Marketing Exam 3 Notes Lecture 12 1 12 2 New Product Development New Products o Cars that can fly available sometime soon o Hybrid vehicle ATV Jet Ski Combination o Ski Goggles that have computer screen and phone on inside o Bendy TV with new pixel technology o Companies that have come up with other products and failed BIC underwear Colgate frozen dinners Starburst yogurt Pepsi made clear uncaffeinated cola New to the market products o Kits to change jeep into water vehicle o Car that is also underwater submarine Scuba Car But not water proof people get wet The Next Generation o Corning the future of glass A day in glass includes interactive TV screens on almost every surface of the house and windows 80 of new products FAIL in the market New Product Predictions o People are generally overall bad at this no matter how smart or successful Predicted telephones and computers would have no value Yale professor told founder of FedEx that the idea wasn t feasible and Two Goals for NPD would never be successful o Understanding New Product Development from the Firm s Perspective o 7 Steps to Develop New Products don t need to memorize these 1 Idea Generation 2 Idea Screening 3 Concept Testing 4 Business Analysis 5 Development of Physical Product 6 Beta and Market Testing 7 Product Launch o One Stop Shopping Nielsen BASES products Market research company focusing on television Help companies screen new products that they develop using a variety of products to consult with them Like Price advisors Product Advisors Price advisor etc Neurofocus The buying brain o Helps companies understand how the customers are thinking o Idea Generation o Uses medical devices to monitor brain waves and detect how consumers really feel about products and advertising without actually having to ask them and introduce bias Crowdsourcing when companies put out various iterations of product flavors and tell consumers to vote on what they like best o Coca Cola does a similar thing where they have data for how people mix their drinks using the smart machines in restaurants to see the most common combinations o Mountain dew flavors o Lays chips Cappuccino chicken and waffles o Crowdsourcing Fails People came up with funny variations of their own Bird robot engineering and marketing go together Product Innovation Idea Screening Shark tank show Concept Testing Business Analysis Have test group of consumers come sample products How much will it cost How much will consumers pay for it Test Markets places like Jacksonville with varied demographics NOT Tallahassee Richmond is an ideal place to test out products Test Market Products comes with a lot of risk cost o Bacon Sunday from BK o McDonald s Spaghetti o Bacon Milkshake o Tobacco lozenges 20 of the nicotine of a cigarette in response to second hand smoke bans Product Launch Sunchips compostable bag ecofriendly and everyone loved the idea but in practice consumers found the bag to be extremely loud and no one wanted to use it o Understanding New Product Adoption from the Customer s Perspective Product Adoption Process Awareness buyer becomes aware of product Evaluation buyer considers product s benefits and decides Interest buyer seeks info wants to learn about product whether to try it Trial buyer examines tests or tries the product to see if it meets their needs Adoption buyer purchases the product and is expected to use it again whenever the need for this general type of product arises New Product Adoption Innovators first to adapt 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 new product Lecture 5 1 5 2 Market Research What is marketing research o process of designing gathering analyzing and reporting information that may be used to solve a marketing problem o Examples Product Development Pricing Studies Customer Satisfaction Assessments Distribution Analysis Promotion Effectiveness Studies o Product Development Which sector is most involved in purchasing a product what things do they look for in choosing products o Pricing Strategy Which prices give consumers most value for their money o Customer Satisfaction Most extensive research done on what consumers think Waiting time at restaurant actually perceived as higher quality Disney does lots of research about waiting times Where did it come from o 1980s TQM Movement Deming Juran total quality management how to run a better business Placed customer at the center of the business Customer Orientation Research to find customer reaction to product Research to compare product to competitors Research to find problems with product Why is it important o It gives managers answers to important questions if decrease customer defection by 5 you can increase profits by 25 100 one unhappy customer tells 9 12 others it s five times as costly to attract new customers than it is to retain old ones on average U S firms lose half of their customers every five years where do people walk through most in a store o It s the foundation for marketing strategy decisions Cluster analysis statistical analysis technique that identifies customer segments Groups of customers that have similar characteristics Measures things like price sensitivity and importance of quality and on time delivery What types are there specific company phenomena o Applied Research research designed to solve a specific problem usually for a o Basic Research research designed to extend knowledge of marketing Have you ever had a bad experience and not complained about it If not why McDonald s receives 2 200 complaints a day Only 33 of the daily service complaints are addressed 70 of those are service related Real problem is what if 1 890 only represents 5 of the Consumers don t complain mostly because they don t think management dissatisfying experiences will care or do anything about it Marketing Research Process o 1 Problem definition A problem well defined is half solved Exploratory research qualitative research helps in problem solving as it allows the researcher to better define the problem by getting a look at it first hand The hardest step in the process Manager interviews Expert interviews Data o Primary information that has been gathered specifically for the research objectives at hand Gathered by you not other people o Secondary information that has been collected for a purpose
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