Marketing task and New Product Development Process & The Product Life Cycle (PLC) and marketing Strategies at different stage

8/3/2019 Marketing task and New Product Development Process & The Product Life Cycle (PLC) and marketing Strategies at

1/10

FACULTY OF BUSINESS

Assignment

OnMarketing task and New Product Development Process

&

The Product Life Cycle (PLC) and marketing Strategies at different stage

SUBMITTED TO:

Nura alam siddiki

Lecturer of ASA University BangladeshFaculty of Business

SUBMITTED BY:

Md.Shariful IslamID:091-12-0183

Department of BBA

Section : 6F

Date of Submission: 07th

Dec2011


2/10

Marketing management task:

Developing marketing strategies and plans

The first task facing Atlas is to identify its potential long-run opportunities given its market

experience and core competencies. Atlas can design its cameras with better features. It can alsoconsidering a line of video cameras or it can use its core competency in optics to design a line ofbinoculars and telescopes. Whichever direction it chooses, it must develop concrete market plans

that specify the marketing strategy and tactics going forward.

Capturing marketing insights

To understand what is happening inside and outside company, Atlas needs a reliable marketing

information system; it will want to closely motor its marketing environment.

Atlas's microenvironment consists of all the players 10 affect the company's ability to produce

and sell cameras-suppliers, marketing inter diaries, customers, and competitors. Its macro

environment consists of demographic, economic, physical, technological, political-legal, andsocial-cultural forces that affect sales and profits. Atlas also needs a dependable marketing

research system. Marketing research is an indispensable tool for assessing buyer wants andbehavior and actual and potential market size. An important part of gathering environmental

information includes measuring market potential and forecasting future demand. To transform

marketing strategy into market: programs marketing managers must make basic decisions onmarketing expenditures, marketing activities, and marketing allocation. How many dollars

should support Atlas's or three camera lines? Direct versus distributor sales? Direct-mail

advertising versus trade-magazine advertising? East Coast markets versus West Coast markets?

To make these allocations, marketing managers may use sales-response functions that show howsales d profits would be affected by the amount of money spent in each application.

Connecting with customers

Atlas must consider how to best create value for its chosen target markets and develop strong,

profitable, long-term relationships with customers. To do so, Atlas needs to understand consumer

markets. How many households plan to buy cameras? Who buys and why do they buy? What are

they looking for in the way of features and prices? Where do they shop? What are their images:

different brands? How does the digital segment differ from the 35 mm segment? Atlas also sells

cameras to business markets, including large corporations, professional firms, retailers, and

government agencies. Purchasing agents or buying committees make the decisions. Atlas needs

to gain a full understanding of how organizational buyers buy. It needs a sales force that is well

trained in presenting product benefits. Atlas will not want to market to all possible customers.

Modern marketing practice calls for dividing the market into major market segments, evaluating

each segment, and targeting those market segments that the company can best serve.


3/10

Building Strong Brands

Atlas must understand the strengths and weaknesses of the Zeus brand with customers. Is it so

strongly associated with certain technologies that it could not be used to brand new products in

related categories? Is its 35 mm film heritage a detriment in the digital camera market? Suppose

Atlas decides to focus on the consumer market and develop a positioning strategy. Should Atlasposition its cameras as the "Cadillac" brand, offering superior cameras at a premium price with

excellent service and strong advertising? Should it build a simple, low-priced camera aimed at

more price-conscious consumers? Should it develop a medium-quality, medium priced camera?

After launch the product's strategy will need modification at the different stages in the product

life cycle: introduction, growth, maturity, and decline. Furthermore, strategy choice will depend

on whether the firm is a market leader, challenger, follower, or nicer. Atlas must also pay close

attention to competitors, anticipating its competitors' moves and knowing how to react quickly

and decisively. It may want to initiate some surprise moves, in which case it needs to anticipate

how its competitors will respond

New Product Development Process

In business new product development (NPD) is the term used to describe the complete process

of bringing a new product to market. A product is a set of benefits offered for exchange and canbe tangible (that is, something physical you can touch) or intangible (like a service, experience,

or belief). There are two parallel paths involved in the NPD process: one involves the idea

generation, product design and detail engineering; the other involves market research andmarketing analysis. Companies typically see new product development as the first stage in

generating and commercializing new products within the overall strategic process of product life

cycle management used to maintain or grow their market share. .

