Q.1 Explain the various stages involved in new product development ? Product Development Steps 1-3 Step 1.

IDEA GENERATION The first step of new product development requires gathering ideas to be evaluated as potential product options. For many companies idea generation is an ongoing process with contributions from inside and outside the organization. Many market research techniques are used to encourage ideas including: running focus groups with consumers, channel members, and the company’s sales force; encouraging customer comments and suggestions via toll-free telephone numbers and website forms; and gaining insight on competitive product developments through secondary data sources. One important research technique used to generate ideas is brainstorming where open-minded, creative thinkers from inside and outside the company gather and share ideas. The dynamic nature of group members floating ideas, where one idea often sparks another idea, can yield a wide range of possible products that can be further pursued.

Step 2. SCREENING

In Step 2 the ideas generated in Step 1 are critically evaluated by company personnel to isolate the most attractive options. Depending on the number of ideas, screening may be done in rounds with the first round involving company executives judging the feasibility of ideas while successive rounds may utilize more advanced research techniques. As the ideas are whittled down to a few attractive options, rough estimates are made of an idea’s potential in terms of sales, production costs, profit potential, and competitors’ response if the product is introduced. Acceptable ideas move on to the next step.

Step 3. CONCEPT DEVELOPMENT AND TESTING

With a few ideas in hand the marketer now attempts to obtain initial feedback from customers, distributors and its own employees. Generally, focus groups are convened where the ideas are presented to a group, often in the form of concept board presentations (i.e., storyboards) and not in actual working form. For instance, customers may be shown a concept board displaying drawings of a product idea or even an advertisement featuring the product. In some cases

focus groups are exposed to a mock-up of the ideas, which is a physical but generally non-functional version of product idea. During focus groups with customers the marketer seeks information that may include: likes and dislike of the concept; level of interest in purchasing the product; frequency of purchase (used to help forecast demand); and price points to determine how much customers are willing to spend to acquire the product.

Step 4. BUSINESS ANALYSIS

At this point in the new product development process the marketer has reduced a potentially large number of ideas down to one or two options. Now in Step 4 the process becomes very dependent on market research as efforts are made to analyze the viability of the product ideas. (Note, in many cases the product has not been produced and still remains only an idea.) The key objective at this stage is to obtain useful forecasts of market size (e.g., overall demand), operational costs (e.g., production costs) and financial projections (e.g., sales and profits). Additionally, the organization must determine if the product will fit within the company’s overall mission and strategy. Much effort is directed at both internal research, such as discussions with production and purchasing personnel, and external marketing research, such as customer and distributor surveys, secondary research, and competitor analysis.

Step 5. PRODUCT AND MARKETING MIX DEVELOPMENT

Ideas passing through business analysis are given serious consideration for development. Companies direct their research and development teams to construct an initial design or prototype of the idea. Marketers also begin to construct a marketing plan for the product. Once the prototype is ready the marketer seeks customer input. However, unlike the concept testing stage where customers were only exposed to the idea, in this step the customer gets to experience the real product as well as other aspects of the marketing mix, such as advertising, pricing, and distribution options (e.g., retail store, direct from company, etc.). Favorable customer reaction helps solidify the marketer’s decision to introduce the product and also provides other valuable information such as estimated purchase rates and understanding how the product will be used by the customer. Reaction that is less favorable may suggest the need for adjustments to elements of the marketing mix. Once these are made the marketer may again have the customer test the product. In addition to gaining

customer feedback, this step is used to gauge the feasibility of large-scale, cost effective production for manufactured products. Step 6. MARKET TESTING

Products surviving to Step 6 are ready to be tested as real products. In some cases the marketer accepts what was learned from concept testing and skips over market testing to launch the idea as a fully marketed product. But other companies may seek more input from a larger group before moving to commercialization. The most common type of market testing makes the product available to a selective small segment of the target market (e.g., one city), which is exposed to the full marketing effort as they would be to any product they could purchase. In some cases, especially with consumer products sold at retail stores, the marketer must work hard to get the product into the test market by convincing distributors to agree to purchase and place the product on their store shelves. In more controlled test markets distributors may be paid a fee if they agree to place the product on their shelves to allow for testing. Another form of market testing found with consumer products is even more controlled with customers recruited to a “laboratory” store where they are given shopping instructions. Product interest can then be measured based on customer’s shopping response. Finally, there are several high-tech approaches to market testing including virtual reality and computer simulations. With virtual reality testing customers are exposed to a computerprojected environment, such as a store, and are asked to locate and select products. With computer simulations customers may not be directly involved at all. Instead certain variables are entered into a sophisticated computer program and estimates of a target market’s response are calculated.

