Developing New Product and Managing The Product Life Cycle

Sri Sri University

MARKETING MANAGEMENT ASSIGNMENT; MBA 2018-20

Book Chapter Summary

Principles of Marketing (17th Global Edition)
Philip Kotler, Gary Armstrong & Marc Oliver Opresnik

Group - 8
MEMBER NAME PORTION REVIEWED
KALVACHARLA VARUN KUMAR OBJECTIVE 9-1 & 9-2 Concept
Development & Testing, Marketing
Strategy Development
GRIDDALURU KRISHNAKANTH OBJECTIVE 9-2 Idea Generation,
Idea Screening, Business Analysis,
Product Development
RUSHIKESH SURYAKANT AYYA OBJECTIVE 9-2 Test Marketing,
Commercialization
KUNAL JOSHI OBJECTIVE 9-3 Product
Development, Introduction, Growth
DEV VASHISTH OBJECTIVE 9-3 Maturity, Decline
TUMMALA SANKEETH REDDY OBJECTIVE 9-4
 Developing New Product and Managing The Product Life Cycle

9-1 New Product Development Strategy: A company’s current products face limited life span & new products
are lifeblood of an organisation with high risk & expenses. Any new product should be customer focused
innovation, bring genuine change & enrich customer’s lives & pass customer “wow test”. Focusing on continuous
research & Development, purchase behaviour & life style trends, with the help of technology, internal and external
sources, strong planning, consumer problems and possible solutions the new product developed should be digitally
connected to the global environment & be In sync with life also meet customer needs. Facing two major challenges
developing new products to replace aging ones & adapting marketing strategies to face competition in digital and
fast changing world and understanding consumers, markets, competitors a firm can obtain new products in two
ways, one is through acquisition by buying a whole company, a patent or a licence to produce someone else’s
product and the other is through its own new product development, improvement & modification efforts that
deliver super value to customers. A company can also use crowdsourcing or open-innovation new product idea
programs which invite broad communities which includes customers, employees, independent scientists &
researchers, general public into the new product innovation process.

9-2 New Product Development Process: 1. This process starts with idea generation. 2. In idea screening, best
new product ideas chosen after crowd sourcing to spot good ones & drop poor ones ASAP which should be real
win worth doing. 3. In Concept Development and Testing, we develop this new product into alternative product
concepts, find out how attractive each concept is to customers and choose the best one, test with a group of target
consumers to determine whether the concepts have strong consumer appeal. 4. In Marketing Strategy &
Development there are three stages where first part describes the target market, planned value proposition, sales,
market share & profit goals for 1st few years. The 2nd part outlines product’s planned price, distribution &
marketing budget for the first year. The 3rd part describes the planned long run sales, profit goals & marketing
mix strategy. 5. Business Analysis involves a review of the sales, costs and profit projections for a new product
to find out whether they satisfy the company’s objective. If they do, product can move to development stage. The
company then uses the sales & cost figures to analyse the new product financial attractiveness. 6. In Product
development if the concept passes the business test which may involve actual customers, it moves into product
development. Developing the product concept into a physical product to ensure that the product idea can be turned
into a workable market offering & have required functional features and also convey the intended psychological
characteristics. 7. Test Marketing happens when the product passes both the concept test & product test. When
introducing new product requires big investment, when the risks are high or management is not sure of the new
product or its marketing program for example to take advantage of digital and mobile trends, star bucks quickly
introduced a loss than perfect mobile payment app, than worked out the flaws during the six months after launch.
8. In Commercialization post marketing gives management information to make final decision about new product
introducing to in market 1.0 commercialization. For example, apple launched its iphone-6 & iphone-6 plus in its
fastest over global market making them available in 115 countries within less than 3 months before i-6
commercialization.

9-3 Product Life Cycle Strategies: 1. Product Development begins when company finds & develops a new
idea. During this process sales are zero and company investment costs at mount for example innovation and new
product development have always been at the heart of Nestle since from beginning. 2. In Introduction Stage
sales growth as the product is introduced in the market. During this stage profit are non-existent due to heavy
 Developing New Product and Managing The Product Life Cycle

expenses of product information. A product like pioneer can develop the product in this stage but if it plays its
cards correctly

From the start. 3. In Growth stage, profit increases rapidly, it improves the product quality and add new product
features & model thus spending a lot of money on product improvement, promotion, distribution also can capture
a good position. 4. In Maturity stage, at some point product maturity will be down, many product are in sales by
product due to slowdown in sales growth. 5. In Decline stage sales may plunge to zero & may continue at low
level for many years, firms withdraw from the market as sales & profits decline.

9-4 Socially Responsible Product Decisions and International Products and Services Marketing:

Product Decision & Social Responsibility: As product decisions are made by marketers, they should consider
public policy issues & regulations regarding acquiring cross dropping product, patent protection, etc. The costs
may present from adding new products and while dropping they must be aware of obligation to their suppliers,
dealers. Manufacturer should follow certain laws like 1. The federal food, drug and cosmetic act protects from
unsafe and adulterated food. 2. The consumer product act of 1972. Product liabilities is the second largest litigation
function. If manufactures are found to be fraud, they has to pay huge amount of loss or class action suits which
will be in billions. Product stewards are those who protect the consumer from harm and company from liabilities.

International Product and Service Marketing: In this they have to find demographic and products. They has
to standardize there offering to develop their image lowers manufacturing cost & manufacturing. They should
also figure out the market & consumers. Service marketer is operated globally. Commercial banking is one of
them. American retailer like Walmart serves in 28 countries. German Deutshe bank serve more than in 70
countries with 28 million customers. There are many banks and retailers like this.This growth or global will
continue like this especially in banking, airline, telecommunication, even service firms are in international
expansion.