Central question for marketers is “How do consumers respond to various marketing efforts the company might use.Culture: is the most basic cause of a person’s wants and behaviors. (learned from family, school, peers) : includes basic values, perceptions, wants and behaviorsSubculture: group of people with shared value systems based on common life experiences: Major groups (Hispanic, mature consumers, African-american)Social class: example of cultureSocial: Memberships, references, and aspiration groups. Groups: Membership, Reference (Opinion leaders generate buzz), AspirationalFamily: most important consumer buying organizationRoles and status: Role is expected activities, status=esteem given to role by society Personal Factors:Age and life-cycle stage: People change the goods they buy over lifetime, 3 Topics: Segmentation, targeting, positioning are the most important topics that marketers deal with. Answers who are customers: drives everythingCh. 8:New Product Development: The development of original products, product improvements, product modifications, and new brands through the firm’s own productdevelopment efforts.-Through acquisition or new product development (expensive/risky)-70-90% new development fail because:Overestimation of market sizeDesign ProblemsIncorrectly positioned, priced, or advertisedPushed despite poor marketing research findingsExcessive development costsCompetitive reaction(Example: Xerox Star Workspace, Sony Walkman: exception to rule)Steps: New Product Development Process1. Idea Generation2. Idea Screening: (Process used to spot good ideas and drop poor ones/ evaluated against a set of company criteria for new products)3. Concept Development and testing:a. Product idea: b. Product concept: Detailed version of the new productc. Concept testing: Testing new product concepts with groups of target consumers to find if they have strong consumer appeal4. Marketing Strategy Development:a. Part 1: describe target market, planned value proposition, sales, market share, and profit goalsb. Part 2: Outlines the product’s planned price, distribution, and marketing budgetc. Part 3: Describes planned long run sales and profit goals, mixed marketing strategy5. Business Analysis: review of the sales, costs and profit projections to assess fit with company objectives. 6. Product Development: develops concept into physical product, large jump in investment, protoypes made, tested7. Test Marketing: (virtual test marketing: Decision Insight (Frito Lay: Online virtual store) Not needed for all products can be expensive, but cheaper than making major mistake8. Commercialization: Must decide on timing, where to introduce the product (single location, state) Must develop market rollout planIdea generation: (Internal sources): Company employees at all levelsExternal Sources: Customers, competitors, distributors, suppliers, outsourcingTeam Based new product development: various company departments work closely together, overlapping steps to save time and increase effectivenessSystematic new product development: Innovation management systems collect, review, evaluate and manage ideasProduct Life Cycle:Product classes have longest life cycleProduct forms: tend to have the standard PLCBrand: PLCs can change quickly because of changing competitive attacks and responsesPLC concept can be applied to styles, fashions, fads (ex. Station wagon decline)It is difficult to identify the current stage of a products PLC, pinpoint when the product moves to the next stage, identify factors that affect products movement through stages, forecast sales level, length of each stage, and shape of PLC, develop marketing strategy as strategy is both a cause and result of the PLCStrategies used to manage PLC during maturity:Modify the market: Increase the consumption of the current product (look for new users, reposition the brand to appeal to larger segments, increase usage of present customers)Modify the product: Change characteristics like quality, features, styleModify the marketing mix: Cut prices, implement promotions, launch betterad campaign, move to larger market