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Market research reveals

What consumers want and points towards


opportunities

2 questions before developing


a new product:

1. can we produce it

Production team answers:

1. can we produce it

2. can we sell it

2. costs
For many businesses product
development is infrequent

Once the business is underway

In the case of most successful An ongoing marketing activity


businesses product
development is
Cooperation between
marketing and production is

complex and constant

Feasibility study

To determine if a business opportunity is possible,


practical and viable

Who performs feasibility


studies

All businesses

Invention or Innovation
Product development begins An idea that is based on solving a problem for
with
consumers
Necessity is the mother of invention

Inventions are

New devices, methods or processes developed from


study or experimentation

Businesses use invention to

Create original solutions to consumer needs

Innovation is

A product or service that uses new technology, items, or


process to change:
1. existing products
2. methods used to produce products
3. ways to distribute them

There are many more

Innovators than there are inventors

Most innovations develop as a Competitive market


result of the
Example

Tracking packages for shipping

Stages of Product Development


Inventors tend to

Sell or license their ideas to others who know how to


develop products for the marketplace

Innovators on the other hand marketers


are more likely to be
Stages of product
development

1. idea generation

2. idea screening
3. concept development
4. market strategy
5. feasibility study
6. product design
7. test marketing
8. Market Entry

Prototype

Sample of what the product might look like and operate

Market strategy discovers:

Primary and secondary market

Feasibility is closely tied to


what other stages?

Product design takes into


account the preferences of

1. market strategy
2. product design
Primary market

Test marketing often includes A survey

Product Development and Utility

Utility

What is added to the product to make it valuable on the

market
Utility affects

Types

The value equation by providing consumers with


something they did not have before
1. form
2. information
3. place
4. time
5. possession

Function

What the product is intended to do

Form follows function means: The products looks will be dictated by what its
intended to do
Components of the Form
Utility

1. material
2. scent
3. flavour
4. colour
5. design
6. packaging

Information utility

Provides consumers with instructions, directions,


manuals

Place utility

Makes it possible for consumers to purchase the product

Time utility refers to

Making the product available when consumer needs it

Possession Utility

When they are easy to purchase

How can we increase


possession utility

1. payment plans
2. lower price

.1 - Positioning and Branding

Perception is Reality

Positioning allows us to

Create an image, the outward representation of the person


we want to be

Positioning by others can


lead to

Misunderstandings and limited choices

Marketers too make choices How to position their product or service


about
These choices mean

That the brand will appeal to some people and not to


others

6.2 - Types of Positioning


5 Types of positioning:

1. Benefit
2. target
3. price
4. distribution
5. service

Benefit positioning

Customers want the product they buy: to do something


for them

Often a company will


position its products or
service as being

One that offers consumers more benefits than competitors

Problem with benefit


positioning

Competition can do the same

Price Positioning

Marketer is faced with 2 options when using price for


positioning:
1. cheapest
2. most expensive

If a marketer chooses a price in the middle range, they must use a different positioning
strategy!
A luxury good offers

Status more than quality

Consumers of luxury
products want

The product to be expensive

Examples of luxury items

1. caviar
2. diamond watches
3. expensive ties

Many consumers are willing Quality


to pay high prices for
Manufacturers who use
price positioning with the
promise of quality must

Be sure to provide it

It is possible that if a
The product is of inferior quality.
product boasts the same
features but less expensive

consumers will think


Distribution Positioning

Examples:
1. Avon
2. Amazon

Service Positioning

Examples:
1. convenience stores
2. free installation

Ikea uses price and service Low price, less service because products not assembled
in combination.

6.3 How to Position a Product


The initial positioning
premise

Marketers have to be prepared to alienate some consumers

Businesses may decide that It doesnt want!


there are some consumers
Some companies try to be Examples:
all things to all consumers
1. nike
2. apple
3. Car manufacturers
Clear and coherent
positioning

If consumers dont know: they wont go!

A company that does not


position its product in a
distinctive manner will
discover

Consumers have no reason to choose it over a competitors

6.4 Branding
Business creates a brand forA distinct identity
a product to give it
Why?

Product Differentiation
includes

To keep consumers from confusing it with


competitors
1. branding
2. advertising
3. positioning

A brand consists of
Includes:

All the features that make up the products image


1. name
2. logo
3. slogan

Commodities

Unbranded products

Why dont farmers need to They sell stuff like potatoes, lettuceall the same
engage in marketing
activities?
Commodity marketing is
usually conducted by:

Marketing boards

Marketing boards try to


Brand Names

Increase the overall consumption of the commodities


1. corporate dominant
2. product dominant

Corporate dominant

Examples:
1. Roots
2. Mastercraft
3. Presidents Choice
4. Kelloggs
5. Nike

Product Dominant

Examples:
1. Zest
2. Kodiak
3. Luvs

Logo
Includes:

Symbolic ways to create a brand


1. trademarks
2. trade names
3. brand marks
4. logotypes
5. symbols

3 types of logos:

1. monogrammatic
Example:

2. Visual Symbols
Example:
3. Abstract Symbols
Example:
Slogans

Short catchy phrase that is always attached to the


companys name and logo

How many words should a 7


slogan have?

Brand Strategies

Brand Strategies

1. Support
2. Develop Extension
3. license
4. co-brand
5. acquire

Once a brand has been reposition


positioned it is very hard
to
When is it feasible to
change?

Introducing into foreign market

Brand Extension

Capitalize on other brands success

Examples:

1. coke/diet coke
2. Humpty Dumpty chips/Cheezys
3. Nike apparel/golf clubs

Licensing: similar to

Brand extension but for a fee license to other


companies

Famous people even


license

Themselves

Co-Branding: when two Or more brands combine


Acquisition of a
successful brand

If you cant beat em, buy em!

Branding for International Markets

The Internet connects


3 choices when going
international:

Consumers and businesses around the globe


1. leveraging positive reputation and use the same
brand identification
2. rename to reflect local culture and market
preferences
3. acquire local brand

Factors when choosing:


1. Centralized or not? If centralized, stay the same

Glocal means:

Thinking global but acting local

2. Expansion Strategy If wants to go global, build on original, but if wants


limited trade, acquire or rename
3. Corporate Identity

Strong international identity would lead to keeping it,


otherwise change or merge

4. Similarity of
Products

If the product mix is narrow it is easier to push it into


foreign markets

5. Similarity of marketsThe more similar the market is to your own the easier
it is to push the same product
6. Competition in
foreign markets

Joint ventures or buyouts best if heavy competition


exists

7. Cultural
Associations

If bad blood exists, use different brand or


acquire/merge

8. Changing Dynamics Brand can be local one day and international the next