to see if changes need to be made.
TEST MARKETING Test marketing means testing the product within a specific area. The product will be launched within a particular region so the marketing mix strategy can be monitored and if needed modified before national launch.
COMMERCIALIZATIONThere are certain factors that need to be taken into account before a product is launched nationally. These include: timing of the launch, how the product will be launched, where the product will be launched, will there be a national roll out or will it be region by region?
CONT… Finallythe commercialisation stage involves careful planning to maximise product success, a poor launch will affect product sales and could even affect the reputation and image of the new product.
PRODUCT LIFE-CYCLE STRATEGIES # The Product Life Cycle (PLC) has Five Stages. # Product development # Introduction # Growth # Maturity # Decline
PRODUCT LIFE CYCLESales andProfits ($) Sales Profits Time Product Introduction Growth Maturity Decline Develop- mentLosses/Investments ($)
PRODUCT LIFE-CYCLE STRATEGIES PLC Stages Begins when the company Product development develops a new-product Introduction idea Growth Sales are zero Maturity Investment costs are high Decline Profits are negative
PRODUCT LIFE-CYCLE STRATEGIES PLC Stages Low sales Product development High cost per customer Introduction acquired Growth Negative profits Maturity Innovators are targeted Decline Little competition
MARKETING STRATEGIES:INTRODUCTION STAGE Product – Offer a basic product Price – Use cost-plus basis to set Distribution – Build selective distribution Advertising – Build awareness among early adopters and dealers/resellers Sales Promotion – Heavy expenditures to create trial
PRODUCT LIFE-CYCLE STRATEGIES PLC Stages Rapidly rising sales Average cost per customer Product development Rising profits Introduction Early adopters are Growth targeted Maturity Growing competition Decline
MARKETING STRATEGIES:GROWTH STAGE Product – Offer product extensions, service, warranty Price – Penetration pricing Distribution – Build intensive distribution Advertising – Build awareness and interest in the mass market Sales Promotion – Reduce expenditures to take advantage of consumer demand
PRODUCT LIFE-CYCLE STRATEGIES PLC Stages Product development Sales peak Introduction Low cost per customer Growth High profits Maturity Middle majority are Decline targeted Competition begins to decline
MARKETING STRATEGIES:MATURITY STAGE Product – Diversify brand and models Price – Set to match or beat competition Distribution – Build more intensive distribution Advertising – Stress brand differences and benefits Sales Promotion – Increase to encourage brand switching
PRODUCT LIFE-CYCLE STRATEGIES PLC Stages Declining sales Product development Low cost per customer Introduction Declining profits Growth Laggards are targeted Maturity Declining competition Decline
MARKETING STRATEGIES:DECLINE STAGE Product – Phase out weak items Price – Cut price Distribution – Use selective distribution: phase out unprofitable outlets Advertising – Reduce to level needed to retain hard-core loyalists Sales Promotion – Reduce to minimal level
OPERATIONS OF NEW PRODUCTDEVELOPMENT New Product Lines: They allow the business to enter a completely new market segment. Additions to existing Product Lines: These are new items to the business, but they fit within an existing product line that the business already produces. They may represent a fairly new product to the market. Repositioning: These are new applications for existing products. They involve the retargeting of an old product to a new market segment.
CONT… Improvements and Revisions to ExistingProducts: These “not so new” products arereplacements of existing product lines. These“new and improved” product lines areincremental innovations . Cost Reductions: designed to replace existing product lines while providing similar benefits and performance but at significantly lower costs to the business.