Professional Documents
Culture Documents
Victoria Hurth
Me:
Marketing Co-ordinator 3M Commercial Graphics
Fellow of LEAD (Leadership for Environment and Development) British Council Climate Advocate
SESSION OUTLINE
New product development Why it is important The process involved Price Identify the meaning of price Examine the role of price within the marketing mix To consider the link of price to profit Explore the internal organisational forces that influence pricing decisions Understand the external factors that influence pricing decisions
CASH COWS Hold sales and market share Defend position Use cash to support stars, selected ?s and NPD
Build selectively Focus on defendable niche for dominance Harvest / divest the rest
DOGS
High
Low
ANSOFF MATRIX
Products
Existing New
Existing
Market Penetration
Product Development
Markets
New
Market Development
Diversification
NPD PROCESS
1. IDEA GENERATION
New-product development starts with idea generation, the systematic search for new product ideas. Sources of New ideas Internal Sources Customers Competitors Distributors Other Sources
http://www.youtube.com/watch?v=MKuwkTTPI5E
2. IDEA SCREENING
The purpose of this and the succeeding stages is to reduce the number of ideas. The purpose of screening is to spot good ideas and drop poor ones as soon as possible. Product development costs rise greatly in later stages. The company wants to go ahead only with the product ideas that will turn into profitable products.
3. CONCEPT TESTING
Process of testing product concepts with a group of target customers
4. BUSINESS ANALYSIS
Business analysis involves a review of the sales, costs and profit projections to find out whether they satisfy the companys objectives. If they do, the product can move to the product-development stage.
5. PRODUCT DEVELOPMENT
Here, R&D or engineering develops the product concept into a physical product. So far, the product has existed only as a word description, a drawing or perhaps a crude mock-up.
The product-development step, however, now calls for a large jump in investment. It will show whether the product idea can be turned into a workable product.
6. TEST MARKETING
If the product passes functional and consumer tests, the next step is test marketing.
Test marketing is the stage at which the product and marketing program are introduced into more realistic market settings.
7. COMMERCIALISATION
Introducing a new product into the market The company launching a new product must make four decisions: When Where To whom How Immediate national/intenational launch or rolling launch
Due consideration at each stage? Right people? Time and resources? Analysis and decision-making? Comparing forecast performance with actual performance
No access to market
Poor timing (launching too early or too late) Poor marketing
http://www.youtube.com/watch?v=S8tEuKA1kCM
http://www.youtube.com/watch?v=22gp69bNk
PRICE
WHAT IS PRICE?
Functional benefits fulfil desired function Quality expect price to reflect quality
WHAT PRICE MEANS TO THE SELLER Only P that directly generates income for the seller in the Marketing Mix Profit = Total revenue Total cost
Customers & consumers Pricing decision Legal & regulatory Channels of distribution
Competitors
Changes in price will be reflected in nature and size of potential demand Demand curve (can be influenced by other factors such as changing consumer tastes/ needs)
These members will all have desired levels of profit margins All these costs add to the final costs and take the total nearer to the consumers upper limit
Pricing decisions
Organisational objectives Marketing objectives Costs
2. Marketing objectives close focus on specific target markets and position desired within them
3. Costs the minimum a product can be sold for without making a loss. Requirements for surplus to fund investment etc.
Pricing objectives
Demand assessment
Involves a great deal of managerial skill in defining and exploring various scenarios along with other elements of price setting
COST-BASED PRICING
Mark-up Starts with price to supplier and then adds a % to reach retail price to the customer
DEMAND-BASED PRICING
Outward focus on customers and their responsiveness to different price levels Psychological pricing Prestige pricing Odd-even pricing Bundle pricing
COMPETITION-BASED PRICING
Structure of the market The number of competitors in the market Perceived value in the market The more differentiated the product is from competition, the more autonomy the company has in pricing it
THINK ABOUT
The costs and pricing strategies at each stage of the PLC Examples for price skimming and price penetration situations The problems a multinational company would face in marketing to a less developed country