Step 7. COMMERCIALIZATION

If market testing displays promising results the product is ready to be introduced to a wider market. Some firms introduce or roll-out the product in waves with parts of the market receiving the product on different schedules. This allows the company to ramp up production in a more controlled way and to fine tune the marketing mix as the product is distributed to new areas.

Q2. Discuss the importance of SWOT analysis to develop effective marketingmix. Ans.A tool used by organisations to help the firm establish its Strengths, Weaknesses,Opportunities and Threats (SWOT). A SWOT analysis is used as a framework

to helpthe firm develop its overall corporate, marketing, or product strategies.Note: Strengths and Weaknesses are internal factors which are controllable by theorganisation. Opportunities & threats are external factors which are uncontrollable bythe organisation.Strength examples could include:A strong brand name.Market share.Good reputation.Expertise and skill.Weaknesses could include:Low or no market share.No brand loyalty.Lack of experience.Opportunities could include:A growing market.Increased consumer spending.Selling internationally.Changes in society beneficial to your company.Threats could include:CompetitorsGovernment policy eg taxation, laws. Changes in society not beneficial to your company.A SWOT analysis is an excellent tool to use if the organisation wants to take a stepback and assess the situation they are in. Issues raised from the analysis are then usedto assist the organisation in developing their marketing mix strategy. A SWOT analysismust form the part of any prudent marketing strategy.

Despite the challenges inherent in systems development, however, MIS also offerbusinesses a number of advantages. "Today, leading companies and organizations areusing information technology as a competitive tool to develop new products andservices, forge new relationships with suppliers, edge out competitors, and radicallychange their internal operations and organizations, " Laudon and Laudon explained. Forexample, using MIS strategically can help a company to become a market innovator. Byproviding a unique product or service to meet the needs of customers, a company canraise the cost of market entry for potential competitors and thus gain a competitiveadvantage. Another strategic use of MIS involves forging electronic linkages tocustomers and suppliers. This can help companies to lock in business and increaseswitching costs. Finally, it is possible to use MIS to change the overall basis ofcompetition in an industry. For example, in an industry characterized by price wars, abusiness with a new means of processing customer data may be able to create uniqueproduct features that change the basis of competition to differentiation.The impetus to develop a new information system can grow out of end-user demands,the availability of new technology, or management strategy. A variety of tools exist foranalyzing a company's information needs and designing systems to support them. Thebasic process of systems development involves defining the project, creating a model ofthe current system, deriving a model for the new system, measuring the costs andbenefits of all alternatives, selecting the best option, designing the new system,completing the specific programming functions, installing and testing the new system,and completing a post-implementation audit.Information systems designers, whether internal to the company or part of an outsidefirm, are generally responsible for assuring the technical quality of the new system andthe ease of the user interface. They also oversee the process of system design andimplementation, assess the impact of the new system on the organization, and developways to protect the system from abuse after it is installed. But it is the responsibility ofsmall business owners and managers to plan what systems to implement and to ensurethat the underlying data are accurate and useful. "The organization must develop atechnique for ensuring that the most important systems are attended to first, thatunnecessary systems are not built, and that end users have a full and meaningful role indetermining which new systems will be built and how, " according to Laudon andLaudon. KNOWLEDGE MANAGEMENT Knowledge management (KM) is a relatively new form of MIS that expands the conceptto include information systems that provide decision-making tools and data to people atall levels of a company. The idea behind KM is to facilitate the sharing of informationwithin a company in order to eliminate redundant work and improve decision-making.KM becomes particularly important as a small business grows. When there are only afew employees, they can remain in constant contact with one another and shareknowledge directly. But as

