BUS-M300 1st EditionFinal Exam Study Guide Lectures: 15-23Lecture 15 (3/24)From a legal/Federal Trade Commission perspective, what is a new product? A new product is limited to 6 months after it enters regular distribution.From a company’s perspective, what is a new product?- Anything different from a previous oneFrom a customer’s perspective, what is a new product?- The degree of learning required in order to use the product properlyWhat is continuous innovation? Give an example.- In continuous innovation, there is no new learning by customers. Examples include new flavors, and new packaging/colors. When using continuous innovation what marketing emphasis do you use?- Build customer awareness using same distribution channels.What is dynamically continuous innovation? Give an example.- Dynamically continuous innovation disrupts customer’s normal buying pattern but little new learning is required. For an example, electric toothbrushes, DVD’s, and synthetic wood.When using dynamically continuous innovation, what marketing emphasis is important?- Promoting points of difference between old and new.What is discontinuous innovation? Give an example.- Discontinuous innovation requires new learning and consumption patterns by customers. For an example, a GPS, hybrid cars, or smartphones.When using discontinuous innovation, what marketing emphasis is important?- Educate customers using promotion, personal selling, and trial. To summarize, what are the three product categories?- 1. Continuous (innovation)- 2. Dynamically Continuous - 3. DiscontinuousWhich new product categories offer the greatest potential return on investment? - DiscontinuousWhich new product categories offer the least potential return on investment?- ContinuousWhich new product category presents the greatest risk, and why?- Discontinuous. - Because it’s a new categoryWhich product category is the most common? Why?- Continuous- Because it’s less riskyAbout 8 out of every 10 products fail. Why? - Lack of competitive advantage/interest- Mismatch product with needs of consumer (poor segmentation strategy/product development issue)- Competition / executionWhy are new products so important to firms?- They create a diversified portfolio.- Enter a new product in the PLC, to create future growth- Buyers pay more for newer productsWhat are the 7 steps in the new product development process? (NPDP)- 1. Idea Generation- 2. Screening- 3. Concept Development and Testing- 4. Rough Marketing Strategy- 5. Development- 6. Test Marketing- 7. CommercializationIn Idea Generation, the idea is that many good ideas come from consumers. In this step, what needs tobe identified?- Researchers need to identify consumer needs. - Instead on focusing on how to improve a product, focus on the product category. In Screening, what is the objective?- To separate ideas from those that have no merit.- Example: Frito-Lay products must be forecasted to make 150-200 million before moving to the next stage. In Concept Development and Testing, what is the objective?- Measurement of consumer attitudes and perceptions relevant to the product- Example: If the price of this product were similar to that of a portable DVD player would you consider buying it?What happens during the Rough Marketing Strategy?- Target market- Price, distribution, promotion, and marketing budget- Announcement of planned sales and profit figures- Illustration of marketing mix strategyDuring Development…- A physical product now exists and company can analyze results.- Tests, revisions, and refinements occur before product is actually test marketed. Test Marketing is what?- The process of generalizing a specific geographical area to the product’s overall target market.- Consumers evaluate and buy without knowing they are participating in the test market.What are the problems with test marketing?- It is expensive/time consuming- Fallible – competitors can disrupt it- Risky – competitors get a heads upWhat is Commercialization?- The development of distribution channels chosen, promotion, pricing, sales force, and so on. - At this stage, 4 P’s need to be implementedThe last step is to measure success. By doing what?- Sales, market share, etc.Lecture 16 (3/26) In the Black and Decker case, what is the main problem? Black and Decker is the #7 brand in the US, but they are severely lacking in market share of the tradesmen category of tools. Makitas have 50% market share in this category, but B&D is equal to Makitas.What is the main problem being caused by?- The brand has a household perception because it is so successful in the consumer segment- Distribution- Color – same color as consumer segment- Name – bad repWhat changes were made?- Decided to change the color of the Tradesmen tools to industrial yellow- High intensity sales plan- Stresses the B&D service plan- Ended up grabbing 60% of market share in 3 years.Lecture 17 (3/31)What are the top questions marketers want answered? How do I measure my ROI? How do I integrate social media into my other media?How much average time do marketers spend on social media? Less than ¼ of marketers entire jobWhat are the objectives of social medias for marketers? Generate exposure for business Increase traffic/subscribers/opt in list Resulted in new business partnerships Help rise in search rankings Generate qualified leads How can we measure the impact of our social media? Degree an duration of contact Awareness (via quizzes/participation) Committeds (such as forwarders, posts)Does social media work better for certain products and services than others? Why? Works better for B2B, small businesses more than big. There is more 1 to 1 selling, high-touch relationship oriented, word of mouth/referral is criticalWhy is social media popular? Cheap Immediate feedback Network effect Happening anyway, don’t be road killWhat are the downsides to social media?- Brand image liability- Might not target your age group- Waste of resourcesHow can social media build a brand?- Focuses on specific attributes of brand- To diffuse problems- Drive awareness- Provide info- Positive associations through word of mouthLecture 18/19 (4/2-7)What is Promotion? The process of communicating product and service information to target customers and other stakeholders of