Marketing and Product Development

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 Once the business is underway

development is infrequent

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 Competitive market

a 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

The value equation by providing consumers with

something they did not have before

Types

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

1. material

Utility
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 there are some
consumers

It doesnt want!

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
for a product to give it

A distinct identity

Why?

To keep consumers from confusing it with

competitors

Product Differentiation
includes

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 engage in marketing
activities?

They sell stuff like potatoes, lettuceall the same

Commodity marketing is
usually conducted by:

Marketing boards

Marketing boards try to

Increase the overall consumption of the

commodities

Brand Names

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