POSITIONING

Product Differentiation: Here the seller faces an abundance of design parameters, including form, features, performance quality, conformance quality, durability, reliability, style, reparability and design.

1. 2.

Form:- Many product can be differentiated in form the size, shape of physical structure of a product.

Features:- Most products can be offered with varying features that supplement the products basic functions. Being the first to introduce valued new features is one of the most effective ways to compete.

3.

Performance Quality: Most products are established one of four performance levels: low, average, high or superior. Performance Quality is the level at which the products primary characteristics operate.

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Conformance Quality: Buyers expect products to have a high conformance quality, which is the degree to which all produced units are identical and meet the promised specifications.

5.

Durability: Durability, a measure of the products expected operating life under natural stressful conditions, is a valued attribute for certain products.

6. 7. 8.

Reliability: Reliability is a measure of the probability that a product will not malfunction or fail within specified time period.

Repairability: Repairability is a measure of the ease of repairing a product when it malfunctions or fails.

Style: style describes the products look and feel to the buyer. Style has the advantage of creating distinctiveness that is difficult to copy.

9.

Design: As competition intensifies, design offers a potent way to differentiate and position a companys products and services. Design is the totality of features that effect how a product looks and functions in terms of customer requirements.

Service Differentiation : When the physical product can not easily be differentiated, the key to competitive success may lie in adding
valued service and improving their quality. The main service differentiators are ordering ease, delivery installation, customer training, customer consulting and maintenance and repair.

1. 2.

Ordering Ease: Ordering ease refers to how easy it is for the customer to place an order with the company.

Delivery: Delivery refers to how well the product or service is delivered to the customer. It includes speed, accuracy and care attending the delivery process.

3.

Installation: Installation refers to the work done to make a product operational in its planned location. Buyers of heavy equipment expect good installation service. Differentiation at this point in the consumption chain is particularly important for companies with complex products.

4.

Customer Training: Customer training refers to training the customers employers to use the venders equipment properly and efficiently.

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Customer Consulting: Customer consulting refers to data, information systems and advice services that the seller offers to buyers

Maintenance and Repair: Maintenance and repair describes the service programme for helping customers keep purchased products in good working order.

Personal Differentiation: Companies can gain strongly through having better- trained people. Better trained personnel exhibit six
characteristics:-

i) Competence: They posses the required skill and knowledge.

ii) Courtesy: They are friendly, respectful and considerate.

iii) Credibility: They are trustworthy.

iv) Reliability: They perform the service consistently and accurately.

v) Responsiveness: They respond quickly to customers requests and problems.

vi) Communication: They make an effort to understand the customer and communicate clearly.

Channel Differentiation: Companies can achieve competitive advantage through the way they design their distribution channels
coverage expertise and performance.

Image Differentiation: Buyers respond differently to company and brand image. Image is the way the public perceives the company or
its product.

New product development process

Step 1. IDEA GENERATION

The first step of new product development requires gathering ideas to be evaluated as potential product options. For many companies idea generation is an ongoing process with contributions from inside and outside the organization. Many market research techniques are used to encourage ideas including: running focus groups with consumers, channel members, and the companys sales force; encouraging customer comments and suggestions via toll-free telephone

numbers and website forms; and gaining insight on competitive product developments through secondary data sources. One important research technique used to generate ideas is brainstorming where open-minded, creative thinkers from inside and outside the company gather and share ideas. The dynamic nature of group members floating ideas, where one idea often sparks another idea, can yield a wide range of possible products that can be further pursued.

Step 2. SCREENING
In Step 2 the ideas generated in Step 1 are critically evaluated by company personnel to isolate the most attractive options. Depending on the number of ideas, screening may be done in rounds with the first round involving company executives judging the feasibility of ideas while successive rounds may utilize more advanced research techniques. As the ideas are whittled down to a few attractive options, rough estimates are made of an ideas potential in terms of sales, production costs, profit potential, and competitors response if the product is introduced. Acceptable ideas move on to the next step.

