Unit I

Product Development Organisation

New product development in functional department
New product development responsibility on product manager

Structural Units
New Product Department New Product Committee Ad hoc Committee Task Force Venture Team

Product Portfolio
The set of different products that an organisation produces, ideally balanced so that some products are mature, some are still in their growth stage while others are waiting to be introduced.

Product Portfolio

Portfolio Management
Portfolio Management is used to select a portfolio of new product development projects to achieve the following goals:
Maximize the profitability or value of the portfolio Provide balance Support the strategy of the enterprise

Portfolio Management is the responsibility of the senior management team of an organization or business unit.

Portfolio Management
This team, which might be called the Product Committee, meets regularly to manage the product pipeline and make decisions about the product portfolio. Often, this is the same group that conducts the stage-gate reviews in the organization.

A logical starting point is to create a product strategy markets, customers, products, strategy approach, competitive emphasis, etc. The second step is to understand the budget or resources available to balance the portfolio against. Third, each project must be assessed for profitability (rewards), investment requirements (resources), risks, and other appropriate factors.

Balancing Product Portfolio

Aggressively support the newly introduced product to ensure dominance
Continue present strategies to existing products to ensure maintenance of market share Gain share of market for products by investing in acquisitions Narrow down the range of models of product and focus on one segment

Diffusion of Consumer Innovations

How an innovation spreads among potential buyers and users.

Category according to product adoption:

Innovators Early Adopters Early Majority Late Majority Laggards 2% next 13% next 34% above 34% last 16%

Characteristics
Relative Advantage Compatibility Complexity Divisibility Communicability

 Types

Diffusion of Industrial Innovations

Process Product

Characteristics
Economic advantage Commitment Uncertainty Risk Reduction

Economic Analysis
Market Potential
Market Demand Estimating Sales
Estimating Replacement Sales Estimating Repeat Sales

Sales Forecasting Methodologies

Judgmental Estimates

Awareness trial repeat purchase

Unit II

Test Marketing
The stage of the new product development in which the product and marketing program are tested in realistic market settings. Lets the company test: Product Entire marketing program
Targeting, positioning, advertising, distribution, pricing, branding & packaging budget levels.

Types
Standard Test Markets Controlled Test Markets Simulated Test Markets

Standard Test Markets

Company finds small number of representative test cities Conducts a full marketing campaign in these cities Uses audits & survey results to see the product performance Most widely used method

Standard Test Markets Drawbacks

Costly Time Consuming Competitors can monitor test market results and interfere

Controlled Test Markets

Behavior scan Factors controlled are:
Shelf placement Price In- store promotions Direct mail promotions

Simulated Test Markets

Ads & promotions of variety of products are shown including new product Small amount of money is given to the sample consumers They are invited to the real or lab stores The researchers note how many buy new product & how many buy competing brands Feedback is taken after few days

New Product Launch

New Product Launch

The marketing plan for launch is a statement of the course of action to be followed for the products introduction into the market. It should clearly specify the marketing objectives, strategies and programs. Continuous process

 The marketing objectives for the new product should contain:

Unit or rupee value sales of the product by next year Market share by the year Product profitability in terms of percentage margins and payback

Analysis
Market Analysis
Market Overview Segment Overview Consumer Overview Competition Overview

Internal Analysis
The sales Force Promotional setup Distribution System

The Target Market

Criteria used to select an appropriate market segment:
Segment attractiveness Ease of Access Degree of fit Competitive Situation Relative Advantage Profitability

Product Strategy
Finalization of the product benefits, features and attributes. Developing Growth strategy

Product Positioning
Deciding how the product will be perceived by potential customers. A product positioning statement should clearly show the end-use and the benefit sought to be delivered.

Pricing the New Product

Use the products target market and positioning strategy Skimming versus Penetration Pricing Promotional Pricing

Advertising for New Product

Decisions to be taken:
Advertising Objectives Advertising Budget Advertising Strategy

Media Selection
Media Image & Editorial Content Media Scheduling
Should take into account time response function to the introductory advertising as well as competitive reactions.

BRAND & BRANDING

BRAND
American Marketing Association
A name, term, sign, symbol or design or a combination of them intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of competitors.

Conveys Six levels of Meaning

Attributes Benefits Values Culture Personality User

TYPES OF BRANDS
Functional (attributes or benefits) Symbolic (emotional aspect)

BRANDING
Branding is a process that is used by the businesses to utilize marketing strategies To enhance their product or service image so that it is more readily recollected by the customer Branding helps the product or service to make a favorable impact on the target customer while the branding concepts help in outlining the guidelines that should be followed during the branding process.

TYPES
Personal Branding Corporate Branding Individual Branding Faith Branding Nation Branding Foreign Branding Audio/Sound Branding Rebranding

Assessing a Brand
Visibility

Benchmarking with other similar brands Brand

Media Presence

Parent Company Sales / Market Share Captured

Advertisement Likeability

Brand Equity
When a commodity becomes a brand, it is said to have equity. Goodwill: the convergence of finance & marketing

A source of value for the consumer

A source of value to the company

Brand Personality
Brand personality is the way a brand speaks and behaves. It means assigning human personality traits/characteristics to a brand so as to achieve differentiation. These characteristics signify brand behaviour through both individuals representing the brand as well as through advertising, packaging, etc.

ADVERTISING

Advertising is any paid form of non personal presentation and promotion of ideas, goods or service by an identified sponsor. Ads are cost effective way to disseminate messages. Handling Small Company

sales & marketing department

A separate department

Large Company

Objectives
Classification on the basis of:
Informative advertising Persuasive advertising Reminder advertising Reinforcement advertising

5 Ms of Advertising
MESSAGE
Message generation Message evaluation & selection Message execution Social responsibility review

MONEY MISSION
Sales Goals Advertising objectives
Factors: Stage in PLC Market share & consumer base Competition & Clutter Advertising frequency Product suitability

MEASUREMENT
Communication impact Sales impact

MEDIA
Reach, frequency, impact Major media types Specific media vehicles Media timing Geographical media allocation

Public Relations