The process

Idea Generation is often called the "fuzzy front end" of the NPD process Ideas for new products

can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses,

Opportunities & Threats), Market and consumer trends, company's R&D department,competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic

discovery methods (searching for user patterns and habits) may also be used to get an insight into

new product lines or product features

Lots of ideas are being generated about the new product. Out of these ideas many ideas are being

implemented. The ideas use to generate in many forms and their generating places are also

various. Many reasons are responsible for generation of an idea.

Idea Generation or Brainstorming of new product, service, or store concepts - idea generationtechniques can begin when you have done your opportunity analysis to support your ideas in the

Idea Screening Phase.
http://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Product_%28business%29http://en.wikipedia.org/wiki/Product_designhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_life_cycle_managementhttp://en.wikipedia.org/wiki/Product_life_cycle_managementhttp://en.wikipedia.org/wiki/SWOT_analysishttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/SWOT_analysishttp://en.wikipedia.org/wiki/Product_life_cycle_managementhttp://en.wikipedia.org/wiki/Product_life_cycle_managementhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_designhttp://en.wikipedia.org/wiki/Product_%28business%29http://en.wikipedia.org/wiki/Business


4/10

Idea Screening

The object is to eliminate unsound concepts prior to devoting resources to them.

The screeners should ask several questions:

Will the customer in the target market benefit from the product? What is the size and growth forecasts of the market segment/target What is the current or expected competitive pressure for the product idea? What are the industry sales and market trends the product idea is based on? Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the

target price?

Concept Development and Testing

Develop the marketing and details who is the target market and who is the decisionmaker in the purchasing process?

What product features must the product incorporate? What benefits will the product provide? How will consumers react to the product? How will the product be produced most cost effectively? Prove feasibility through virtual computer aided rendering, and rapid prototyping What will it cost to produce it? Investigate intellectual property issues and search patent data bases. Testing the Concept by asking a sample of prospective customers what they think of the

idea. Usually via Choice Modeling.

Business Analysis

Estimate likely selling price based upon competition and customer feedback Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock

equation

Estimate profitability and break-even pointBeta Testing and Market Testing

Produce a physical prototype or mock-up

Test the product (and its packaging) in typical usage situations Conduct focus group customer interviews or introduce at trade show Make adjustments where necessary Produce an initial run of the product and sell it in a test market area to determine

customer acceptance
http://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Concept_testinghttp://en.wikipedia.org/wiki/Choice_Modellinghttp://en.wikipedia.org/wiki/Fourt-Woodlock_equationhttp://en.wikipedia.org/wiki/Fourt-Woodlock_equationhttp://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Fourt-Woodlock_equationhttp://en.wikipedia.org/wiki/Fourt-Woodlock_equationhttp://en.wikipedia.org/wiki/Choice_Modellinghttp://en.wikipedia.org/wiki/Concept_testinghttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Target_market


5/10

Technical Implementation

New program initiation Finalize Quality management system Resource estimation

Requirement publication Publish technical communications such as data sheets Department scheduling Supplier collaboration Logistics plan Resource plan publication Program review and monitoring Contingencies - what-if planning

Commercialization (often considered post-NPD)

Launch the product Produce and place advertisements and other promotions

Fill the distribution pipeline with product Critical path analysis is most useful at this stage

New Product Pricing

Impact of new product on the entire product portfolio Value Analysis (internal & external) Competition and alternative competitive technologies Differing value segments (price, value, and need)

Product Costs (fixed & variable) Forecast of unit volumes, revenue, and profit

These steps may be iterated as needed. Some steps may be eliminated. To reduce the time thatthe NPD process takes, many companies are completing several steps at the same time (referred

to as current time to market). Most industry leaders see new product development as a proactive

process where resources are allocated to identify market changes and seize upon new product

opportunities before they occur (in contrast to a reactive strategy in which nothing is done untilproblems occur or the competitor introduces an innovation). Many industry leaders see new

product development as an ongoing process (referred to as continuous development) in which the

entire organization is always looking for opportunities.