Step 3. CONCEPT DEVELOPMENT AND TESTING

With a few ideas in hand the marketer now attempts to obtain initial feedback from customers, distributors and its own employees. Generally, focus groups are convened where the ideas are presented to a group, often in the form of concept board presentations (i.e., storyboards) and not in actual working form. For instance, customers may be shown a concept board displaying drawings of a product idea or even an advertisement featuring the product. In some cases focus groups are exposed to a mock-up of the ideas, which is a physical but generally non-functional version of product idea. During focus groups with customers the marketer seeks information that may include: likes and dislike of the concept; level of interest in purchasing the product; frequency of purchase (used to help forecast demand); and price points to determine how much customers are willing to spend to acquire the product

Step 4. BUSINESS ANALYSIS

At this point in the new product development process the marketer has reduced a potentially large number of ideas down to one or two options. Now in Step 4 the process becomes very dependent on market research as efforts are made to analyze the viability of the product ideas. (Note, in many cases the product has not been produced and still remains only an idea.) The key objective at this stage is to obtain useful forecasts of market size (e.g., overall demand), operational costs (e.g., production costs) and financial projections (e.g., sales and profits). Additionally, the organization must determine if the product will fit within the companys overall mission and strategy. Much effort is directed at both internal research, such as discussions with production and purchasing personnel, and external marketing research, such as customer and distributor surveys, secondary research, and competitor analysis.

Step 5. PRODUCT AND MARKETING MIX DEVELOPMENT

Ideas passing through business analysis are given serious consideration for development. Companies direct their research and development teams to construct an initial design or

prototype of the idea. Marketers also begin to construct a marketing plan for the product. Once the prototype is ready the marketer seeks customer input. However, unlike the concept testing stage where customers were only exposed to the idea, in this step the customer gets to experience the real product as well as other aspects of the marketing mix, such as advertising, pricing, and distribution options (e.g., retail store, direct from company, etc.). Favorable customer reaction helps solidify the marketers decision to introduce the product and also provides other valuable information such as estimated purchase rates and understanding how the product will be used by the customer. Reaction that is less favorable may suggest the need for adjustments to elements of the marketing mix. Once these are made the marketer may again have the customer test the product. In addition to gaining customer feedback, this step is used to gauge the feasibility of large-scale, cost effective production for manufactured products.

Step 6. MARKET TESTING

Products surviving to Step 6 are ready to be tested as real products. In some cases the marketer accepts what was learned from concept testing and skips over market testing to launch the idea as a fully marketed product. But other companies may seek more input from a larger group before moving to commercialization. The most common type of market testing makes the product available to a selective small segment of the target market (e.g., one city), which is exposed to the full marketing effort as they would be to any product they could purchase. In some cases, especially with consumer products sold at retail stores, the marketer must work hard to get the product into the test market by convincing distributors to agree to purchase and place the product on their store shelves. In more controlled test markets distributors may be paid a fee if they agree to place the product on their shelves to allow for testing. Another form of market testing found with consumer products is even more controlled with customers recruited to a laboratory store where they are given shopping instructions. Product interest can then be measured based on customers shopping response. Finally, there are several high-tech approaches to market testing including virtual reality and computer simulations. With virtual reality testing customers are exposed to a computer-projected environment, such as a store, and are asked to locate and select products. With computer simulations customers may not be directly involved at all. Instead certain variables are entered into a sophisticated computer program and estimates of a target markets response are calculated.

Step 7. COMMERCIALIZATION
If market testing displays promising results the product is ready to be introduced to a wider market. Some firms introduce or roll-out the product in waves with parts of the market receiving the product on different schedules. This allows the company to ramp up production in a more controlled way and to fine tune the marketing mix as the product is distributed to new areas.

6 Steps to Setting a Price Strategy for your Business

As an entrepreneur, setting a pricing strategy and policy for your products/services for the first time when you develop it or when you introduce your product / service into a new geographical area, can be

