MKT 327 Introduction to Marketing 1st Edition Lecture 16 Innovation ManagementOutline of Last Lecture A. Positioning strategiesI. Strategic directionII. Tactical directionIII. Competitive strategyIV. Framing marketing mixV. InnovationVI. Successful new product developmentOutline of Current Lecture B. Successful new product developmentVII. Management related factor for product successVIII. New player in carbonated soft drink market- JONES SODA IX. Basic product management decisionsCurrent Lecture1) Successful new product developmenta) Depends upon:i) Product related factors(1) Relative advantage(2) Compatibility(3) Satisfaction(4) Product complexity(5) Tiralability(6) Obersvabilityii) Management related factors2) Management related factor for product successa) Effective management of diffusion processi) How long it takes the product to make its way through the product marketb) Ability to manage the adoption of innovationsi) Awareness- knowledgeThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.(1) Interest- persuasion(a) Evaluation-decision(i) Trial-implementation1. Adoption- confirmationc) Major stages in new product development processi) New product strategyii) Idea generationiii) Screeningiv) Business analysisv) Product developmentvi) Test marketing (the strategy)vii) Commercialization3) New player in carbonated soft drink market- JONES SODA a) A ‘new school’ beverage that allows drinker to emotionally express THEIR INDIVIDUALITY b) Segmentation strategyi) Many segmentsii) Segments far apartiii) Limited resourcesiv) Positioned to limited segmentsv) Competition uses differentiated (1) Undifferentiated(2) Differentiated (3) Concentrated(a) Therefore use concentrated (niche) strategyc) Hypothetical positioning map*i) Value proposition(1) A beverage that connects emotionally (captures, embodies lifestyle)(2) Cool for Generation Y- authenticityd) General marketing strategyi) Soft drink= selective demandii) JONES is a new entry (nicher) iii) A few open positionsiv) Opportunity for form utility(1) Therefore must ACQUIRE(2) Using propositioning/ segmentatione) Competitive strategyi) New functional capabilities ii) Improved performanceiii) Tailor productiv) Mass customizationv) Don’t have volume or resources for low cost strategy. Therefore must pursue differentiation.f) Product classificationi) Conscious purchase decisionii) Few comparisonsiii) Bought relatively infrequentlyiv) Specialty productg) Stage in life cyclei) Product has been around a long timeii) Industry is stable and consolidatingiii) Sales and growth rates have leveled off and are declining slightlyiv) Firms are highly profitable(1) Categorize as mature stage4) Basic product management decisionsa) Product objectivesi) Product life cycle signals product objectives ii) Purpose- specifies the most basic direction or focus for a firm’s product or service enabling it to select ‘skeleton’ or ‘starting’ marketing mix strategies.(1) Introduction: develop new product(a) Gain trial(b) Gain distribution(2) Growth(a) Expand features/ apps (b) Extend lifecycle(i) Differentiate/ persuade(ii) Expand distribution(3) Maturity(a) Reposition existing product(b) Build loyalty/ relationships(c) Consolidate value chain(4) Decline(a) Prune product decline(i) Simplify buying/ Communication(ii) Narrow distributionb) Product designi) Purpose- to select and develop the specific collection of core, branded and augmented product or service dimensions that maximize target customers’ satisfaction and achieve selected product positioningii) Value creation(1) Directly impacts form utility by providing those physical product attributes and features that deliver benefits to customers(2) Product dimension(a) Core- basic functions/ benefits (b) Branded- packing, styling, features, quality, brand name (c) Augmented- delivery, additional functions, warranty, terms/ conditions, repair servicec) Category managementd) Brandinge) Packagingf) Customer