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MARKETING RESEARCH AND MARKETING�MANAGEMENT�(20CB406)
Department: CSBS�Batch/Year: II YEAR / IV SEM�Created by:Dr.S.D. Uma Mageswari�Date: 07.03.2022�
Table of Contents
Activity based learning
Activity | Topic | Outcome |
CASE ANALYSIS | MARKETING AND SELLING DIFFERENCE | Students will understand the difference between marketing and selling |
MARKETING ROLE PLAY | DIFFERENT MARKETING TECHNIQUES | Students will be able to create and devise new marketing techniques |
COURSE OUTCOMES
Upon completion of the course, the students will be able to:
UNIT I INTRODUCTION 9
UNIT II MARKET SEGMENTATION AND PRODUCTION MANAGEMENT 9
UNIT III PRICING, PROMOTION AND DISTRIBUTION STRATEGY 9
UNIT IV MARKETING RESEARCH 9
UNIT V INTERNET MARKETING 9
20CB406 | MARKETING RESEARCH AND MARKETING MANAGEMENT | L | T | P | C |
| Curriculum And Syllabus | 3 | 0 | 0 | 3 |
UNIT II MARKET SEGMENTATION AND PRODUCTION MANAGEMENT 9
The segmentation, targeting, positioning (STP) marketing model
the STP marketing model (Segmentation, Targeting, Positioning) is a familiar strategic approach in modern marketing. It is one of the most commonly applied marketing models in practice, with marketing leaders crediting it for efficient, streamlined communications practice.
STP marketing focuses on commercial effectiveness, selecting the most valuable segments for a business and then developing a marketing mix and product positioning strategy for each segment.
Moreover, segmentation, targeting, and positioning is an audience-focused rather than product-focused approach to marketing communications which helps deliver more relevant messages to commercially appealing audiences.
Market Segmentation?
Market segmentation is the process of creating customer groups based on common behavioral and consumption patterns. In fact, demographic, psychographic,
behavioral, and geographic similarities cluster customers. Specifically, these four segments break into subcategories to optimize marketing strategy.
Relationship between Market Segmentation, Target Marketing and Positioning
Market segmentation, target marketing and positioning is a chain of events that
result in a well-rounded marketing strategy. All three rely on each other to perform a perfect marketing masterstroke. Marketing segmentation categorizes a customer base according to their interests. This helps marketers target potential customers with relevant products. This, in turn, optimizes their marketing strategy.
Once marketers have the relevant data on customers and their requirements, they can position a product in a way that ticks all the boxes for the user. This way, marketers can position a product or a service effectively and improve conversion rates on their leads.
Benefits of Market Segmentation
The importance of market segmentation is that it makes it easier to focus marketing efforts and resources on reaching the most valuable audiences and achieving business goals.
Market segmentation allows you to get to know your customers, identify what is needed in your market segment, and determine how you can best meet those needs with your product or service. This helps you design and execute better marketing strategies from top to bottom.
1. Create stronger marketing messages
Knowing customers facilitate the development of stronger marketing messages. Generic and vague language can be avoided. Instead, direct messaging that speaks to the needs, wants, and unique characteristics of the target audience can be used.
With dozens of marketing tactics available, it can be difficult to know what will attract the ideal audience. It helps in devising the best suitable marketing strategies that will work best.
On digital ad services, audiences by their age, location, purchasing habits, interests etc may be targeted. Market segmentation will define the audience, and help in creating more effective, targeted digital ad campaigns.
When the marketing messages are clear, direct, and targeted they attract the
right people. Ideal prospects may be defined and are more likely to convert potential customers into buyers.
Being more specific about the value propositions and messaging also allows the business to stand out from competitors. Instead of blending in with other brands, brands can be differentiated by focusing on specific customer needs and characteristics.
When the customers’ want and need are known, offerings that uniquely serve the audience can be delivered and communicated. This distinct value and messaging leads to stronger bonds between brands and customers and creates lasting brand affinity.
Niche marketing is the process of identifying segments of industries and verticals that have a large audience that can be served in new ways.
Targeting in marketing keeps the messaging and marketing objectives on track. It helps in the identification of new marketing opportunities and avoid distractions that will lead you away from your target market.
Market Segmentation Process
Identifying the market and the target audience is the foundation for any marketing campaign. It helps the marketers study the type of consumers included in the target audience section and set expectations according to their needs. It helps organize and plan their marketing strategies as per the size of the target audience’s market and taste.
Once the target audience and size of the targeted audience are identified, it is necessary to review the needs and requirements of the consumers to meet the demands and expectations of the consumers.
Based on the demographic factors of classification of the consumers, it is necessary
for the marketers to subcategorize the products so that the products fit in the requirements for different age groups, different gender and so on.
5. Strategize the Marketing Campaign
Once the market research of all the necessary factors has been done, and the marketers have accumulated the consumer interest and their behavior, the marketing team, is all set to strategize their campaign for a particular product or service. Different advertisements and promotions, banners, etc., are included to promote the product or the service. The promotion should be done in such a way that it establishes a connection between the consumer and the product or the service as the connection is very important for the success of the campaign.