the number of employees increases and they are divided into teams or functional units, it becomes more difficult to keep the lines of communicationopen and encourage the sharing of ideas.Knowledge management is a way of using technology to facilitate the process ofcollaboration across an organization. A small business might begin sharing informationbetween groups of employees by creating a bestpractices database or designing anelectronic company directory indicating who holds what knowledge. Larger companies,as David Coleman wrote in Computer Reseller News, can implement KM systemsthrough targeted pilot projects or through a broader strategy involving the firm'stechnical infrastructure. Many companies have installed intranets — or enterprise-widecomputer networks with databases all employees can access — as a form of KM. Anumber of software programs exist to facilitate KM efforts. Some of the leaders in thefield include Lotus Notes, Microsoft Exchange Server, and a variety of systems basedon XML. Q5. Describe five interdependent levels of basic human needs (motivators) aspropounded by Abraham Maslow Ans.Psychologist Abraham Maslow first introduced his concept of a hierarchy of needs in his1943 paper "A Theory of Human Motivation"1 and his subsequent book Motivation andPersonality.2 This hierarchy suggests that people are motivated to fulfill basic needsbefore moving on to other, more advanced needs.This hierarcy is most often displayed as a pyramid. The lowest levels of the pyramid aremade up of the most basic needs, while the more complex needs are located at the topof the pyramid. Needs at the bottom of the pyramid are basic physical requirementsincluding the need for food, water, sleep, and warmth. Once these lower-level needshave been met, people can move on to the next level of needs, which are for safety andsecurity.As people progress up the pyramid, needs become increasingly psychological andsocial. Soon, the need for love, friendship, and intimacy become important. Further upthe pyramid, the need for personal esteem and feelings of accomplishment take priority.Like Carl Rogers, Maslow emphasized the importance of self-actualization, which is aprocess of growing and developing as a person in order to achieve individual potential.Types of NeedsMaslow believed that these needs are similar to instincts and play a major role inmotivating behavior. Physiological, security, social, and esteem needs are deficiencyneeds (also known as D-needs), meaning that these needs arise due to deprivation.Satisfying these lower-level needs is important in order to avoid unpleasant feelings orconsequences. Maslow termed the highest-level of the pyramid as growth needs (also known as beingneeds or B-needs). Growth needs do not stem from a lack of something, but rather froma desire to grow as a person.Five Levels of the Hierarchy of NeedsThere are five different levels in Maslow’s hierarchy of needs:

1. Physiological NeedsThese include the most basic needs that are vital to survival, such as the need forwater, air, food, and sleep. Maslow believed that these needs are the most basic andinstinctive needs in the hierarchy because all needs become secondary until thesephysiological needs are met.2. Security NeedsThese include needs for safety and security. Security needs are important for survival,but they are not as demanding as the physiological needs. Examples of security needsinclude a desire for steady employment, health insurance, safe neighborhoods, andshelter from the environment.3. Social NeedsThese include needs for belonging, love, and affection. Maslow considered these needsto be less basic than physiological and security needs. Relationships such asfriendships, romantic attachments, and families help fulfill this need for companionshipand acceptance, as does involvement in social, community, or religious groups.4. Esteem NeedsAfter the first three needs have been satisfied, esteem needs becomes increasinglyimportant. These include the need for things that reflect on selfesteem, personal worth,social recognition, and accomplishment.5. Self-actualizing NeedsThis is the highest level of Maslow’s hierarchy of needs. Self -actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others, andinterested fulfilling their potential. Q.6 List the important differences between Consumer market and businessmarkets Ans.The consumer market is all about selling products and getting the best revenue fromthat. So therefore, offers will be placed on products to make them more attractive forpeople to buy so that company gets the sales. The consumer market is also verycompetitive and this means that if you wish to be successful within it, you need to keeptabs on what the competition is doing and better them. The consumer market is allabout making cheap produce and selling it on at a higher price to the general public tomake a profit. The business market, however, is more difficult to define. The differences between itand the consumer market are mainly that the business market is less directlycompetitive, but at the same time you need to make sure your product, or shares, areattractive to the buyer. So it is more about promoting what you have to make buyersaware of it and why it is so good.The factors that influence consumer buying behaviour will be things such as the price ofthe product, and whether it is actually worth the price that it is being marketed at, theplace at which it is being sold, because consumers often have favourite stores, and willlook for a reputable name to buy from, and necessity. If the product is something that isneeded rather than a one off or a novelty then you are more likely to sell it.The factors that influence business buying are more about the professionalism of thecompanies selling and their potential to keep providing good share prices are keyfactors. In the business market it is all about getting your name seen as reputable andknowing what is good to invest in at the time. In business you are more likely to need toimpress a company than in consumer buying because the only judge is the consumerthemselves.

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