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Fundamental Of Marketing           MKT243                    Chapter 6        Developing and Managing Product1          MK...
Slide Outline   Categories of New Product   New Product Development Process   Product Life Cycles (PLC)2               ...
New to world products(discontinuous innovations)   These products create entirely new market.    3                 MKT243...
New product lines   A product that a firm has not previously offered, allow it    to enter an established market.        ...
Additions to existing product lines   It includes new products that supplement a firm’s    established line.             ...
Improvements/ Revisions of existing    products   A product that has significant or slightly changed.                    ...
Repositioned products   These are existing products targeted at new markets or    market segments.                       ...
Lower priced products   Products that provide performance similar to competing    brands at a lower price.               ...
New-Product Development               Strategy      Two ways to obtain new productsAcquisition refers to the buying of a w...
Reasons for new product failure10            MKT243   Fundamental Of Marketing   DHD2013
New-Product Development Process       Major Stages in New-Product Development  11              MKT243   Fundamental Of Mar...
New-Product Development Process                Idea Generation Idea generation is the systematic     search for new-produc...
New-Product Development Process                     Idea Screening    Process to spot good ideas and drop poor ones.    ...
New-Product Development Process       Concept Development and Testing   Concept testing refers to testing new-product conc...
New-Product Development Process          Marketing Strategy Development    Marketing strategy development refers to the i...
New-Product Development Process       Marketing Strategy Development                               Product development inv...
New-Product Development Process                  Product Development   Develop concept into physical    product   Protot...
New-Product Development Process       Marketing Strategy Development                                              Test mar...
New-Product Development Process              CommercializationCommercialization is the introductionof the new product Whe...
Product Life Cycle        Product               A biological metaphor that         Product       Life Cycle        Life Cy...
Product Life-Cycle Strategies           Product Life Cycle   21            MKT243   Fundamental Of Marketing   DHD2013
Product Life-Cycle Strategies   Product development         Sales are zero and investment costs mount   Introduction   ...
PLC stagesIntroductory stage                            Growth stage    High failure rates                          Incr...
PLC stages cont…Maturity stage                      Decline stage   Sales increase at a                Long-run drop in ...
Product Life-Cycle Strategies           Maturity Stage Modifying Strategies   Market modifying   Product modifying   Ma...
Product Life Cycle Strategies                       INTRODUCTION            GROWTH              MATURITY             DECLI...
Product Life-Cycle Strategies27           MKT243   Fundamental Of Marketing   DHD2013
Product Life-Cycle Strategies   Style A basic and distinctive    model of expression   Example: Clothing (formal, casual...
Product Life-Cycle Strategies   Fashion is a currently accepted    or popular style in given field   Fashion tend to gro...
Product Life-Cycle Strategies  Fads are temporary periods of    unusually high sales driven by     consumer enthusiasm and...
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Chapter 6