For the more innovative products indicated on the diagram above, great amounts of uncertainty

and change may exist, which makes it difficult or impossible to plan the complete project before

starting it. In this case, a more flexible approach may be advisable.

Because the NPD process typically requires marketing expertise, cross-functional teams are acommon way of organizing projects. The team is responsible for all aspects of the project, from
http://en.wikipedia.org/wiki/Quality_management_systemhttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Technical_communicationhttp://en.wikipedia.org/wiki/Data_sheethttp://en.wikipedia.org/wiki/Logisticshttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Promotion_%28marketing%29http://en.wikipedia.org/wiki/Distribution_%28business%29http://en.wikipedia.org/wiki/Critical_path_analysishttp://en.wikipedia.org/wiki/Time_to_markethttp://en.wikipedia.org/wiki/Flexible_product_developmenthttp://en.wikipedia.org/wiki/Cross-functional_teamhttp://en.wikipedia.org/wiki/Cross-functional_teamhttp://en.wikipedia.org/wiki/Flexible_product_developmenthttp://en.wikipedia.org/wiki/Time_to_markethttp://en.wikipedia.org/wiki/Critical_path_analysishttp://en.wikipedia.org/wiki/Distribution_%28business%29http://en.wikipedia.org/wiki/Promotion_%28marketing%29http://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Logisticshttp://en.wikipedia.org/wiki/Data_sheethttp://en.wikipedia.org/wiki/Technical_communicationhttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Quality_management_system


6/10

initial idea generation to final commercialization, and they usually report to senior management

(often to a vice president or Program Manager). In those industries where products aretechnically complex, development research is typically expensive, and product life cycles are

relatively short, strategic alliances among several organizations helps to spread the costs, provide

access to a wider skill set, and speeds the overall process.

Also, notice that because marketing expertise are usually both critical to the process, choosing an

appropriate blend of the two is important. People respond to new products in different ways. Theadoption of a new technology can be analyzed using a variety of diffusion theories such as the

Diffusion of innovations theory.

A new product pricing process is important to reduce risk and increase confidence in the pricing

and marketing decisions to be made. Bernstein and Macias describe an integrated process that

breaks down the complex task of new product pricing into manageable elements.

Product development the Coca-Cola

In packaging innovation, for example, the key word is on the go consumption (re -sealable

canned drinks). In retail, the POP-cooler solutions are a recent innovation. In its product

development process, the CCC utilizes the so-called stage-gate model. A stage is a period ofwork and a gate is the decision-making point. Each stage is followed by a gate. The gate closes

or opens, allowing the project to move into the next stage. The gates are also quality control

points in the process. The options available at a gate are as follows:

returning to the same stage (improvement);

termination (if the gate keepers fail to make a decision);

suspension; proceeding (positive decision).

The key elements of the stage-gate model are:

The idea, scoping (consideration of technology and market trends, assessment ofcompetition and consumer needs, consumer recommendations, brainstorming)

Building a business case (technical feasibility, risk analysis, investment plan, brandalternatives, communication alternatives);

Development (technical solutions, supply chain plan, investment prospects, surveyingconsumer use and perception of the product, quantitative testing of consumers; brand

name)

Preparations for launch (commercial solutions, supply chain capacity, pricing, productdesign, communication plan for consumers, sales plan)

Marketing activities (market supply, quality assurance, preparation of sales anddistribution plans, sales promotion, samples, advertising, monitoring awareness; testing,

use)
http://en.wikipedia.org/wiki/Diffusion_%28business%29http://en.wikipedia.org/wiki/Diffusion_of_innovationshttp://en.wikipedia.org/wiki/Diffusion_of_innovationshttp://en.wikipedia.org/wiki/Diffusion_%28business%29


7/10

The task of the CCC is to manage the team in working towards the project goals, plan the

activities within a stage together with the team, and monitor its implementation; hold meetings

before the gate discussions; ensure that all work is completed beforethe gate. The final partof the project managers important job is to present the project to the gate keepers and jointly

analyze the results and assess risks and problems. CCC provided a real-life example of the

product development process.

