Marketing 400 Unit 8

Fad

Goes up then quickly down

Sales and profit are at the lowest point in which area?

Introduction

Sales and profits are at the highest point in which area?

Maturity

Concept development and testing

refers to testing new-product concepts with groups of target consumers, using market research tools such, including:

Know the eight stages of the new product development process

1. Idea generation 2. Idea screening 3. Concept development and testing 4. Marketing strategy development 5. Business analysis 6. Product development 7. Test marketing 8. Commercialization

Product life cycle (PLC)

1. Product development 2. Introduction 3. Growth 4. Maturity 5. Decline

Understand the three types of test markets, including the advantages and disadvantages

Standard test markets Controlled test markets Simulates test markets

Simulated test markets

are events where the firm will create a shopping environment and note how many consumers buy the new product and competing products. Provides measure of trial and the effectiveness of promotion. Researchers can interview consumers.

Controlled test markets

are panels of stores that have agreed to carry new products for a fee. They are less expensive and faster than standard test markets, but still allow competitors to see the new product

Standard test markets

are small representative markets where the firm conducts a full marketing campaign and uses store audits, consumer and distributor surveys, and other measures to gauge product performance. Results are used to forecast national sales and profits, discover product problems, and fine-tune the marketing program

Style

gradually moves up and down multiple times

Fashion

gradually moves up and then down

Business analysis

involves a review of the sales, costs, and profit projections to find out whether they satisfy the company's objectives. The business analysis involves preparing a projected income statement that will include the following estimates

Marketing strategy development

involves developing the initial marketing strategy for introducing the product to the market. Marketing strategy includes:

Product development

involves the creation and testing of one or more physical versions by the R&D or engineering departments

Commercialization

is the introduction of the new product to the target market. It involves decision regarding the timing and location of the planned rollout. It often also involves a significant amount of promotion when a new product is launched, such as Starbuck's intensive advertising and promotion of its new Via instant coffee in 2009. Test markets were in Chicago, Seattle and London.

Idea scanning

is the process a company uses to evaluate new product ideas using a set of criteria to rank ideas according to projected profitability, need for the product, feasibility, environmental impact, competitive advantage and other important factors

Test marketing

is the stage at which the product and marketing program are introduced into more realistic marketing settings. Test markets provides the marketer with experience in testing the product and entire marketing program in a few locations before full introduction. There are three types of test markets - standard, controlled and simulated, as shown on the following slide.

Idea generation

is the systematic search for new-product ideas from either internal or external sources