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1. New product options:
New-product development shapes the companys future. Improved or replacement
products and services can maintain or build sales; new-to-the-world products and services
can transform industries and companies and change lives. But the low success rate of new
products and services points to the many challenges they face.

2. Types of new products:

New to the world.

New product lines.
Cost reduction

3. New - product development challenges:

New-product introductions have accelerated, and in retailing, consumer goods,
electronics, autos, and other industries, the time to bring a product to market has been cut
in half.
1. The innovative imperative.
2. New product success.
3. New product failure.

4. Organizational Arrangements
Organizing new product development:
Companies handle the organizational aspect of new-product development in several
ways. Many assign responsibility to product managers. But product managers are often
busy managing existing lines and may lack the skills and knowledge to develop and
critique new products.
1. Cross functional teams.

2. Stage gate systems.

5. The new product development and decision process:

1. Idea generation, 2. Idea screening, 3. Concept development and testing,
4. Market strategy, 5. Business analysis,
7. Market testing,

6. Product development,

8. Commercialization.

6. Development to commercialization:
Up to now, the product has existed only as a word description, a drawing, or a prototype.
The next step represents a jump in investment that dwarfs the costs incurred so far.
1. Product development
a. physical proto type
b. customer test (alpha test (internal), beta test (customer))
2. Market development

Sales wave research

Controlled test marketing
Simulated test marketing
Test markets

3. Commercialization
a. when
b. where

c. how
d. To whom

7. The consumer adoption process:

Adoption is an individuals decision to become a regular user of a product and is
followed by the consumer-loyalty process. New-product marketers typically aim at early
adopters and use the theory of innovation diffusion and consumer adoption to identify
them. Stages in adoption process


Managing a holistic marketing organization

1. Trends in marketing practices

Market fragmentation
Consumer empowerment
Environmental concerns

2. Internal marketing
Traditionally, marketers played the role of middleman, charged with understanding
customers needs and transmitting their voice to various functional areas. But in a
networked enterprise, every functional area can interact directly with customers.
Marketing no longer has sole ownership of customer interactions; rather, it now must
integrate all the customer-facing processes so customers. See a single face and hear a
single voice when they interact with the firm. Internal marketing requires that everyone

in the organization accept the concepts and goals of marketing and engage in choosing,
providing, and communicating customer value.

FIG 1: Functional Organization

Organizing the marketing departments

1. Functional organization:
In the most common form of marketing organization, functional specialists report to a
marketing vice president who coordinates their activities. The main advantage of a
functional marketing organization is its administrative simplicity.

2. geographic organization:
A company selling in a national market often organizes its sales force (and sometimes
marketing) along geographic lines.

3. Product or brand management:

Companies producing a variety of products and brands often establish a product- (or
brand-) management organization. This does not replace the functional organization but
serves as another layer of management.

4. Market management organization:

Canon sells fax machines to consumer, business, and government markets. Nippon Steel
sells to the railroad, construction, and public utility industries. When customers fall into
different user groups with distinct buying preferences and practices, a marketManagement organization is desirable.

5. Matrix management organization

Companies that produce many products for many markets may adopt a matrix
organization employing both product and market managers. The rub is that its costly and
often creates conflicts. Theres the cost of supporting all the managers, and questions
about where authority and responsibility for marketing activities should resideat

3. The Product Managers Interactions

A product-management organization makes sense if the companys products are quite
different or there are more than a functional organization can handle. This form is
sometimes characterized as a hub-and-spoke system. The brand or product manager is
figuratively at the center, with spokes leading to various departments representing.

FIG 2: Three types of product teams

FIG 3: The product managers interactions

Relationship with other departments:

Under the marketing concept, all departments need to think customer and work
together to satisfy customer needs and expectations. Yet departments define company
problems and goals from their viewpoint, so conflicts of interest and communications

problems are unavoidable. The marketing vice president, or the CMO, must usually work
through persuasion rather than through authority to
(1) Coordinate the companys internal marketing activities and
(2) Coordinate marketing with finance, operations, and other company functions to serve
the customer.

Creative marketing organizations:

Many companies realize theyre not yet really market and customer driventhey are
product and sales driven. Transforming into a true market-driven company requires:
1. Developing a company-wide passion for customers
2. Organizing around customer segments instead of products
3. Understanding customers through qualitative and quantitative research the task is not
easy, but the payoffs can be considerable. It wont happen as a result of the CEO making
speeches and urging every employee to think customer.

Social responsible marketing:

Effective internal marketing must be matched by a strong sense of ethics, values, and
social responsibility. A number of forces are driving companies to practice a higher level
of corporate social responsibility, such as rising customer expectations, evolving
employee goals and ambitions, tighter government legislation and pressure, investor
interest in social criteria, media scrutiny, and changing business procurement practices.

Cause related marketing:

Many firms blend corporate social responsibility initiatives with marketing activities.
Cause related marketing links the firms contributions to a designated cause to customers
engaging directly or indirectly in revenue-producing transactions with the firm.

Social marketing:
Cause-related marketing supports a cause. Social marketing by nonprofit or government
organizations furthers a cause, such as say no to drugs or exercise more and eat better.
Different types of organizations conduct social marketing in the United States

Marketing implementation:
Marketing implementation is the process that turns marketing plans into action
assignments and ensures they accomplish the plans stated objectives. A brilliant strategic
marketing plan counts for little if not implemented properly.

Marketing implementation control:

Marketing control is the process by which firms assess the effects of their marketing
activities and programs and make necessary changes and adjustments. Four types of
needed marketing control are provided by the authors
1. Annual-plan control,
2. Profitability control,
3. Efficiency control,
4. Strategic control

1. The marketing audit

A marketing audit is a comprehensive, systematic, independent, and periodic examination
of a companys or business units marketing environment, objectives, strategies, and
activities, with a view to determining problem areas and opportunities and recommending
a plan of action to improve the companys marketing performance.

4. The future marketing

To succeed in the future, marketing must be more holistic and less departmental.
Marketers must achieve larger influence in the company, continuously create new ideas,
and strive for customer insight by treating customers differently but appropriately.
They must build their brands more through performance than promotion. They must go
electronic and win through building superior information and communication systems.
The coming years will see:

The demise of the marketing department and the rise of holistic marketing
The demise of free-spending marketing and the rise of ROI marketing
The demise of marketing intuition and the rise of marketing science
The demise of manual marketing and the rise of both automated and creative

The demise of mass marketing and the rise of precision marketing