MM555

Module 6 Product Development

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Source: http://www.forbes.com/sites/sap/2012/12/03/6-stepsto-executing-a-content-strategy/

Session Outline
Welcome Review of Module 5 Internal Classes - Activity Digging Deeper Module 6: Products, Brands and New Products Development Break Learning Activity Next Steps Marketing plan group time
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Review Module 5: Learning Objectives

1. Be able to distinguish among the various types of business markets 2. Identify the major characteristics of business customers and transactions 3. Understand several attributes of the demand for business products 4. Become familiar with the major components of a buying centre 5. Understand the stages of the business buying decision process and the factors that affect the process

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In each Module we encourage you to hunt out the latest news; explore the research and scan social media for whats new, whats important and what has piqued your interest on the topic of marketing

In the News; Out of Academia; Around the Grounds

DIGGING DEEPER

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..What Caught Your Eye This Week?

Source: http://thisweekin.com

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Curtin University is a trademark of Curtin University of Technology CRICOS Provider Code 00301J

Curtin University is a trademark of Curtin University of Technology CRICOS Provider Code 00301J

21/02/2013 ABC News

This Weeks Reading. ..Which Ideas Will You Hold Onto?

Luan, Y.J. and K. Sudhir. 2010. Forecasting marketing-mix responsiveness for new products. Marketing Research 47 (3): 444-457. Bryce, D. and J. Dyer. 2007. Strategies to crack well-guarded markets. Harvard Business Review 85 (5): 94-92.

Can you think of some examples of effective strategies in competitive markets?

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Module 6: Learning Objectives

1. Define product and product attributes 2. Outline how an organisation can differentiate its products to obtain a competitive advantage 3. Explain the value of branding brand management 4. Briefly review the concept of the product life cycle & marketing implications 5. Discuss the new-product development process and the major considerations in managing this process

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Customers rarely buy what the business thinks it sells. One reason for this is, of course, that nobody pays for a product. What is paid for is satisfaction.......Drucker (2010)

MODULE 6: PRODUCT
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Marketing Management Framework

Customer
Consider factors such as decision making, values, needs & wants

Company
Or organisation. What is our Strategic Purpose? Capabilities? Weaknesses?

Context
Whats going on in the macro environment?

Competitors Collaborators
Who do we work with? Who are our partners? Who are our current and potential competitors? Where are they placed in the market?

Marketing Objectives Segmentation

Based on geographic, demographic, psychographic and/or behavioural factors

Targeting
Consider strategic fit; potential and defensibility against competition

Differentiation
Differentiating the market offering to create superior customer value

Positioning Analysis & Strategy

Create Value
Marketing is about creating customer value and profitable customer relationships
Product / Service People Processes Physical Evidence

Your place in the market space Core benefit proposition Unique selling proposition Positioning Statement

Planning & Implementation

Capture Value

Communicate Value
Integrated Marketing Communications (including Promotion)

Deliver Value

Price

Placement Logistics

The MM555 Marketing Management Framework draws on a number of sources including Iacobucci Curtin University is a trademark of Curtin University(2013), of Technology CRICOS Codeand 00301J Armstrong et Provider al (2012) Gibbs (2009) and includes the key factors which need to be taken into account when developing a comprehensive marketing strategy.

Implementation, Monitoring & Measuring Outcomes

What is a Product?
A Product Defined
A good, a service, or an idea received in an exchange Can be tangible (good) or intangible (service) or a combination of both products versus services It includes functional, social, and psychological utilities or benefits

A good is a tangible physical entity (or thing)

Laptop, desk, book, vehicle or house

A service is a mostly intangible result of the application of human and mechanical efforts to people or objects
Entertainment, education, medical examinations, real estate or business services

An idea is a concept, philosophy, image, or issue

Political, religious, social or secular activities can all be communicated to try to gain acceptance
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Total product concept

Describes the core product, expected product, augmented product and potential product in order to analyse how the product creates value for the customer.

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Consumer Products
Consumer product categories
Convenience products
Inexpensive and frequently purchased

Shopping products
Buyers willing to expend considerable effort in planning and making the purchase

Specialty products
Possess one or more unique characteristics and buyers are willing to expend considerable effort to obtain them

Unsought products
Purchased when a sudden problem must be solved, customers are unaware of them and do not usually think of purchasing them
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Classifying Products

Convenience product and shopping product An ice cream bar is a convenience product. Hotels are shopping products
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Business Products
Products bought to use in an organisations operations, to resell, or to make other products
Installations - facilities and non-portable equipment Accessory equipment - not part of final product Raw materials - natural materials part of product Component parts - finished items ready for assembly or need little processing Process materials - used in production but not identifiable MRO supplies - maintenance, repair, and operating items not part of final product Business services - intangible products used in operations

Curtin University is a trademark of Curtin University of Technology William Pride, OC Ferrell, Bryan Lukas, Sharon Schembri and Outi CRICOS Provider Code 00301J Niininen 2011 Marketing Principles Asia Pacific Edition Cengage Learning

