MAR3023 Exam 2 Mike Brady Developing new products Marketing is really about product Not ads or sales Edison awards Awards were given out to the best new products of 2010 Swiffer came out with a product that is a wireless vacuum cleaner that routinely cleans the floor every so often without having to touch it 80 of new products fail ex starburst came out with berry cr me milk Schema what things are supposed to be When they came out with purple ketchup no one bought it because it wasn t part of their schema 5 Steps Idea Generation 1 Neurofocus how to measure what people are actually thinking without having to ask them because sometimes people think and say different things It measures peoples brain response Neurofocus a Nielson company helps them identify the product that they want to bet on 2 Idea Screening showing a group of experts your invention to see if it would make it in the real world ex doggie air conditioner 3 Concept Analysis test the new product on a small group on consumers to find out who the target market is how much it will cost to produce and how much a consumer will pay for it 4 Beta and Market Testing test on a large market Jacksonville is a good test market because the city represents the US population well Tallahassee is a terrible testing market because they are all college students 5 Product Launch Product Adoption Process Interest buyer seeks information and is receptive to learning about the product 1 Awareness buyer becomes aware of the products 2 3 Evaluation buyer considers products benefits and decides whether to try it 4 Trial buyer examines tests or tries the product to determine if it meets his or her needs 5 Adoption Buyer purchases the product and is expected to use it again whenever the need for this general type of product arises AIDA the process you go through before you buy a product Categories of New Product Adopters Innovators First to adopt new product Early Adopters Choose new products carefully help spread word of mouth Early Majority Adopt just prior to average person Late Majority Skeptics who adopt new products when they feel it is necessary Laggards Last to adopt a new product Different people adopt products differently Managing existing products Products a good a service or an idea received in an exchange 3 types of products 1 Physical Goods a tangible physical entity 2 Services an intangible result of application of human and mechanical efforts to people or objects hybrids Ideas concept philosophy image or issue 3 Core products are the physical or intangible service that the customer receives Branded products are the core products plus the characteristics that allow the consumer to differentiate it from similar products Augmented products have characteristics that enhance value beyond that of the core and branded product Lots of times the things around the product are far more important than the product itself Ex Hotels purpose is to provide shelter When we leave we don t think about the awesome shelter we got we think about the bed the amenities the coffee maker ect Product Life Cycle the progression of a product through four stages 1 introduction 2 growth 3 maturity and 4 decline No profits in introduction state because you have to pay fixed costs Introductory stage risky stage there are high failure rates and negative profits Coke is 1 product diet coke is 2 it just passed Pepsi Alternative life cycles Several kinds of product life cycles are possible High technology products fads and styles or fashions Fads the go up quick and then fall off the edge ex silly bands Extending the Life Cycle Selling to new segments Harley Davidson is now selling to females Stimulate more frequent use Colgate came out with a to go toothbrush anytime anywhere Encourage more use per occasion supersizing fries Promoting more varied use Dryer sheets can be used for repelling gnats by putting them on the back of your hat Product line depth versus product breadth Product line consists of the closely related products marketed by an organization Product Breadth how many different products you have coke has many beverage products In the Excedrin example Novartis Consumer Health markets 40 lines of consumer health products so their breadth score would be 40 Product Depth The number of items in a product line This is just one product DIET coke Many different options of it diet cherry vanilla diet coke with Splenda diet coke with lime In the Excedrin example the Product Depth would be 8 Brand extensions versus product line extensions Brand extension extending into a different product with the same brand Ex Cereal started making cereal bars Starbucks now sells liquors Product line extension When you extend the brand in the same product category Diet coke has done a lot of product LINE extensions cherry coke lime coke Down versus up market extensions Down market extension they offer a cheaper version of one of their products This is dangerous because it s going to bring the brands reputation down Ex Mercedes B class Up Market extension Moving your product upward ex Honda introduced Acura Hershey came out with supreme chocolates Product Modifications Repositioning and Improvements Repositioning Arm and hammer was originally baking soda used for baking but now its repositioned for a fridge freshener Improvements Wendy s introduced natural cut fries Cost reduction changing the ingredients to lower costing ones Ex walnuts now replace pricier pecans in recipes Functional Modifications modifying a product for a specific convince or functional reason ex crystal light on the go packets or Campbell s soup at hand The Power of Branding and Packaging Another way to create a good brand is to create a good brand STORY o Best global brands 1 Coca Cola 2 IBM 3 Microsoft 4 Google 5 General Electric 6 McDonalds o What is a brand A name term design symbol or other feature that identifies the marketer s product as distinct from those of other marketers Brand mark vs trademark Brand Mark the part of a brand that is not made up of words such as a symbol or design can be just as powerful if not more powerful than brands Ex The Nike Swoosh Trademark a legal designation of exclusive use of brand ex Tiffany s color is trademarked not other jewelry store can have the light blue bags You can also trademark a bottle design Coca Cola bottle Levels of brand loyalty Recognition Buyer is aware that a brand exists and considers it as an alternative if the preferred brand unavailable
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