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Kotler on Marketing

No company can win if its products and offerings resemble every other product and offering. Companies must pursue relevant positioning and differentiation. As part of the strategic brand management process, each company and offering must represent a distinctive big idea in the mind of the target market.

NEW PRODUCT DEVELOPMENT : Identifying market opportunities NPD begins with assessing opportunities in the market. Several methods can be used to uncover significant product opportunities.

a. Perceptual Mapping : This method relies on

consumer perceptions of brands currently available in a product category.

Through an assessment of consumer choice criteria and the preference for brands currently marketed, a firm can identify the gaps in the markets, These gaps represent areas of opportunities for new brands,

b. Benefit analysis : One important influence on consumer behaviour and choice is the pursuit of

benefits provided by purchase and use of a brand, A benefit analysis tries to identify the key benefits
sought by consumers and the extent to which existing brands are providing those benefits.

In cases where current brands are failing to

provide the benefits sought or are only partially

satisfying consumer desires an opportunity

exists for a new brand.

Benefit analysis differs from perceptual mapping in the sense that a new product development from benefit analysis is are improvement over existing

brands, whereas one developed from perceptual

mapping tries to assume a unique and different competitive position to provide different benefit altogether.

c. Problem Solution : In some cases a firm may discover that no brand currently available addresses a particular problem experience by consumers until the development of the new products which solves the consumers problems.

Idea Generation
After the market opportunity is identified, a firm

then tries to generate ideas for new products that

are consistent with the opportunity identified. New Product ideas can come from customers, R&D, employees, competitors, channel members,

top management, consultants, ad agencies etc.

Ideas Screening : After ideas with potential are

identified, there are general criteria that are used to

judge new product possibilities. a. Does the New Product have a well-defined and obtainable market segment? Competitive activities should be carefully considered here.

b. Can the firm use existing production facilities to

make the product? The financial burden of new

capital investment may reduce the feasibility of

some new products.

c. Can existing distribution channels be used for the New Product?

d. Is the firms sales staff qualified and large

enough to handle a new product? Retaining or adding to the staff may need to be considered. e. Does the new product fit the company image?

Products that differ from the company image

may need to be marketed under a different brand

name to ensure a consistent public image.

DROP ERROR - Company dismisses an

otherwise good idea.


- Company permits a poor idea to move into development and commercialisation

Concept Development & Testing

A product idea is a possible product that the company might offer to the market. A product concept is an elaborated version of the idea expressed in meaningful consumer terms.

A product image is the particular picture that

consumers acquire of an actual or potential product.

Product concepts are tested with an appropriate group of target consumers, then getting those

consumers reactions.
Rapid Prototyping design products on computer then produce plastic models of each.

Virtual Reality they use computers and sensory

devices to simulate reality.

Consumer engineering importance

Driven effort to

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an high




preferences in the final design.

Marketing Strategy Development : The marketing strategy plan consists of three parts : The first part describes 1. The target market size, structure and behaviour, the planned product positioning, and the sales, market share, and profit goals in the first few years.

2. The second part of the marketing strategy outlines the products planned price, distribution strategy and marketing budget for the first year. 3. The third part of the marketing strategy plan describes the long run sales and profit goals and marketing mix strategy over time.

Business Analysis Evaluates the proposals business attractiveness by preparing sales, cost and profit projections to determine whether it satisfies the companys objectives. a) Estimating total sales One time purchased product Infrequently purchased product Frequently purchased product

b) Estimating Costs & Profits Break even analysis Risk analysis

Product Development The firm develops prototype in an effort to confirm its feasibility in physical terms. It is necessary at this stage to ensure that

production and marketing departments are

working in close harmony.

The marketing responsibility is to communicate immediately any reaction that would suggest

that the nature of the prototype should be

altered, or that whole project should be seriously called into question.

At the end of the product development stage,

the firm faces a critical decision whether to go ahead and market the new product or to cut its losses by abandoning a project which appears to have an unlikely chance of success.

The go decision involves the risk of the product failure, while on the other hand the

decision to abort requires the firm to write off

large expenditure and perhaps years of time spent in development.

Functional Tests are conducted under laboratory

and field conditions to make sure that the product

performs safely and effectively. a. Alpha testing b. Beta testing

Consumer Tests can take a variety of forms from bringing consumers into a laboratory to giving them samples to use in their homes, free trials, test drives etc. a. Sales wave research b. Simulated test marketing c. Controlled test marketing

Business Goods Testing - Alpha testing

- Beta testing
Test Marketing Just as the prototype must correspond exactly to the final product, so it is vital that the test market chosen for partial launch of the

final product is highly representative of the total


Test marketing objective are : To predict the efficacy of the proposed marketing strategy (refine if needed) To predict the effect of strategy in terms of

market penetration.

The usual procedure for test marketing is to select an easily identifiable sector of the

market which represents the total market in

miniature and then to launch a product in the same way as a total market launch would be expected to take place, thus testing the feasibility of the full marketing programme.

Commercialisation : If test marketing has fine tuned the appropriate marketing strategy, and the firm has sufficient confidence and knowledge, it should launch and commercialise the product on a full scale basis.

While development costs to the stage of a test market are high, the financial loss of launching a product full scale which is a subsequent failure are always considerably higher. When, Where, and Whom