marketing chp 11

Alternatives to traditional test marketing include

-Single source research using supermarket scanner data. Information Resources Inc. pioneered this technology in the early 1980s. -Simulated (laboratory) market testing. Advertising and other promotional materials for several products are shown to members of the product's target market. These people are taken to a mock or real store where their purchases are recorded. -The Internet provides a fast, cost-effective way to conduct test marketing.

New Product Success Factors

-listening to customers -producing the best product -vision of future market -getting every aspect right -strong leadership -commitment to new-product development -project-based team approach

Considerations in Business Analysis Stage

1. Demand 2. Cost 3. Sales 4. Profitability

Categories of Adopters

1. Innovators-a product perceived as new by a potential adopter. 2. Early Adopters-the process by which the adoption of an innovation spreads 3.Early adopters-The next 13.5 percent to adopt the product. They are oriented to the community and rely on group norms and values. 4. Early Majority-The next 34 percent to adopt. They weigh the pros and cons before adopting a new product and rely on group information. 5. Late Majority-The next 34 percent to adopt. They adopt a new product because most of their friends have already adopted it. 6. Laggards-The final 16 percent to adopt. By the time laggards adopt an innovation, it has probably been outmoded. Marketers typically ignore laggards, who do not seem to be motivated by promotion and personal selling.

six categories of new products

1. New-to-the-world products-create an entirely new market and are the smallest category of new products. 2. New product lines-allow a firm to enter an established market. 3. Additions to existing product lines-include new products that supplement a firm's established prodct line. 4. Improvements or revisions of existing products- 5. Repositioned products-new markets or market segments. 6. Lower-priced products- provide performance similar to competing brands at a lower price.

Product Life Cycle

A concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death).

Simultaneous Product Development Non-Linear

A team-oriented approach to new-product development where all relevant functional areas and outside suppliers participate in the development process.

Diffusion

An innovation is a product perceived as new by a potential adopter. It really doesn't matter whether the product is "new to the world" or some other category of new product.

Product Failure

Despite the amount of time and money spent on developing and testing new products, a large proportion of new product introductions fail. The most important factor in successful new-product introduction is a good match between the product and market needs.

reasonsof product failure

One common reason is that they simply do not offer any discernible benefit compared to existing products. • new product failures is a poor match between product features and customer desires. • overestimation of market size, incorrect targeting or positioning, a price too high or too low, inadequate distribution, poor promotion, or simply, an inferior product.

Focus Group

The objective of focus group interviews is to stimulate insightful comments through group interaction.

Two types of communication aid the diffusion process:

Word-of-Mouth communication among consumers: Opinion leaders discuss new products. Suppliers of some products, such as professional and health care services, rely almost solely on word-of-mouth communication for new business. Communication directly from the marketer to potential adopters: Messages directed toward early adopters should use different appeals than messages directed toward the early and late majority, or the laggards.

new-product strategy

a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation

A Concept Test

a test to evaluate a new-product idea, usually before any prototype has been created

Development Stage

can last a long time and thus be very expensive. It took ten years to develop Crest toothpaste, fifteen years to develop the Polaroid Colorpack.

Five product characteristics

complexity-The more complex the product, the slower is its diffusion. compatibility-Incompatible products diffuse more slowly than compatible products relative advantage-The degree to which a product is perceived as superior to existing substitutes. observability-The degree to which the benefits or other results of using the products can be observed by others and communicated to target customers. trialability-The degree to which a product can be tried on a limited basis.

Establish an environment

conducive to achieving company-specific new-product and corporate objectives.

company-specific approach

driven by corporate strategy and objectives, with a well-defined new-product strategy at its core

long-term commitment

needed to support innovation and new-product development

Screening

the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason

test marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation

Brainstorming

the process of getting a group to think of unlimited ways to vary a product or solve a problem

Capitalize on experience

to achieve and maintain competitive advantage