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CHAPTER 8 NEW
PRODUCTS
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+ What is a NEW PRODUCT
New product are:

Something new and useful to consumer


Something relevant to consumer
Something that adds up value to consumer
60% unknown in the market
Existing within 6 months period
New product undergoes marketing
Innovation process with the
Innovatation in the 4Ps, product price ,
placement and promotion
New to the market and
New to the company
Undergoes modification and augmentation
on an existing product
Ways for a Company to obtain New Product

By acquisition

Through buy out/acquiring the whole


company

Acquired the patent and licence to produced


someone else product

By New Product Development process

By innovating and improving the existing


product

Through product modification or alteration of


the existing features of the product.
Figure 1-27: Jollibee- obtain new product BY ACQUISITION

The case of Jollibee foods


Corporation:
What can you say about the
following new concept of product?

>> Innovationshould be something


relevant to consumers
>> somethingthat
adds up value
>> KronosUSB Flash
Drive Watch
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Dawn Lacobuchi describes the
product development stages by:
Idea generation- conceptualization

Screening and evaluation

Concept development testing- customers feedback

Market strategy

Business analysis- design development

prototype development

Market testing

Launch- commercialization/product launching


Comment on the
following new concept
of product from Idea
Generation and its
market potential:
Hotel H2O | Hotel in Luneta, Manila Philippines

Hotel H20 is the Philippines's first aquarium-themed


urban resort | Book a room at our hotel in Manila
now and get instant confirmation online.
+ The Aquaroom
The concept of Condotel and
rent to own unit
The case of LRT/MRT
Nlex/slex connector
COMMERCIALIZATION
In this stage, the company finally
introduced the product in the market
into a full scale of production.

This can be executed in a launching


event either grand or soft launch. Big
company normally do a grand launch
nationwide using TV or media to
achieved wide coverage of the launch.

Some company do soft launch by


selecting key cities or places for the
first entrance of the product in the
market.
Some Managers considered Cebu as a
trial market for soft launch if they want
to push thru in metro manila market.
They believe in the similarity of both
place.
Incidentally commercialization in
product development process which is
the introduction stage of the product in
the Product life cycle.
Iphone 6 have simultaneuous launch on media,
events, exhibit and outdoor advertising.
+Managing the PLC
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The Nature of Product Life cycle

it composed 4 stages:

1. introduction,

2. growth,

3. maturity,

4. decline stage.

THE PRODUCT LIFE CYCLE characterized by an

S- curved that simplify the product status in the market in terms of sales.
1. INTRODUCTION STAGE- to inform consumers
strategy
it refers to the first entry of the product in the market usually
characterized by slow growth of sale, the product is
considered new 60 % unknown it has a low awareness with
consumers.

Profit are not existing here due to heavy cost spent for product
development.

The product aim to generate trials from its target market


Price strategy is utilized to capture early customers for the
product. The managers decides to implement pricing
strategy.
PRICING STRATEGY: to capture

PRICE SKIMMING- the company may decide to launched


the product in the market carrying a high initial price.
Normally high end brand uses this strategy like the 7 star
hotel in Dubai built on top of the sea is a million dollars
rate per night.

PRICE PENETRATION- The company launched the


product with low initial price to increase trials of the new
product and easily captured the market.

Cebu Pacifics every one can Fly is a low cost great


value campaign for small budget travellers allowed
expanded segments to fly.
2. GROWTH STAGE To persuade high rate of repeat purchases

La carmela de Boracay
one of the newest resort hotel in the island is currently enjoying high growth in
customer occupancy from local and foreign guest.
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Growth stage

In this stage, the product shows a rapid growth in sales


results of successful trials of consumers in the first stage.
There was a great increased in repeat purchasers a sign of
satisfied consumers are manifested in the growth stage.

Strategy: the company utilized the Placement strategy by


expanding the product in terms of distribution. Making the
product visible to more outlets and extending territorial
areas feasible for the product aiming to saturates the
market.the product enjoys good market and sales are
continuously growing. Strike while the iron is hot for the
marketing managers to sustain the situation.
3. MATURITY STAGE To Remind and maintain the brand.