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Chapter 6

  1. 1. Fundamental Of Marketing MKT243 Chapter 6 Developing and Managing Product1 MKT243 Fundamental Of Marketing DHD2013
  2. 2. Slide Outline Categories of New Product New Product Development Process Product Life Cycles (PLC)2 MKT243 Fundamental Of Marketing DHD2013
  3. 3. New to world products(discontinuous innovations) These products create entirely new market. 3 MKT243 Fundamental Of Marketing DHD2013
  4. 4. New product lines A product that a firm has not previously offered, allow it to enter an established market. 4 4 MKT243 Fundamental Of Marketing DHD2013
  5. 5. Additions to existing product lines It includes new products that supplement a firm’s established line. 5 5 MKT243 Fundamental Of Marketing DHD2013
  6. 6. Improvements/ Revisions of existing products A product that has significant or slightly changed. 66 MKT243 Fundamental Of Marketing DHD2013
  7. 7. Repositioned products These are existing products targeted at new markets or market segments. 7 7 MKT243 Fundamental Of Marketing DHD2013
  8. 8. Lower priced products Products that provide performance similar to competing brands at a lower price. 8 8 MKT243 Fundamental Of Marketing DHD2013
  9. 9. New-Product Development Strategy Two ways to obtain new productsAcquisition refers to the buying of a whole company, a patent, or a license to produce someone else’s productNew product development refers to original products, product improvements, product modifications, and new brands developed from the firm’s own research and development9 MKT243 Fundamental Of Marketing DHD2013
  10. 10. Reasons for new product failure10 MKT243 Fundamental Of Marketing DHD2013
  11. 11. New-Product Development Process Major Stages in New-Product Development 11 MKT243 Fundamental Of Marketing DHD2013
  12. 12. New-Product Development Process Idea Generation Idea generation is the systematic search for new-product ideas 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 12 MKT243 Fundamental Of Marketing DHD2013
  13. 13. New-Product Development Process Idea Screening  Process to spot good ideas and drop poor ones.  Need to avoid ‘GO error’ and also ‘DROP error’ 13 MKT243 Fundamental Of Marketing DHD2013
  14. 14. New-Product Development Process Concept Development and Testing Concept testing refers to testing new-product concepts with groups of target consumers 14 MKT243 Fundamental Of Marketing DHD2013
  15. 15. New-Product Development Process Marketing Strategy Development  Marketing strategy development refers to the initial marketing strategy for introducing the product to the market  Marketing strategy statement includes:  Description of the target market  Value proposition  Sales and profit goals 15 MKT243 Fundamental Of Marketing DHD2013
  16. 16. New-Product Development Process Marketing Strategy Development Product development involves the creation and testing of one or more physical versions by the R&D or engineering departments  Requires an increase in investment 16 MKT243 Fundamental Of Marketing DHD2013
  17. 17. New-Product Development Process Product Development Develop concept into physical product Prototypes are made Prototype must have correct physical features and convey psychological characteristics Test the include in Product Development stage:-  Alpha test  Beta test  Test market 17 MKT243 Fundamental Of Marketing DHD2013
  18. 18. New-Product Development Process 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 18 MKT243 Fundamental Of Marketing DHD2013
  19. 19. New-Product Development Process CommercializationCommercialization is the introductionof the new product When to launch Where to launch Planned market rollout 19 MKT243 Fundamental Of Marketing DHD2013
  20. 20. Product Life Cycle Product A biological metaphor that Product Life Cycle Life Cycle traces the stages of a product’s acceptance, from its introduction (birth) to its decline (death).20 MKT243 Fundamental Of Marketing DHD2013
  21. 21. Product Life-Cycle Strategies Product Life Cycle 21 MKT243 Fundamental Of Marketing DHD2013
  22. 22. Product Life-Cycle Strategies 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 22 MKT243 Fundamental Of Marketing DHD2013
  23. 23. PLC stagesIntroductory stage Growth stage High failure rates  Increasing rate of sales Little competition Frequent product modification  Entrance of competitors Limited distribution  Market consolidation High marketing and production costs  Initial healthy profits Negative profits with slow sales increases  Aggressive advertising of Promotion focuses on awareness and the information differences between Communication challenge is to stimulate primary demand brands  Wider distribution 23 MKT243 Fundamental Of Marketing DHD2013
  24. 24. PLC stages cont…Maturity stage Decline stage Sales increase at a  Long-run drop in sales decreasing rate  Large inventories of Saturated markets unsold items Lengthened product lines  Elimination of all Heavy promotions to nonessential consumers and dealers marketing expenses Niche marketers emerge  Maintain product vs. harvesting product 24 MKT243 Fundamental Of Marketing DHD2013
  25. 25. Product Life-Cycle Strategies Maturity Stage Modifying Strategies Market modifying Product modifying Marketing mix modifying 25 MKT243 Fundamental Of Marketing DHD2013
  26. 26. Product Life Cycle Strategies INTRODUCTION GROWTH MATURITY DECLINE Product Limited models; More models; Large number Eliminate Strategy Frequent Frequent of models unprofitable changes changes models Distribution Limited Expanded Extensive; Phase outSales Wholesale/ dealers; Long- Margins drop; unprofitable Strategy retail distributors term relations Shelf space outlets Awareness; Aggressive ads. Advertise; Phase out Promotion Stimulate demand; Stimulate Promote promotion Strategy Sampling demand heavily High to recoup Fall as result of Prices fall Prices Pricing development competition & (usually) stabilize at costs efficient low level Strategy production Time 26 MKT243 Fundamental Of Marketing DHD2013
  27. 27. Product Life-Cycle Strategies27 MKT243 Fundamental Of Marketing DHD2013
  28. 28. Product Life-Cycle Strategies Style A basic and distinctive model of expression Example: Clothing (formal, casual and homes (colonial, ranch, transitional) Once style invented, it may last for generations, passing in and out of vogue28 MKT243 Fundamental Of Marketing DHD2013
  29. 29. Product Life-Cycle Strategies Fashion is a currently accepted or popular style in given field Fashion tend to grow slowly, remain popular for a while, and then decline slowly. 29 MKT243 Fundamental Of Marketing DHD2013
  30. 30. Product Life-Cycle Strategies Fads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity 30 MKT243 Fundamental Of Marketing DHD2013

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