a big head ache.Reason being, that price is not just a tag on the product or service, it communicates to your customers your businesss intended value positioning and also determines your profitability. When setting a pricing strategy you have to consider the following 6 factors; 1. Select the pricing objective to decide where you want to position your market offering. The five major objectives that you can pursue are survival, maximum current profit, maximum market share, maximum market skimming or product quality leadership. Having a clearer objective makes it easier to set a price. 2. Determine the demand. The price you set will affect the demand level and impact your business objectives differently. In normal situations, price and demand are inversely related, in that the higher the price the lower the demand and vice versa. 3. Estimate the costs. While doing this, you want to charge a price that covers your cost of production, distribution and selling of the product plus a decent return for your efforts and risks. 4. Analyze competitor costs, prices, offers and possible reactions. You should consider your nearest competitors price, product features and evaluate them to check their worth to the customers. You can then decide to charge more, same as competitor or less. 5. Select a pricing method. When selecting, consider the cost of the product or service, competitor prices and the customers assessment of the unique features. The pricing method you decide should include one or more of these considerations.http://strategies-to-grow-business.blogspot.com/2011/03/how-toprice-5-methods-to-set-price.html 6. Finally, select the price. Here, you must consider the following: 1) Impact of other marketing activities like brand quality and advertising in relation to competition.2) Companies pricing policy, 3) Impact of the price on other parties like the distributors and dealers.

Price is not just a number on your product or service, it produces revenue and can determine if you reap in huge profits or suffer losses. Effective designing and implementation of a pricing strategy is thus important for your profitability.

PROMOTION Direct marketing: Direct marketing is a channel free approach to distribution and/or marketing
communications. So a company may have a strategy of dealing with its customers 'directly,' for example banks (such as CityBank) or computer manufacturers (such as Dell). There are no channel intermediaries i.e. distributors, retailers or wholesalers. Therefore - 'direct' in the sense that the deal is done directly between the manufacturer and the customer. As mentioned above, 'direct' also in the sense that marketing communications are targeted at consumers by the manufacturers. For example, a brand that uses channels of distribution would target marketing communications at wholesalers/distributors, retailers, and consumers, or a blend of all three. On the other hand, a direct marketing company could focus upon communicating directly with its customers. Direct marketing and direct mail are often confused - although direct mail is a direct marketing tool.

There are a number of direct marketing media other than direct mail. These include (and are by no means limited to):

Inserts in newspapers and magazines. Customer care lines. Catalogues. Coupons. Door drops. TV and radio adverts with free phone numbers or per-minute-charging. ...and finally - and most importantly - The Internet and New Media.

INTRODUCTION TO MARKETING The four C's of marketing have replaced the four P's It is no longer about the Product... but instead about CONSUMER needs and wants. It is no longer about the Price... but the bum fun COST to satisfy consumers It is no longer about the Place...but about the CONVENIENCE to buy I is no longer about Promotion... but about COMMUNICATION

Product: It is the tangible object or an intangible service that is getting marketed through the program. Tangible products may be items like consumer goods (Toothpaste, Soaps, Shampoos) or consumer durables (Watches, IPods). Intangible products are service based like the tourism industry and information technology based services or codes-based products like cellphone load and credits. Product design which leads to the product attributes is the most important factor. However packaging also needs to be taken into consideration while deciding this factor. Every product is subject to a life-cycle including a growth phase followed by an eventual period of decline as the product approaches market saturation. To retain its competitiveness in the market, continuous product extensions though innovation and thus differentiation is required and is one of the strategies to differentiate a product from its competitors.

Price: The price is the simply amount a customer pays for the product. If the price outweigh the perceived benefits for an individual, the perceived value of the offering will be low and it will be unlikely to be adopted, but if the benefits are perceived as greater than their costs, chances of trial and adoption of the product is much greater.

Place: Place represents the location where a product can be purchased. It is often referred to as the distribution channel. This may include any physical store (supermarket, departmental stores) as well as virtual stores (e-markets and e-malls) on the Internet. This is crucial as this provides the place utility to the consumer, which often becomes a deciding factor for the purchase of many products across multiple product categories.
5 PRODUCT LEVELS
perceived value. Kotler defined five levels to a product: 1. Core Benefit the fundamental need or want that consumers satisfy by consuming the product or service. 2. Generic Product a version of the product containing only those attributes or characteristics absolutely necessary for it to function. 3. Expected Product the set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. 4. Augmented Product inclusion of additional features, benefits, attributes or related services that serve to differentiate the product from its competitors. 5. Potential Product all the augmentations and transformations a product might undergo in the future.