BUS M300 1st Edition Final Exam Study Guide Lectures 15 23 Lecture 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 one From a customer s perspective what is a new product The degree of learning required in order to use the product properly What 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 Discontinuous Which new product categories offer the greatest potential return on investment Discontinuous Which new product categories offer the least potential return on investment Continuous Which new product category presents the greatest risk and why Discontinuous Because it s a new category Which product category is the most common Why Continuous Because it s less risky About 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 execution Why 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 products What 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 Commercialization In Idea Generation the idea is that many good ideas come from consumers In this step what needs to be 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 strategy During 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 up What is Commercialization The development of distribution channels chosen promotion pricing sales force and so on At this stage 4 P s need to be implemented The 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 rep What 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 of marketers entire job What 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 critical Why is social media popular Cheap Immediate feedback Network effect Happening anyway don t be road kill What are the downsides to social media Brand image liability Might not target your age group Waste of resources How can social media build a brand Focuses on specific attributes of brand To diffuse problems Drive awareness Provide info Positive associations through word of mouth Lecture 18 19 4 2 7 What is Promotion The process of communicating product and service information to target customers and other stakeholders of the firm What are the parts of the Hierarchy of Effects model 1 Awareness 2 Familiarity 3 Consideration 4 Purchase 5 Satisfaction 6 Loyal Repeat Purchase Which of these steps are most closely linked to informing customer about product Awareness Which step is most linked to actual customer behavior Purchase Repeat purchase Who are the 2 types of promotion Consumer Directed o Money off promotions coupons buyer programs