Ma Mun Luk in china town,


Philippines still there but not as popular as it was in the 70s. The restaurant is known
for its siopao and mami. Currently Mamun luk undergoes so many innovations and
enhancement but still their frontline product still the category killer line or come on of
the store. And thats the classic siopao and mami noodles combination. (google.com.ph)
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Maturity stage

When product starts to mature, sales start to level off.It reaches the
ceiling of sales. Normally, the company try to minimized expenses on
advertising and promotion since product sales starts to subside. This
is common to any aging product.customer starts to shift to other
brand.

Strategy: Reinforcement strategy- Innovation through product


modification and improvement to reactives the excitement of the
consumers.

Hotel enters into an ex- deal with airlines to solve their decreasing
check in customers by launching the airline and 3day stay to a 5 star
hotel upon arrival to all Balikbayan passengers. With this strategy,
both company are helping each other in generating sales in their
respective industry.
4. DECLINE STAGE To Re Cycle strategy

The beginning of the end of a product.When sales starts to drop continously.


The saddest part in a product life cycle when consumers starts to abandon the product.
Sales decreases heavily, the product experience low market share and low market
growth.

Manila Midtown was located adriatico street in


Malate, hotel based in the heart of Manila experience decline in the early 90s deploying
75% of their staff. It was a formerly a preferred hotel by foreigners . Now the location is
currently occupied by Robinsons Mall.

Can we still bring back the product to life?

STRATEGY: Maybe some company indulged to merging with another company or


diversification strategy.
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Quiz 1 chapter 11 Prodev.
and PLC
Answer the following:
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IDENTIFICATION:

1. The stage in the product life cycle when


competitors starts to appear to steal a slice of
the market share currently enjoy by the brand.

2. When the R and D team source and collects


product concepts potential to be a new product
in the market.
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3. In this stage, the product
development team provide a
prototype or sample of the
product concept to
scrutinized its features and
identify further revisions and
improved its weak points
comparing the actual from
the blue print.

4. The company finally


launched the product into a
full scale of production
normally done in a grand or
soft launching.
+ 5. This stages of product characterized
by an S- curved in the graph showing
the flow of the product as it goes to the
cycle.

6. In this stage the team try to profile the


details of the chosen product idea.

7. This is the beginning of the end of a


product where it experiences
continues sales drop in different
retailing channel.

8. It describes the features of the


product idea, the proposed marketing
mix and its financial projections.
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9. The collected product ideas are subject


for evaluation to identify the most
feasible concept and delete those ideas
that do not merits the company.
10.When company launched the product
carrying a low initial price to generates
trial purchased for the new product.
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SanMiguel Beer, Nescafe,
Jackpot Safeguard and Colgate are
question: brands which shows
successful brand equity and
5points proved a longevity in the
market.

Inproduct life cycle what


stage is the most appropriate
for these brands and
incidentally said to be the
longest stage in the
PRODUCT LIFE CYCLE?

You have one minute to win it


Goodluck!
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Question:

What is the major problem you identify in the case?

What will be the best decision to make for Dunhill


cigarette? Why?

What is the chance of an imported brand in the local


market like Philippines?
FOR LOREAL MEN
EXPERT

Outline of the
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Marketing Plan
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I. EXECUTIVE SUMMARY
The vitamins industry is a pharmaeutical
industry growing at xx% per annum. The main
benefit of the product is a healthy body
supplement and support to human metabolism.
The industry is segmented in many ways such as
demographic, psychographic, behavioristic and
even geographic. In segment X where we choose to
compete in, Brand XYZ is a market leader with an
estimated XX% market share with no strong
challenger.

As of 2017,. Continue
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II. BUSINESS
REVIEW/HISTORICAL
BACKGROUND
Answers the question: where are we (your
brand) now?

Evaluate the past performance of the brand for


the last 12 months

Spotting
future opportunities in the future for
your brand

Presents the ff:

Corporate
mission: what business are we in(
lOreal men expert brand category)

Historical sales for the last 3 years.


