Professional Documents
Culture Documents
understand its customers, markets and competitors develop products that deliver superior value to customers.
Idea Generation and Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization
Internal sources
Customers
Competitors
Distributors Suppliers
Market Size Product Price Development Time & Costs Manufacturing Costs Rate of Return
2. Concept Testing - Test the Product Concepts with Groups of Target Customers
Profits Time
Product Development
Losses/ Investments ($)
Introduction
Growth
Maturity
Decline
Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Build selective distribution Build product awareness among early adopters and dealers
Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market Build intensive distribution Build awareness and interest in the mass market
Peak sales Low cost per customer High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Build more intensive distribution Stress brand differences and benefits
Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers
CHAPTER NINETEEN
Scanner systems allow for immediate collection of product sales data. Mathematical sales forecasting models are readily available that can run on a relatively limited amount of data. We are building quality in, testing the marketing components of the product at early stages (ads, selling visuals, service contracts, package designs, etc.) rather than testing the whole product at the end. Increased competition puts greater pressure on managers to accelerate product cycle time. Market testing is a team issue, not solely the responsibility of the market
research department.
High
Solid forecasts of dollar and unit sales volume. Diagnostic information to allow for revising and refining any aspect of the launch.
Any special twists on the launch? (limited time or budget, need to make high volume quickly) What information is needed? (expected sales volumes, unknowns in manufacturing process, etc.) Costs (direct cost of test, cost of launch, lost revenue that an immediate national launch would have brought) Nature of marketplace (competitive retaliation, customer demand) Capability of testing methodologies (do they fit the managerial situation at hand)
Speculative Sale
Often used in business-to-business and consumer durables, similar to concept and product use tests. Give full pitch on product, answer questions, discuss pricing, and ask:
If we make this product available as I have described it, would you buy it?
Create a false buying situation and observe what the customer does. Follow-up with customer later to assess likely repeat sales. Often used for consumer nondurables.
Mall intercept. Self-administered questionnaire. Advertising stimuli. Mini-store shopping experience. Post-exposure questionnaire. Receive trial package. Phone followup and offer to buy more.