MBA Semester 2 MB0046 Marketing Management ASSIGNMENT- Set 1 Q.

.1 Explain the various stages involved in new product development New Product Development

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New products are essential for existing firms to keep the momentum and for new firms they provide the differentiation. New product doesnt mean that it is absolutely new to the world. It may be a modification, or offered in a new market, or differentiated from existing products. Therefore it is necessary to understand the concept of new products. Meaning of New Products: a. They are really innovative. For example, Googles Orkut, a networking site which revolutionized social networking. In this site people can meet like-minded people; they can form their own groups, share photos, comments and many more. b. They are very different from the others: Haier launches path-breaking 4-Door Refrigerators first time in India c. They are imitative; these products are not new to the market but new to the company. For example, Cavin Kare launched Ruchi pickles. This product is new to Cavin Kare but not to the market. New product development process: Stage 1 - Idea generation: New product idea can be generated either from the internal sources or external sources. The internal sources include employees of the organization and data collected from the market. The external source includes customers, competitors and supply chain members. For example, Ingersoll Rand welcomes new ideas from the General public. Stage 2-Idea screening: Organization may have various ideas but it should find out which of these ideas can be translated into concepts. In an interview to Times of India, Mr. Ratan Tata, chairman TATA group discussed how his idea saw many changes from the basic version. He told that he wanted to develop car with scooter engine, plastic doors etc But when he unveiled the car, there were many changes in the product. This shows that initial idea will be changed on the basis of market requirements. Stage 3 - Concept development: the main feature or the specific desire that it caters to or the basic appeal of the product is created or designed in the concept development. Concepts used for Tata Nano car are

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Concept I: Low-end rural car, probably without doors or windows and with plastic curtains that rolled down, a four-wheel version of the auto-rickshaw Concept II: A car made by engineering plastics and new materials, and using new technology like aerospace adhesives instead of welding. Concept III: Indigenous, in-house car which meets all the environment standards Stage 4 - Concept testing: At this stage concept is tested with the group of target customers. If any changes are required in the concept or the message it will be done during this stage. Also the effectiveness is tested on a minor scale. If the concept meets the specific requirements, then it will be accepted. Stage 5 Marketing strategy development: The marketing strategy development involves three parts. The first part focuses on target market, sales, market share and profit goals. TATAs initial business plan consisted sales of 2 lakhs cars per annum. The second part involves product price, distribution and marketing budget strategies. TATAs fixed Rs 1 lakhs as the car price, and finding self employed persons who work like agent to distribute the cars. The final part contains marketing mix strategy and profit goals. Stage 6 - Business analysis: it is the analysis of sales, costs and profits estimated for a new product and to find out whether these align with the company mission and objectives. Stage 7 - Product development: during this stage, product is made to undergo further improvements, new features or improvised versions are added to the product. There is also scope for innovation and using the latest technology into the product. TATA Nano car development (Source: business world nanolution) Tried to outsource the product from all over the world. Development of mule or prototype with 20bhp. Designing the small engine Thermodynamic simulations and final engine Development of MPFI with help of Bosch. Cost reduction and negotiating with vendors. Sona Koyo and Rane Group came up with hollow steering shafts, saving cost and cutting weight. Sharda Motors and Emcon designed the exhaust system and MRF tweaked the tyres to bear extra weight on rear wheels. Stage 8 - Test marketing: is the most crucial stage for the testing products performance and its future in the market. There are certain cases where product has failed in the test marketing and had to be withdrawn. The product is introduced into the realistic market The 4Ps of marketing are tested. The cost of test marketing varies with the type of product.
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Stage 9 - Commercialization: In this stage product is completely placed in the open market and aggressive communication program accompanied with promotion activities is carried out to support it.

Q.2 Discuss the importance of SWOT analysis to develop effective marketing mix. Developing an effective marketing mix: Following example shows how Big Bazaar has worked out on its marketing mix in India after doing a SWOT analysis: SWOT analysis indicates the 4 specific and crucial areas by which an organization can know its position in the market. SWOT analysis can be done by any kind of organization, dealing with any kind of products or services, at any point of time and whenever it feels the need to do so. SWOT analysis is an analysis showing the Companys a) Strengths i.e. areas where it has got advantage, its core processes, its unique or successful brands, key people etc. If the company has a good reputation in the consumer market then it becomes strength of that company. b) Weaknesses i.e. areas where the company is weak or having drawbacks and which needs to be improvised or eliminated from the existing system. If the company is feeling that its sales force has too many inefficient people then it becomes the weakness of the company. c) Opportunities i.e. areas where company can establish itself and the challenges that it can accept to its benefit as well as the consumers. Suppose a company knows that there are consumers all over the world who consume companys products then there presents opportunity of expanding its activities globally. d) Threats i.e. areas where the company feels that it might be subject to pressure situations or where it is unable to pull itself from a possible crises or the threat may simply come from competitive forces or other external factors such as Recession.

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