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Economic plan worksheet 1/KRA
KRAs 2018 2017 %CHANGE

SALES(UNITS)

MARKET SHARE

PROFIT
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III. AUTOPSY OF SUCCESS AND
FAILURES(ASF)/BRAND
DIAGNOSIS
KEY FACTORS FOR SUCCESS (KFS)

COMPANYS STRENGTHS AND WEAKNESSES:EXHIBIT 1.2


FACTORS % WEIGHT KEY FACTOR FOR
AFFECTING KRA SUCCESS?
ATTAINMENT
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IV. INDUSTRY OPPORTUNITY AND
THREAT ANALYSIS
EXHIBIT
1-3 .5 FORCES OF INDUSTRY
PROFITABILITY/MICHAEL PORTERS
FRAMEWORKS

THREAT OF NEW ENTRANTS


THREAT OF SUBSTITUTES
RIVALRY AMONG EXISTING COMPETITION
BARGAINING POWER OF CUSTOMERS
BARGAINING POWER OF SUPPLIER
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EXHIBIT 1-3: GROWTH
OPPORTUNITY MATRIX
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V. TARGET MARKET/WHO ARE
YOUR POTENTIAL CUSTOMERS?
MARKET SEGMENTATION

TARGET MARKET

TARGET MARKET STRATEGY:


MARKET DRIVING STRATEGY- TARGETING
NON CUSTOMERS
MARKET DRIVEN STRATEGY; TARGET
EXISTING OR SERVED MARKET
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EXHIBIT 1-3:PTM OF EMPERADOR
LIGHT (SAMPLE PTM PROFILE)
AGE: 18-24

SEX: MALE/FEMALE

INCOME:CIVIL STATUS: CD SOCIO ECONOMIC

EDUCATION: SINGLE

PROFESSION: COLLEGE

LOCATION: URBAN/RURAL

PSYCHOGRAPHICS: FOR THE NEW BREED OF


DRINKERS WHO ARE FOCUSED, KNOWLEDGEABLE
AND IN CONTROL OF THEIR LIFE

BENEFITS DESIRED: LOWER ALCOHOL CONTENT


VI.
+ MARKETING OBJECTIVE-
SETTING
BAD OBJECTIVE:
SALES: TO SELL BETTER THAN LAST YEAR

MARKET SHARE: TO BE THE MARKET LEADER

PROFIT; TO EARN DECENT PROFIT FOR STOCKHOLDERS

GOOD OBJECTIVES:
SALES: TO SELL 80 METRIC TONS OF PROCESSED MEAT A
DAY VS. LAST YEARS 61 METRIC TONS AN INCREASE OF 30%.
MARKET SHARE: TO MAINTAIN LEADERSHIP IN THE SOAP
INDUSTRY AND IMPROVED MARKET SHARE TO 55% UP
FROM 51% LAST YEAR.
PROFIT: TO ATTAIN 10 MILLION IN NET PROFIT AFTER
TAX(32%)EQUIVALENT TO 40% ROI THIS FISCAL YEAR.
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VII. MARKETING MIX PLAN FOR
LOREAL MEN EXPERT CAMPAIGN
TASKS PARTICULARS TIMETABLE
PRODUCT STRATEGY LOREAL MEN EXPERT JULY AUGUST 2017
PRODUCTS
DO AN INTERNAL
LAUNCH OF THE
NEW VARIANTS OF
LOREAL MEN
PRODUCTS
PACKAGING
DESIGN
AWARENESS INSTALL HANGING JUNE 2017
LED MINI
BILLBOARDS ON THE
FF AREAS IN MAKATI,
QUEZON CITY MALLS
AND MANILA
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VIII. A CLOSER LOOK AT THE
BRAND
BRAND IDENTITY
BRAND PERSONALITY
BRAND IMAGE
BRAND POSITIONING
BRAND VISUAL
IDENTITY- LOGO,
COLOR,LETTER FONT AND DESIGNS
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IX: BETTER THAN OTHERS
STRATEGY
PTC-PRIMARY TARGET COMPETITION

COMPETITION ANALYSIS

BRANDS THAT LOREAL NEEDS TO REACT


IMMEDIATELY

BRAND THAT
LOREAL NEEDS FOR FURTHER
OBSERVATION

BE BETTER

BE CLOSER

BE FASTER STRATEGY AGAINST COMPETITION


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X. PROFIT STRATEGY

ROIIS HIGHLY DEPENDENT ON THE FF:


TOTAL ASSETS
NET WORTH
NET SALES
NET PROFIT

NET PROFIT MARGIN

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