Market segmentation has been the cornerstone for all the successful brands in the
market, whether the company/marketer was a product based company or a service
provider company. For example, Redmi/Xiaomi has established itself as the most popular and highest-selling mobile phone brand in the market as they did their homework correct. They studied their consumers and their expectations and the sensitivity of the consumers towards the pricing of the phones. After reviewing the market carefully, they came with a successful launch and promotion of the product. Market-Segmentation Procedure
Marketers use a three-step procedure for identifying market segments:
1. Survey stage. The researcher conducts exploratory interviews and focus groups to gain
insight into customer motivations, attitudes, and behavior. Then the researcher prepares a questionnaire and collects data on attributes and their importance ratings, brand awareness and brand ratings, product-usage patterns, attitudes toward the product category, and respondents’ demographics, geographics, psychographics, and mediagraphics.
Companies can uncover new segments by researching the hierarchy of attributes that customers consider when choosing a brand. For instance, car buyers who
first decide on price are price dominant; those who first decide on car type (e.g., passenger, sport-utility) are type dominant; those who first decide on brand are brand dominant. With these segments, customers may have distinct demographics, psychographics, and mediagraphics to be analyzed and addressed through marketing programs.
Levels of Market Segmentation
Regardless of whether they serve the consumer market or the business market— offering either goods or services—companies can apply segmentation at one of four levels: segments, niches, local areas, and individuals.
Segment | Characteristic |
| |
Segment markets | similar wants, purchasing power, geographical location, buying attitudes, or buying habits |
SEGMENT MARKETS
A market segment consists of a large identifiable group within a market, with similar wants, purchasing power, geographical location, buying attitudes, or buying habits.
Because the needs, preferences, and behavior of segment members are similar
but not identical, marketers are urged to present flexible market offerings instead of one standard offering to all members of a segment. A flexible market
offering consists of the product and service elements that all segment members value, plus options (for an additional charge) that some segment members value. Segment marketing allows a firm to create a more fine-tuned product or service offering and price it appropriately for the target audience. The choice of distribution channels and communications channels becomes much easier, and the firm may find it faces fewer competitors in certain segments.
Example: Delta Airlines offers all economy passengers a seat, food, and soft drinks, but it charges extra for alcoholic beverages and earphones.
| Segment marketing allows a firm to create a more fine- tuned product or service offering and price it appropriately for the target audience. |
niches | A niche is a more narrowly defined group, typically a small market whose needs are not being well served. |
Local Markets | e tailored to the needs and wants of local customer groups (trading areas, neighborhoods, even individual stores). |
| |
individuals. | ultimate level of segmentation leads to “segments of one,” “customized marketing,” or “one-to-one marketing.” Mass customisation |
Niche Marketing
A niche is a more narrowly defined group, typically a small market whose needs are not being well served. Marketers usually identify niches by dividing a segment into subsegments or by defining a group seeking a distinctive mix of benefits. In an attractive niche, customers have a distinct set of needs; they will pay a premium to the firm that best satisfies their needs; the niche is not likely to attract other competitors; the nicher gains certain economies through specialization; and the niche has size, profit, and growth potential.
For example, a tobacco company might identify two subsegments of heavy smokers: those who are trying to stop smoking, and those who don’t care.
Local Marketing
Target marketing is leading to some marketing programs that are tailored to the needs and wants of local customer groups (trading areas, neighborhoods, even individual stores). Citibank, for instance, adjusts its banking services in each branch depending on neighborhood demographics.
Those favoring local marketing see national advertising as wasteful because it
fails to address local needs. On the other hand, opponents argue that local marketing drives up manufacturing and marketing costs by reducing economies of scale.
Moreover, logistical problems become magnified when companies try to meet varying local requirements, and a brand’s overall image might be diluted if the product and message differ in different localities.
Individual Marketing
The ultimate level of segmentation leads to “segments of one,” “customized marketing,” or “one-to-one marketing.”6 For centuries, consumers were served as individuals: The tailor made the suit and the cobbler designed shoes for the individual. Much businessto-business marketing today is customized, in that a manufacturer will customize the offer, logistics, communications, and financial terms for each major account. Now technologies such as computers, databases, robotic production, intranets and extranets, e-mail, and fax communication are permitting companies to return to customized marketing, also called “mass customization.”
Mass customization is the ability to prepare individually designed products and communications on a mass basis to meet each customer’s requirements.
The Four Types of Market Segmentation
The four bases of market segmentation are:
Within each of these types of market segmentation, multiple sub-categories further classify audiences and customers.
Demographic Segmentation
Demographic segmentation is one of the most popular and commonly used types of market segmentation. It refers to statistical data about a group of people.
Demographic Market Segmentation Examples
Where the above examples are helpful for segmenting B2C audiences, a business might use the following to classify a B2B audience:
Because demographic information is statistical and factual, it is usually relatively easy to uncover using various sites for market research.