Classifying Products

Business product Boeing aircraft are products designed for use by business customers
Curtin University is a trademark of Curtin University of Technology William Pride, OC Ferrell, Bryan Lukas, Sharon Schembri and Outi CRICOS Provider Code 00301J Niininen 2011 Marketing Principles Asia Pacific Edition Cengage Learning

Product Line and Product Mix

Product item
A specific version of a product that can be designated as a distinct offering among a firms products

Product line
A group of closely related product items viewed as a unit because of marketing, technical or end-use considerations

Product mix
The total group of products that an organisation makes available to customers

Width of product mix

The number of product lines a company has

Depth of product mix

The average number of different product items offered in each product line
Curtin University is a trademark of Curtin University of Technology William Pride, OC Ferrell, Bryan Lukas, Sharon Schembri and Outi CRICOS Provider Code 00301J Niininen 2011 Marketing Principles Asia Pacific Edition Cengage Learning

The Four Stages of the Product Life Cycle

By understanding the typical life cycle pattern, marketers can maintain profitable product mixes

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Packaging
Involves the development of a container and a graphic design for a product Packaging Functions
Protect the product from damage Offer convenience to consumers Prevent waste and make storage easier Promote the product by communicating its features and uses
Convenience packaging Outback spirit competes by designing packages that are convenient to use, and reusable
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New packaging Altering the package - Cadbury was very successful in changing the Fun Filled Freddo into an Adventure Freddo, with much more economical packaging

Source: The Brand Agency Woodside Internal Marketing Campaign 2013

How to stand stand out from the competition

BRAND STRATEGIES
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Brands are Big Business !

..the combined value of Australias 30 most valuable brands (was) $50.7 billion, a 1% fall from 2011.
BrandFinance Australia Top 30 in 2012

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External Benefits of Building Strong Brands Customer Benefits

Minimal consideration of other brands Brand recommendation More acceptance of new brand services

Refuse substitutes

Request our services and brand

Clarity in external focus & brand execution

Ready to pay a premium price

Revenue increases Cost decreases (Davis & Dunn 2002)

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Internal Benefits of a Strong Brand

Protection against price wars Premium Pricing vs. competitive products

Garner Loyalty Drives profitability Employee pride in service Magnet for recruiting

STRONG Brand
Better leverage with channel partners

more attractive licensing candidate

Clarity in internal focus & brand execution

More attractive to potential co-branding partners

Mitigate brand crisis more effectively

Revenue increases

Greater new product/service success

Cost decreases (Davis & Dunn 2002)

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Creating and Managing Brands

Establish Brand Strategy and Architecture Determine Governance Structure Define the Brands Identity Establish a Distinctive Positioning Align All Touchpoints Measure and Report Progress

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Internal branding comprises activities and processes that help to inform and inspire employees.

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Establish Brand Strategy and Architecture

Single Brand Architecture A Branded House

Multiple Brand Architecture House of Brands

Single Unitary Brand Favoured by decentralised Architecture used to create companies targeting a single powerful image diverse markets.

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Align All Touchpoints

Brand 360

Also consider: Product Experience Policies and Processes HR Practices Crisis Management Corporate Facilities Internal Processes Ensure that all customer touch points are branded (Image Source: redtiemarketing )
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Breaking the Brand Promise

When high value brands fall short of delivering on high expectations They create news of the other sort

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Source: Google Image result for BP logo, 2013

It is not how many ideas you have. Its how many you make happen.
Accenture (2012)

NEW PRODUCT DEVELOPMENT

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Curtin University is a trademark of Curtin University of Technology CRICOS Provider Code 00301J

Larson T 2011 Product Development Research Group Web page http://www.bth.se/ing/pi.nsf/pages/pd Downloaded 18/02/13

Module 6: Learning Objectives Checking In..

1. Define product and product attributes 2. Outline how an organisation can differentiate its products to obtain a competitive advantage 3. Explain the value of branding brand management 4. Briefly review the concept of the product life cycle & marketing implications 5. Discuss the new-product development process and the major considerations in managing this process.

Curtin University is a trademark of Curtin University of Technology CRICOS Provider Code 00301J

15 min Break

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32

Next Steps F2F

Review the Material for Module 7: Services Marketing Be prepared to tell a good/bad service experience story Complete the required reading. Short of time?
Focus

Focus on Ford & Dickson 2012

o Ladhari, R. 2009 "A review of twenty years of SERVQUAL research", International Journal of Quality and Service Sciences, Vol. 1 Iss: 2, pp.172 198 o Grnroos, c. and Ravald, A. 2011 "Service as business logic: implications for value creation and marketing", Journal of Service Management, Vol. 22 Iss: 1, pp.5 22

Case preparation Dont forget to Dig Deeper!

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Next Steps Online

Review the Material for Module 7: Services Marketing Refer to the Weekly Newsletter for areas to Focus on Complete the required reading. Short of time?
Focus

Focus on Ford & Dickson 2012

o Ladhari, R. 2009 "A review of twenty years of SERVQUAL research", International Journal of Quality and Service Sciences, Vol. 1 Iss: 2, pp.172 198 o Grnroos, c. and Ravald, A. 2011 "Service as business logic: implications for value creation and marketing", Journal of Service Management, Vol. 22 Iss: 1, pp.5 22

Dont forget to Dig Deeper!

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