Stage 1: Idea

The consumption of coffee is increasing around the world on all levels (at home as well as

outside the home). Due to the constant increase in the consumption of coffee drinks, the CCCdecided to enter this market as well.

Stage 2: Building the business case

The company identified the competing products in the past and at present. It also researched the

potential positioning of its product, by mapping all the similar products on local and regionalmarkets as well as throughout the world. It was discovered that there is a niche on the global

level in the premium product segment. Next, the company went into partnership with the Italian

coffee producer Illy.

Stage 3: Development

Key product Illy ready-to-drink coffee (contains 4.5% coffee extract); at first, black ready-to

drink coffee is launched on each marketwithout preservatives and without milk; target: 26% of

the total volume. Other product variants 2% coffee extract; 35% fresh milk. At least onevariant promoted upon launch in each market; target: 74% of the total volume.

Stage 4: Preparations for launch

Creating a legal entity for the partnership (joint venture), Illycaffe sets up the production ofcoffee extract. Development of supply (finding ingredient suppliers, finding a fresh milk

provider; quality audits; preparation of quality documentation; contract negotiations; product

testing). Development of packaging (a separate project following the stage-gate model; creationof the design) Sourcing of ingredients (pre-supply quality control). First commercial production

under supervision.

Stage 5: Marketing activities

Ensuring the best exposure (focus on the most important exposure; the target channels of key

opinion leaders and early adopters). Greater focus on availability at the right (retail) outletsParallel home use promotion in supermarkets, Penetration of high quality stores (establishing an

image of success not sold at the cheap chains, but sold everywhere else A fair margin for

partners to promote the product; At the moment, the product is sold in 18 countries.


8/10

The Product Life Cycle (PLC) and marketing Strategies at different stages:

Advertising strategies change with the change in stages of a product life. i.e. PLC This article

focuses on changes in way of advertising whenPLC stages changes.

Every product goes through a series of stages, namely the introduction, growth, maturity,decline. After a period of development it is introduced or launched into the market; it gains more

and more customers as it grows; eventually the market stabilizes and the product becomes

mature; then after a period of time the product is overtaken by development and the introduction

of superior competitors, it goes into decline and is eventually withdrawn. However, most

products fail in the introduction phase. Others have very cyclical maturity phases where declines

see the product promoted to regain customers. Thus in this case, a suitable advertising and

promotion campaign is required to be identified and followed.

Figure: Product Life Cycle
http://drypen.in/advertising/the-product-life-cycle-plc-and-strategies-at-different-stages.htmlhttp://drypen.in/advertising/the-product-life-cycle-plc-and-strategies-at-different-stages.html


9/10

Strategies for the differing stages of the PLC:

Introduction stage of PLC

The need for immediate profit is not a pressure. The product is promoted to create awareness . Ifthe product has no or few competitors, a skimming price strategy is employed. Limited numbers

of product are available in few channels of distribution. Advertising differentiates the product.

Growth stage of PLC

Competitors are attracted into the market with very similar offerings. Products become more

profitable and companies form alliances, joint ventures and take each other over. Advertising

spend is high and focuses upon building brand.Market sharetends to stabilize. Advertising

establishes participation with the marketplace.

Maturity stage of PLC

Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a

decreasing rate and then stabilize. Producers attempt to differentiate products and brands are key

to this. Price wars and intense competition occur. At this point the market reaches saturation.

Producers begin to leave the market due to poor margins. Promotion becomes more widespread

and use a greater variety of media. Advertising puts price ahead of the competition.

Decline stage of PLC

At this point there is a downturn in the market. For example more innovative products are

introduced or consumer tastes have changed. There is intense price-cutting and many more

products are withdrawn from the market. Profits can be improved by reducing marketing spend

and cost cutting. Defensive advertising or for revitalization.


10/10

Documents

Marketing task and New Product Development Process & The Product Life Cycle (PLC) and marketing Strategies at different stage