A simple example of B2C demographic segmentation could be a vehicle manufacturer that sells a luxury car brand (ex. Maserati). This company would
likely target an audience that has a higher income.
Another B2B example might be a brand that sells an enterprise marketing platform. This brand would likely target marketing managers at larger companies (ex. 500+ employees) who have the ability to make purchase decisions for their teams.
Psychographic Segmentation
Psychographic segmentation categorizes audiences and customers by factors that relate to their personalities and characteristics.
Psychographic Market Segmentation Examples
Psychographic segmentation factors are slightly more difficult to identify than demographics because they are subjective. They are not data-focused and require research to uncover and understand.
For example, the luxury car brand may choose to focus on customers who value quality and status. While the B2B enterprise marketing platform may target marketing managers who are motivated to increase productivity and show value to their executive team.
Behavioral Segmentation
While demographic and psychographic segmentation focus on who a customer is, behavioral segmentation focuses on how the customer acts.
Behavioral Market Segmentation Examples
Behavioral segmentation requires you to know about your customer’s actions. These activities may relate to how a customer interacts with your brand or to other activities that happen away from your brand.
A B2C example in this segment may be the luxury car brand choosing to target customers who have purchased a high-end vehicle in the past three years. The B2B marketing platform may focus on leads who have signed up for one of their free webinars.
Geographic Segmentation
Geographic segmentation is the simplest type of market segmentation. It categorizes customers based on geographic borders.
Geographic Market Segmentation Examples
Geographic segmentation can refer to a defined geographic boundary (such as a city or ZIP code) or type of area (such as the size of city or type of climate).
An example of geographic segmentation may be the luxury car company choosing to target customers who live in warm climates where vehicles don’t need to be equipped for snowy weather. The marketing platform might focus their marketing efforts around urban, city centers where their target customer is likely to work.
TARGET MARKETING
Target marketing is the decision to identify the different groups that make up a market and to develop products and marketing mixes for selected target markets.
Target marketing strategies
Product or Service is designed to suit the needs of the market. At times, the products appeal to all or a section of the market. The product that appeals to everyone falls under the mass marketing strategy. Certain products are manufactured for a particular section of people. This section of people is known as the ‘target audience’. The marketing strategies focusing on the target audience is known as a target marketing strategy.
Based on the response from the market, marketing strategies are designed. The target marketing strategies vary based on the purchasing power of the customer, and the geographical location of the market. The types of target marketing strategies are dependent on multiple factors inclusive of age group, gender, geographical location to name a few.
Designing a target market strategy aids to focus the time and effort of the marketing
team to increase sales in its target group of customers. The different types of target markets need different targeting marketing definition. Based on the target marketing concept, marketing campaigns are designed to catch the customer’s eye. The market targeting and positioning of the product are crucial for doing business. The strategies vary based on the types of target markets.
VARIOUS TARGET MARKETING STRATEGIES
Broadly the target marketing strategies are classified into the following types
Few market targeting examples are:
Mass Marketing involves marketing to the entire population with a single strategy. Mass marketing focuses to reach everyone with maximum exposure to the product.
An attempt is made to spread the message to everyone with mass media such as TV, newspaper, and mobile.
Regularly consumed products like toothpaste and toothbrushes, mass marketing is all that is needed.
Segment Marketing known for its differentiated targeting strategy focuses on a section of people known as the ‘target audience’. The target marketing concept is to attract customers to their products. This segment marketing fetches good results for new products entering to market with established organizations. This differentiated marketing is expensive. The differentiated marketing strategy can be designed
uniquely for the different target audiences.
The company needs to design a unique product for the market segment and requires unique marketing campaigns and promotional events. The benefits of target marketing are it enables to manufacture of the products to suit the need of consumers. The marketing campaigns focus on, selling the products where the target audience frequently visits and creates suitable promotional campaigns.
Niche marketing also known as concentrated marketing targets a small section of the market. The entire campaign is around this small section of the market. Luxury goods like Rolex and Armani are examples of niche marketing. Niche marketing yields results for small companies with limited production and sales. There are advantages and disadvantages to niche marketing.
Advantages of niche market segment are:
Disadvantages of niche marketing are:
Micromarketing focuses on a much smaller section of people than niche marketing. Micromarketing definition is customized marketing or one-to-one marketing. The
products are customized to the requirements of the customer. The micro marketing strategies involve customer tastes, whims, and wishes. A good example of a micromarketing strategy is Etsy.com that focuses on handmade goods taking orders from customers with their specific requirements.
Few micromarketing examples are Uber and Red Bull. Uber used a unique local micromarketing strategy in each city to become visible and expand its customer base. Reb Bull did not focus on its unique point of being an energy drink but as a
lifestyle. Red Bull focused on its target audience ‘youth’ interested in sports.
Local marketing strategy involves nearby and neighborhood areas. The organizations use this marketing strategy to thrive on local connections and make their presence felt. Amazon Local is a good example of a local marketing strategy. The online service providers along with local businesses come up with offers for hotel booking, spa treatments, and restaurant meals at regular intervals. The local companies earn good revenue with sales.
Product positioning
Core strategy is at the hub of marketing strategy. It is where the strengths of a company meet market opportunities. It has two parts:
Differentiation
Consumers typically choose products and services that give them the greatest value. Thus the key to winning and keeping customers is to understand their needs and buying processes better than competitors do, and to deliver morevalue. To the extent that a company can position itself as providing superior value to selected target markets, either by offering lower prices than competitors door by providing more benefits to justify higher prices. It gains competitive advantage. 2. If a company positionsits product as offering the best quality and service, it must then develop the promised quality and service. Positioning therefore begins with differentiating the company's marketing offer, so that it will give consumers more value than competitors' offers do.
Differentiating Markets
In what specific ways can a company differentiate its offer from those of competitors V A company or market offer can be differentiated along the lines of product, services, personnel or image.
Product Differentiation - A company ean differentiate its physical produet. Companies can also differentiate their products on performance.
Services Differentiation: the firm can also differentiate the services that accompany the produet. Some companies gain competitive advantage through speedy, reliable or careful delivery.
Personnel Differentiation: Companies can gain a strong competitive advantage through hiring and training better people than their competitors do.
Image, Differentiation: Even when competing offers look the same, buyers may perceive a difference based on company or brand images. Thus companies work to
establish images that differentiate them from competitors.
Positioning:
Product positioning is defined as arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers and Formulating competitive positioning for a product and a detailed marketing mix. A product's position is the way the product is
defined by consumers on important attributes - the place the product occupies in consumers' minds relative to competing products.
Benefits of product positioning
Perceptual Mapping: Perceptual maps are a valuable aid to product positioning. A product positioning tool that uses multidimensional scaling of consumers' perceptions and preferences to portray the psychological distance between products and segments.
For example: The perceptual map shows how holidaymakers segment, as well as the possible destinations.
Basic Steps of Product Positioning Process
The positioning process is important to be identified and followed by any organization which wants to implement its marketing strategy soundly. It is a difficult task to identify and select a positioning strategy and thereby the correct positioning process for an organization.
There are 6 main steps in positioning process. In each of the steps, marketing research techniques can be employed to get the necessary information.
1– Define your target audience
Then, list the competitors which make the same industry as yours. There are three main types of competitors:
customers could use instead of choosing your products or services.
List the benefits and usage of the product. listing product features help to introduce it in a fine way. The marketers must be well aware of the features and benefits of the products.
It is the main component of any business plan. Define the target market and decide how to reach them. Use segmentation of the market. There are various approaches to segmentation but out of all benefit segmentation is relevant, which focuses upon the benefits or attributes that a segment believes to be important.
Product should have USP (unique selling propositions) and marketers must know what best their product can do. To make USP follow these tips:
You may want to promote your brand and building a fine image for it. you could do it by using these steps:
To make positioning decision that helps you in branding your business and marketing your product we introduce you some steps:
It is necessary to monitor the position, for that you have the variety of techniques that can be employed it can be on the basis of some tests and interviews which will help to monitor any kind of change in the image. step by step you could improve your business by monitoring your position.
Product positioning strategies
While a lot of time is devoted to product development, only a few companies think about how consumers will perceive the product when it’s already in the market.
Product positioning is about understanding the products to introduce to the masses. That’s why it’s critical to pay attention to what your customers think. Let’s explore the key strategies that will help you define the position of your product.
turnover, and a large procurement of goods. As a result, many consumers already know the supermarkets with attractive prices and choose them without considering other options.
Errors of product positioning
Introduction to Product Development
In this fast-changing world we are experiencing change in our daily life and at marketplace too. Customer needs, wants, and expectations are changing more rapidly. Customers are increasingly demanding advance features, appealing designs, better quality, and reliability in products. To meet the changing demands of customer, business organisations are investing heavily in research and development (R&D). Business organisations are updating existing products and developing new products to satisfy changing customer needs, wants, and expectations.
The development of competitive new products is a prerequisite for every business organisation to be successful. Samsung has outperformed Nokia in the global mobile-phone market and become the global leader. Samsung updates its existing mobile phones and brings new mobile phones more frequently at competitive low price with advance features, appealing designs, better quality and reliability. Nokia failed to satisfy changing customer needs, wants, and expectations, and lost its market position.
DefinitionProductDevelopment In general, the Product Development can be defined as "creating, innovating, or developing entirely a new product , or presenting an existing product with enhanced utility, improved features, more appealing design, better quality
and reliability to satisfy the requirements of its end-users
Meaning of Product Development Product means a good, service, idea or object created as a result of a process and offered to serve a need or satisfy a want. Development means the act or process of growing, progressing, or developing.
Product
introduce
Development is a process of improving the existing product or to a new product in the market. It is also referred as New Product Development.
The functions of product development are as follows:
:-
Product Development Process
Product development process is a crucial process for the success and survival of any
business. Today, businesses are operating in a highly dynamic and competitive environment. Business organisations have to continuously update their products to conform to current trends. The product development process starts from idea generation and ends with product development and commercialisation. Following are the steps in the process of product development.
to products. Most promising idea is kept for the next stage.
development process. For the selected idea different product concepts are developed. Out of several product concepts the most suitable concept is selected and introduced to a focus group of customers to understand their reaction. For example - in auto expos different concept cars are presented, these models are not the actual product, they are just to describe the concept say electric, hybrid, sport, fuel efficient, environment friendly, etc.
the product is technically and commercially feasible to produce. Here the research and development department develop a physical product.
market.
New product development
In business , new product development (NPD) is the complete process of bringing a new product to market.
New product development is described in the literature as the transformation of a market opportunity into a product available for sale and it can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief).
NEW PRODUCT PLANNING :
As a firm’s offerings enter the maturity and decline stages of the product life cycle, it must add new items to continue to prosper.
–Alternative Product Development Strategies :
IMPORTANCE OF NPD:
PROCESS : NEW PRODUCT DEVELOPMENT
Step 1: Generating
Utilizing basic internal and external SWOT analyses, as well as current marketing
trends, one can distance themselves from the competition by generating ideologies which take affordability, ROI, and widespread distribution costs into account. Lean, mean and scalable are the key points to keep in mind. During the NPD process, keep the system nimble and use flexible discretion over which activities are executed. You may want to develop multiple versions of your road map scaled to suit different types and risk levels of projects.
Step 2: Screening The Idea
Wichita, possessing more aviation industry than most other states, is seeing many new innovations stop with Step 2 – screening. Do you go/no go? Set specific criteria for ideas that should be continued or dropped. Stick to the agreed upon criteria so
poor projects can be sent Because product development
back to the idea-hopper costs are being cut in
early on.
areas like
Wichita, “prescreening product ideas,” means taking your Top 3 competitors’ new innovations into account, how much market share they’re chomping up, what benefits end consumers could expect etc. An interesting industry fact: Aviation industrialists will often compare growth with metals markets; therefore, when Boeing is idle, never assume that all airplanes are grounded, per se.
Step 3: Testing The Concept
As Gaurav Akrani has said, “Concept testing is done after idea screening.” And it is important to note, it is different from test marketing. Aside from patent research, design due diligence, and other legalities involved with new product development; knowing where the marketing messages will work best is
often the biggest part of testing the concept. Does the consumer understand, need, or want the product or service?
Step 4: Business Analytics
During the New Product Development process, build a system of metrics to monitor progress. Include input metrics, such as average time in each stage, as well as output metrics that measure the value of launched products, percentage of new
product sales and other figures that provide valuable feedback. It is important for an organization to be in agreement for these criteria and metrics.
Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to be a valuable asset for future products and a basis for learning and growth.
Step 5: Beta / Marketability Tests
Arranging private tests groups, launching beta versions, and then forming test panels after the product or products have been tested will provide you with valuable information allowing last minute improvements and tweaks. Not to mention helping
to generate a small amount of buzz. WordPress is becoming synonymous with beta testing, and it’s effective; Thousands of programmers contribute code, millions test it, and finally even more download the completed end-product.
Step 6: Technicalities + Product Development
Provided the technical aspects can be perfected without alterations to post-beta products, heading towards a smooth step 7 is imminent. According to Akrani, in this step, “The production department will make plans to produce the product. The marketing department will make plans to distribute the product. The finance department will provide the finance for introducing the new product”. As an example; In manufacturing, the process before sending technical specs to machinery involves printing MSDS sheets, a requirement for retaining an ISO 9001 certification (the organizational structure, procedures, processes and resources needed to implement quality management.) In internet jargon, honing the technicalities after beta testing involves final database preparations, estimation of server resources, and planning automated logistics. Be sure to have your technicalities in line when moving forward.
Step 7: Commercialize
At this stage, your new product developments have gone mainstream, consumers are purchasing your good or service, and technical support is consistently monitoring progress. Keeping your distribution pipelines loaded with products is an integral part of this process too, as one prefers not to give physical (or perpetual) shelf space to competition. Refreshing advertisements during this stage will keep your product’s name firmly supplanted into the minds of those in the contemplation stages of purchase.
Step 8: Post Launch Review and Perfect Pricing
Review the NPD process efficiency and look for continues improvements. Most new products are introduced with introductory pricing, in which final prices are nailed down after consumers have ‘gotten in’. In this final stage, you’ll gauge overall value
relevant to COGS (cost of goods sold), making sure internal costs aren’t overshadowing new product profits. You continuously differentiate consumer needs as your products age, forecast profits and improve delivery process whether
physical,
- See more
or digital, products are being perpetuated. at: http://www.innovationexcellence.com/blog/2013/05/27/8-step-
process-perfects-new-product-development/#sthash.mhG2FZAV.dpuf
Step 1: Generating
Utilizing basic internal and external SWOT analyses, as well as current marketing trends, one can distance themselves from the competition by generating ideologies which take affordability, ROI, and widespread distribution costs into account. Lean, mean and scalable are the key points to keep in mind. During the NPD process, keep the system nimble and use flexible discretion over which activities are executed. You may want to develop multiple versions of your road map scaled to suit different types and risk levels of projects.
Step 2: Screening The Idea
Wichita, possessing more aviation industry than most other states, is seeing many new innovations stop with Step 2 – screening. Do you go/no go? Set specific criteria for ideas that should be continued or dropped. Stick to the agreed upon criteria so
poor projects can be sent Because product development
back to the idea-hopper costs are being cut in
early on.
areas like
Wichita, “prescreening product ideas,” means taking your Top 3 competitors’ new innovations into account, how much market share they’re chomping up, what benefits end consumers could expect etc. An interesting industry fact: Aviation industrialists will often compare growth with metals markets; therefore, when Boeing is idle, never assume that all airplanes are grounded, per se.
Step 3: Testing The Concept
As Gaurav Akrani has said, “Concept testing is done after idea screening.” And it is important to note, it is different from test marketing. Aside from patent research, design due diligence, and other legalities involved with new product development; knowing where the marketing messages will work best is often the biggest part of testing the concept. Does the consumer understand, need,
or want the product or service?
Step 4: Business Analytics
During the New Product Development process, build a system of metrics to monitor progress. Include input metrics, such as average time in each stage, as well as output metrics that measure the value of launched products, percentage of new product sales and other figures that provide valuable feedback. It is important for an organization to be in agreement for these criteria and metrics. Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to be a valuable asset for future products and a basis for learning and growth.
Step 5: Beta / Marketability Tests
Arranging private tests groups, launching beta versions, and then forming test panels after the product or products have been tested will provide you with valuable information allowing last minute improvements and tweaks. Not to mention helping to generate a small amount of buzz. WordPress is becoming synonymous with beta testing, and it’s effective; Thousands of programmers contribute code, millions test it, and finally even more download the completed end-product.
Step 6: Technicalities + Product Development
Provided the technical aspects can be perfected without alterations to post-beta products, heading towards a smooth step 7 is imminent. According to Akrani, in this step, “The production department will make plans to produce the product. The marketing department will make plans to distribute the product. The finance department will provide the finance for introducing the new product”. As an example; In manufacturing, the process before sending technical specs to machinery involves printing MSDS sheets, a requirement for retaining an ISO 9001 certification (the organizational structure, procedures, processes and resources needed to implement quality management.) In internet jargon, honing the technicalities after beta testing involves final database preparations, estimation of server resources, and planning automated logistics. Be sure to have your technicalities in line when moving forward.
Step 7: Commercialize
At this stage, your new product developments have gone mainstream, consumers are purchasing your good or service, and technical support is consistently monitoring
progress. Keeping your distribution pipelines loaded with products is an integral part of this process too, as one prefers not to give physical (or perpetual) shelf space to competition. Refreshing advertisements during this stage will keep your product’s name firmly supplanted into the minds of those in the contemplation stages of purchase.
Step 8: Post Launch Review and Perfect Pricing
Review the NPD process efficiency and look for continues improvements. Most new products are introduced with introductory pricing, in which final prices are nailed
down after consumers have ‘gotten in’. In this final stage, you’ll gauge overall value relevant to COGS (cost of goods sold), making sure internal costs aren’t overshadowing new product profits. You continuously differentiate consumer needs as your products age, forecast profits and improve delivery process whether physical or digital, products are being perpetuated.
NPD PROCESS STRUCTURE
The NPD process consists of a series of activities that firms employ in the complex process of delivering new products to the market. Every new product will pass through a series of stages from ideation through design, manufacturing and market introduction. The development process basically has three main phases:
NEW PRODUCT DEVELOPMENT
:
Idea Generation
The first step in the new product development process is idea generation in which a number of new ideas are searched. Following are some of important sources that are used to obtain new ideas about the product.
In the internal environment, the engineers, executives, salespersons and scientists (etc.) are motivated to think of getting some new ideas. Communicating with customers regarding complaints and market surveys are also helpful in the accumulation of new ideas. In this step different ideas are searched only without examining their practicability and profitability.
Idea Screening
In this step the accumulated ideas are analyzed in order to pick the best ideas while dropping the bad ones. It is obvious that for every new idea of a product, certain costs would definitely be incurred especially in the later steps. Also, it is not appreciable to search a lot of ideas, but the good thing is that the searched ideas are profitable one. So in this step the nominated committee evaluates all the searched ideas on the following criteria to check their relative feasibility.
Concept Development and Testing
When a business organization selects a potential idea, it converts it into a product concept to test the feasibility.
A product idea is simply an idea that seems practical to be converted into actual products.
The product concept is the version of that idea in some practical details. The product image is the position of the product in the minds of customers.
So the business develops its concept of product and tests its profitability by conducting surveys in the market. Main concept or rough picture of the new product is shared with the customers to check its practicability. The detailed physical presentation of the new product can increase its reliability.
Marketing Strategy
When the product concept of any product ideas is effectively tested, then
a marketing strategy is prepared for it. This marketing strategy contains a statement divided into three parts.
The first part includes target market, sales, market share, market positioning, and profit goals for the coming few years. The second part includes strategy about planned price, budget for the first year and distribution of the new product.
The third part describes estimated sales in the long run along with the profit and the strategy of the marketing mix.
Business Analysis
When the product concept is passed along with its marketing strategy, the business analysis is conducted in the overall attractiveness of the proposal. It analyzes the costs, sales and projected profits of the new product in order to check its feasibility with the organization’s objectives. When the new product is passed in this step, it enters into the stage of product development.
Product Development
Before the product development step of a new product development process, the product is only in a crude form of concept, picture or words. But in this step the business takes a big jump of investment and its Research and Development team starts converting the words or picture into physical reality. For this purpose a sample prototype is prepared that contains the main features of the product to further check the practicability in its functions.
Test Marketing
When the sample product passes the functional tests, its test marketing is started, in which it is marketed to the customers to check its further practical potential before manufacturing in large scale. For this purpose the business develops a proper
marketing program that takes into account all the practical elements of marketing mix like pricing, advertising, distribution, budget, Branding and Packaging.
Commercialization
This is the last step of the new product development process in which the new product is manufactured and offered on a large scale for profit purpose. It is also important as the business has to incur the high cost and faces real challenges, like when to launch the new product and where it should be launched? etc.
Product Life cycle Management
A product life cycle is the length of time from a product first being introduced to consumers until it is removed from the market. A product’s life cycle is usually broken down into four stages; introduction, growth, maturity, and decline.
Importance of product life cycle in business includes various points to determine the marketing strategies related to the particular product. The Importance are:-
1. It works as a forecasting tool,
Stages of the Product Life Cycle
The four major stages of the
product
life
cycle
are as follows:-
Introduction Stage
At this stage, the product is new to the market and few potential customers are aware of the existence of the product. The price is generally high. The sales of the product are low or may be restricted to early adopters. Profits are often low or losses are being made, this is because of the high advertising cost and repayment of developmental cost. At the introductory stage:-
Growth Stage
At this stage, the product is becoming more widely known and accepted in the
market. Marketing is done to strengthen the brand and develop an image for the product. Prices may start to fall as competitors enter the market. With the increase in sales, profit may start to be earned, but advertising cost remains high. At the
growth
stage:-
Maturity Stage
At this stage, the product is competing with alternatives. Sales and profits are at their peak. Product range may be extended, by adding both withe and depth. With the increases in competition, the price reaches its lowest point. Advertising is done
to reinforce the product image in the consumer's minds to
increase purchases. At maturity Stage:
Decline Stage
At this stage, sales start to fall fast as a result product range is reduced. The product faces reduced competition as many players have left the market and it is expected that no new competitor will enter the market. Advertising cost is also reduced. Concentration is on remaining market niches as some price stability is expected there. Each product sold could be profitable as developmental costs have been paid at an earlier stage. With the reduction in sales volume, overall profit will also reduce.
At
decline
stage:-
PRODUCT DECISIONS
Product related decisions form one of the 4Ps of marketing mix. These decisions include introduction of new products, Improvement of existing products, planned elimination of obsolete products and, packaging and branding.
According to Philip Kotler “A product is anything tangible or intangible that can be offered to a market for attention, acquisition use or consumption that might satisfy a need or want”.
Product Decisions are vital marketing decisions to be made at various levels. These decisions broadly cover:
Levels of product
For example: – Wheat is a grain that one can consume.
For example: – Fortune Chakki Fresh Atta (wheat flour).
For example: – Chapati is prepared from wheat flour.
Product Classifications
Generally products are classified into two types, on the basis of three characteristics: durability,
tangibility, and consumer or industrial use, namely
5 levels of product
Consumer goods i) Based on shopping Efforts | convenience goods |
|
shopping goods |
| |
specialty goods |
| |
unsought goods |
| |
ii) Durability | Durable |
|
and Tangibility | |
variable, and perishable products (such as haircuts or cell phone service),
| |||
Non durable |
frequently
| ||||
Industrial goods | Materials and parts |
| , | farm | products, |
Manufactured materials and parts |
| ||||
Capital items |
| ||||
PRODUCT MIX
A product mix (also called product assortment) is the set of all products and items that a particular marketer offers for sale.
The product mix of an individual company can be described in terms of width, length, depth, and consistency.
PRODUCT MIX OF COCA COLA
| | finished product.
(such as factories) and equipment (such as trucks and computers),
| ||
| ∙ | |||
| ∙ | |||
Supplies services | and | business | are short-lasting goods and services that facilitate developing or managing the finished product. | |
are in end use, production requirements, distribution channels, or some other way.
These four product-mix dimensions permit the company to expand its business by (1) adding new product lines, thus widening its product mix; (2) lengthening each product line; (3) deepening the product mix by adding more variants; and (4) pursuing more product-line consistency.
Product line
This refers to a range of closely-related products belonging to the same class. They are sold to the same customers, having identical attributes marketed by the same distribution channel but for different segments. The product decision relating to a product line are:
Managers must periodically review the entire product line for pruning, identifying weak items through sales and cost analysis. They may also prune when the company is short of production capacity or demand is slow.
BRANDING, PACKAGING, AND LABELLING IN MARKETING
Introduction
There are millions of products and services all over the world, each claims to be the best among their category. But, every product is not equally popular. Consumer doesn't remember every product, only few products are remembered by their name, logo, or slogan. Such products generate desired emotions in the mind of consumer. It is branding that makes product popular and known in the market; branding is not an activity that can be done overnight, it might takes months and even years to create a loyal and reputed brand.
Branding gives personality to a product; packaging and labelling put a face on the product. Effective packaging and labelling work as selling tools that help marketer sell the product.
Today in this post we'll learn - meaning of branding, types of brand, strategies of branding, meaning of packaging and labelling, and importance of packaging and labelling.
Definition of Branding
According to American Marketing Association - Brand is “A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade name.”
According to Philip Kotler - “Brand is a name, term, sign, symbol, design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”
Branding is “a seller’s promise to deliver a specific set of features, benefits and services consistent to the buyers.”
Meaning of Branding
Branding is a process of creating a unique name and image for a product in the mind of consumer, mainly through advertising campaigns. A brand is a name, term, symbol, design or combination of these elements, used to identify a product, a family of products, or all products of an organisation.
Branding is an important component of product planning process and an important and powerful tool for marketing and selling products.
Elements of Branding
Brand includes various elements like - brand names, trade names, brand marks, trade marks, and trade characters. The combination of these elements form a firm's corporate symbol or name.
o Brand Mark - It is a unique symbol, colouring, lettering, or other design element. It is visually recognisable, not necessary to be pronounced. For example - Apple's apple, or Coca-cola's cursive typeface.
o Trade Mark - It is a word, name, symbol, or combination of these elements. Trade mark is legally protected by government. For example - NBC colourful peacock, or McDonald's golden arches. No other organisation can use these symbols.
o Trade Characters - Animal, people, animated characters, objects, and the like that are used to advertise a product or service, that come to be associated with that product or service. For example - Keebler Elves for Keebler cookies , Amul Butter
Branding Strategies
There are various branding strategies on which marketing organisations rely to meet sales and marketing objectives. Some of these strategies are as following :-
to increase revenue sources, enhance organisation image, and sell more of their core products.
can increase its profits by selling private brands without affecting the reputation and sales of its national brand.
o Co-Branding - According to this strategy one or more brands are combined in the manufacture of a product or in the delivery of a service to capitalise on other companies' products and services to reach new customers and increase sales for both companies' brands.
What Is Packaging?
Packaging is the act of enclosing or protecting the product using a container to aid its distribution, identification, storage, promotion, and usage.
In simple terms, packaging refers to designing and developing the wrapping material or container around a product that helps to
Importance Of Packaging
As an essential marketing subset, packaging forms the core distribution, storage, and sales tool that can be a part of the product itself or an external container made of varied materials.
Packaging is an essential element both for the seller and the customer. While the seller use it as a tool to distribute, store, and promote; the customer uses it as an important identification and usage tool.
Importance Of Packaging For The Seller
and mishandling. Proper packaging helps the seller store and assort the products better.
Importance Of Packaging For The Buyer
Functions Of Packaging
Packaging plays a crucial role from the time a product is developed to the time a product is fully consumed. These functions of packaging include:
Moreover, attractive packages have a property to stand out and attract customers towards it.
Types Of Packaging
Usually, packaging can be categorised into three types depending upon its usage and purpose. These types are:
Primary Packaging
Primary packaging, also referred to as consumer packaging, is in direct contact with the product and is intended for the customer to identify, gain product knowledge, and to aid product consumption.
It’s the base packaging that emphasises both utility and appearance.
It is the primary layer like the plastic pouch, cardboard box, etc. containing the finished product, that protects and preserves the finished product from contamination and tampering, while including aesthetic elements that make the product stand out.
Besides aiding identification, differentiation, and consumption, primary packaging also acts as a promotional tool to attract more customers at the point of sale by making the product look more appealing.
Some examples of primary packaging are:
Often, removing the primary packaging of a product affects the product’s quality or attribute.
Secondary Packaging
Secondary packaging forms the second packaging layer that the customers don’t usually see. Its main use is to group and hold together individual units of the product to deliver large quantities of that product to the point of sale.
It collates smaller product units into a single pack and aids in inventory management (grouping and identification) before the product is showcased to the customer.
Some examples of secondary packaging are:
Tertiary Packaging
Tertiary packaging, also referred to as bulk or transit packaging, is used to group a large quantity of a particular product to transport it from point A to B.
The main objective of this packaging is to make it easier to transport heavy loads or large quantities of a product easily and securely, while facilitating easy storage and handling.
Some examples of tertiary packaging are:
Packaging Advantages
Packaging comes with its own set of advantages. These are:
Packaging Disadvantages
While packaging forms an important element of a product, it comes with its own disadvantages. These are:
Case Study 1
Case study 2
Case study 3
Question Bank
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