MODULE [PRINCIPLES OF MARKETING]

Chapter: 2 THE PRODUCT

Steps in Product Development Process

1. Idea generation – the ideas may come from external sources or internal sources.
2. Screening of ideas – not all the ideas generated can be feasible. Feasible ideas
will be considered for further study.
3. Formal business or economic analysis – objectives of this step is further
qualification of demand, risk, investment, cost and profitability.
4. Product development – actual – developed product is now produced.
5. Test Marketing – these are commercial experiments conducted in limited
geographic areas to ascertain product feasibility.
Test marketing – test product for real conditions.
Product Test – test product function in artificial conditions.
*In average of six months period for testing the market.
6. Commercialization – full scale production and product introduction can be
realized if test marketing is successful. The new product is born and enters the
product life cycle. Product fate or destiny may not only be on the hands of the
marketing company but also of the external competitive environment.
Stages of Product Life Cycle
1. Introduction stage – this is the stage when the product is launched in the
market. The marketing organization should ensure in this stage that the buyers are
aware of the product, educated about it and to try it. The marketer is more concerned
with increasing primary demand than battling on competition.
2. Growth stage – also known as the “market acceptance” stage, this is when
sales and profits increase at an increasing rate. Product “tryers” are now repeat
buyers. During this stage, the company wants to sustain sales growth as long as
possible.
3. Maturity stage 0 during this stage, sales and profits start to decline. More
competitors enter the market which more advanced product development.
three phases:
a. Growth maturity – sales rate declines because of distribution
saturation, unwillingness of middle men to re-sell manufacturers product.
b. Stable maturity – sales become level or at break-even because of the
market saturation; unwillingness of market to buy loss of interest on the product.
c. Decaying Maturity – sales continue to decline; customers shift to
other brands or available substitute.
4. Decline and possible abandonment stages – new products of brands
eventually enters the industry. Obsolescence of the company’s products sets in. As
new concepts come in, they replace the old ones. graphical presentation of the
product’s life cycle.
 . Books of Accounts and Registries. The books of accounts and registries of the NG entities
consist of: