1. MARKETING - 4

2. Product level/Customer value hierarchy
1. Core benefit
2. Basic product
3. Expected product
4. Augmented product
5. Potential product

3. Product mix/Product Assortment
4 Elements :
1. Width
2. Length
3. Depth
4. Consistency

4. Product Line
 A group of products within a product class
that are closely related because they
perform a similar function, are sold to the
same customer groups, are marketed
through the same channels, or fall within
given price ranges
 Eg Life insurance

5. NEW PRODUCT DEVELOPMENT
 A product must be entirely new or
changed in a functionally significant or
substantial respect.
 Need of New product development

6. New product development process – 7
1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing strategy
5. Business analysis
6. Product development and testing
7. Commercialization

7. 1. Idea Generation
 Interacting with others
- Customers
- Dist channel members
- Competitors
- Sales force
- MR and AD agencies
- Suppliers
- Top Mgt and Scientists and consultants.

8.  Idea Generating techniques/Creativity techc
- Brainstorming – Alex osborn
- Problem analysis
- Synectics – Willam Gordon

9. 2.Idea screening
 Ideas 3 groups
- Promising ideas
- Marginal ideas
- Rejects
2 types of errors
- Drop error
- Go error

10. 3. Concept Development and testing
Is an elaborated version of the idea
expressed in meaningful will Consumer
term.
 Who will use the product
 What benefit should this product use the
product
 When the consumer should use the
product.

11.  Concept testing
 Conjoint Analysis tools

12. 4. Marketing Strategy
3 parts
 Target markets size, structure and
behavior
 Outlines the planned price, Dist and
marketing budget for one year
 Long run sales and profit goals and
marketing mix strategy

13. 5. Business Analysis
Needs to prepare sales, cost and profit
projections to determine whether they
satisfy company objectives.

14. 6. Product Design and Development
 Product idea can be translated into a
technically and commercially feasible
product
R & D
 Prototype products – test
 Functional test – Alpha test
 Consumer test – Beta test

15. 7. Market Testing
Consumer goods market testing and
business goods market testing.
 Consumer goods market testing
- Ranking
- Monadic test 1 – 7
- Direct comparison test

16. - Sales – Wave research
- Printed shopping list/Stimulated test
marketing/accelerated test marketing
- Controlled test marketing/mini market
testing.

17.  Business – goods market testing/industrial
goods
 Alpha testing
 Beta testing
 Trade shows
 Distributor and dealer display rooms

18. Mgt faces Several decisions :
 How many test cities?
 Which Cities
 Length of tests
 What information
 What action to take?

19. 8. Commercialization
 When ( Timing)
- First entry
- Parallel entry
- Late entry
 Where ( Geographic strategy)
 To Whom ( Target – Market prospects)

20. The consumer Adoption process/Stages
Everett . M . Rogers
1. Innovators
2. Early Adopters
3. Early majority
4. Late majority
5. Laggards

21. PLC
 PLC curves are portrayed as bell shaped.
This curve is typically divided into four
stages: Introduction, growth, maturity and
decline.
 S shaped sales curve

22. Product life Cycle /PLC
4 things :
1. Limited life
2. Sales pass through distinct stages
3. Profit rise and fall
4. Different strategies

23. PLC
4 STAGES
1. INTRODUCTION
2. GROWTH
3. MATURITY
4. DECLINE

24. INTRODUCTION STRATEGIES
 PRODUCT – OFFER A BASIC PRODUCT
 PRICE – CHARGE COST – PLUS
 DISTRIBUTION – BUILD SELECTIVE
DISTRIBUTION
 ADVERTISING – BUILD PRODUCT
AWARENESS AMONG EARLY ADOPTERS AND
DEALERS
 SALES PROMOTION – USE HEAVY SALES
PROMOTION TO ENTICE TRIAL

25. GROWTH STRATEGIES
 PRODUCT – OFFER PRODUCT
EXTENSIONS,WARRANTY
 PRICE – PRICE TO PENETRATE
 DISTRIBUTION – BUILD INTENSIVE
DISTRIBUTION
 ADVERTISING – BUILD AWARENESS AND
INTEREST IN THE MASS MARKET.
 SALES PROMOTION –REDUCE TO TAKE
ADVANTAGE OF HEAVY CONSUMER
DEMAND

26. MATURITY STRATEGIES
 PRODUCT – DIVERSIFY BRANDS AND ITEMS
MODELS
 PRICE – PRICE TO MATCH OR BEST
COMPETITIORS
 DISTRIBUTION – BUILD MORE INTENSIVE
DISTRIBUTION
 ADVERTISING –STRESS BRAND
DIFFERENCES.
 SALES PROMOTION –INCREASE TO
ENCOURAGE BRAND SWITCHING

27. DECLINE STRATEGIES
 PRODUCT – PHASE OUT WEAK
 PRICE – CUT PRICE
 DISTRIBUTION – GO SELECTIVE :
PHASE OUT UNPROFITABLE OUTLETS
 ADVERTISING –REDUCE TO LEVEL
NEEDED TO RETAIN HARD – CORE
LOYALS
 SALES PROMOTION –REDUCE TO
MINIMAL LEVEL

28. PRICING
 2nd P of marketing is Pricing
 A price is an expression of value.
 Price = Value
 Price = Something
 The firm must decide where to position
its product on quality and price.

29. SIX STEP PROCEDURE/Pricing policies
1. SELECTING THE PRICING OBJECTIVE
2. DETERMING DEMAND
3. ESTIMATING COSTS
4. ANALYZING COMPETITORS COSTS,
PRICE AND OFFERS
5. SELECTING A PRICING METHOD
6. SELECTING THE FINAL PRICE

30. 1. Selecting the pricing objectives
 J.W. Kelvini
- Short term pricing objectives
- Long term pricing objectives

31. 2. Determining demand
 Price Elasticity of Demand
 Income Elasticity of Demand
 Price sensitive

32. 3. Estimating Costs
 Fixed cost
 Variable Cost

33. 4. Analyzing Competitors – costs , prices
and offers.

34. 5. Selecting the Pricing
Methods/Approaches/Strategies
 Cost Oriented
 Demand – Oriented /Perceived value
pricing
 Competition oriented/Going Rate pricing
 Value pricing

35.  Auction type pricing
- English Auctions (Ascending bids)
- Dutch Auctions ( Descending bids)
- Sealed bid actions
 Group pricing
 Skimming pricing
 Penetration pricing

36.  Premium pricing
 Psychological Pricing
 Discount pricing – 4
- Cash discount
- Quantity discount
- Seasonal discounts
- Allowance

37.  Geographical pricing
 Discriminatory pricing –
- Customer segment pricing
- Product form pricing
- Place /location pricing
- Time pricing
- Image pricing
 Product Bundling pricing/ Mixed bundling

38. 6. Selecting the Final Price
 Psychological pricing
 The influence of other marketing mix
elements – AD , Brand .
 Company pricing policies
 Impact of price on other parties.