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SECTION A GROUP 5 SREERAMULA RAJEEV(11DCP047) AJAY BISHT(11DCP004) CHINMAY BARIK(11DCP016) RAJATH RAVIKUMAR(11DCP037)
NEW PRODUCT
Mahindra - Reva
Mahindra Bikes
VIRGIN AIRLINES
WALT DISENY THEME PARKS
Repositioning
Maruti Wagon R
Put the Focus on the People, Not the Product --- Steve Jobs
Contd...
Product Launch is the most intense part of the product cycle. It is the period where the product is announced to the outside world and the first order can be placed. Product launch is the orchestrated introduction of a new product (or version of a product) to the market; the events surrounding making the product available for purchase for the first time.
Contd..
To satisfy additional customer demand. Spotting an additional way of adding value to your existing portfolio, in a new or existing niche. As a means of diversifying, to either grow the business, or to protect future earnings as a cash cow, reaches end of life.
Idea Screening
Market Testing
Idea Generation
Commercialization
Factors That Limit New Product Development Shortage of effective ideas Fragmented markets Social and governmental constraints Cost of development Capital shortages Faster required development time Shorter product life cycles
IDEA GENERATION
Opportunity Identification
Internal sources
Company employees at all levels
External sources
Customers Competitors Distributors Suppliers Outsourcing
P&G marketers spend at least 12 hours a month with consumers in their homes , watching how they wash dishes, clean floors and brush teethes and asking them about their habits and sources of frustration.
Toyota claims its employees submit 2 million ideas annually. Microsoft studied 13 to 24 years old and developed Net Gen to satisfy their instant messaging needs.
Lateral Mapping
Gas stations + food Cafeteria + Internet Cereal + snacking Candy + toy Audio + portable
IDEA SCREENING
Idea Screening
After the firm identifies potential products, it must screen them. In product screening , poor, unsuitable or otherwise unattractive ideas are weeded out from further actions. No Error can occur if company permits poor ideas to move into development and commercialization.
QUESTIONS OF SCREENING
Does the product meet a need? Would it offer superior value? Can it be distinctively advertised? Does the company has necessary capital? Will the new product deliver the expected sales volume, sales growth and profit? Is there sufficient demand? Does it fit the firm s image?
CONCEPT DEVELOPMENT
Concept Development
Product idea
A product idea is a possible product the company might offer to the market. Eg:
Idea
A car manufacturer figures out how to design an fuel cell powered electric car that can go as fast as 110 km per hour and as far as 370 km before needing to be recharged. The manufacturer estimates that the electric car's operating costs will be about half those of a regular car.
What product concepts can we create for the above mentioned electric car?
Concept 1. A moderately priced subcompact designed as a second family car to be used around town. The car is ideal for running errands and visiting friends. Concept 2. A medium-cost, sporty compact appealing to young people. Concept 3. An inexpensive subcompact 'green' car appealing to environmentally conscious people who want practical transportation and low pollution.
Concept Testing
Concept testing calls for testing new-product concepts with a group of target consumers. The concepts may be presented to consumers symbolically or physically.
Here, in words, is Concept 3: An efficient, fun-to-drive, fuel-cellpowered electric sub compact car that seats four. This high-tech wonder runs on hydrogen created from methanol fuel, providing practical and reliable transportation with almost no pollution. It goes up to 110 km per hour and, unlike ordinary batterypowered electric cars, never needs frequent recharging. It's priced, fully equipped, at $13000.
After being exposed to the concept, consumers may then be asked to react to it by answering the questions:
Do you understand the concept of an hydrogen cell electric car? Yes( ) No( ) Do you believe the claims about the car's performance? Yes( ) No( ) What are the main benefits of the electric car compared with a conventional car? What improvements in the car's features would you suggest? For what uses would you prefer an electric car to a conventional car? What would be a reasonable price to charge for the electric car? Who would be involved in your decision to buy such a car? Who would drive it? Would you buy such a car? Definitely( ) Probably( ) Probably not( ) Definitely not( )
Target Market
Young Well-educated Moderate-to-high income individuals Couples or small families Environmentally responsible/ Socially Conscious
Position
The car will he positioned as: More economical to operate More fun to drive Environmental Friendly: Less polluting than today's internal combustion engine cars Less restricting than battery powered electric cars which must be recharged regularly
Sales, market share and profit goals for the first few years
The company will aim to sell 100,000 cars in the first year, at a loss of not more than 10 million. In the second year, the company will aim for sales of 120,000 cars and a profit of $25million.
SOUTHWEST AIRLINES
does not fly great distances midsize cities and secondary airports in large cities Result attract price-sensitive customers fast turnarounds keep planes flying longer hours provide frequent departures with fewer aircraft
IKEA
Strategy Click to Play Video self-service young furniture buyers who want style at low cost serves customers who are happy to trade off service for cost designs its own low-cost, modular, ready-to-assemble furniture displays every product it sells in room-like settings Customers are expected to do their own pickup and delivery Ikea will even sell you a roof rack for your car that you can return for a refund on your next visit Extra Services In-store child care Extended hours Note: These services are uniquely aligned with the needs of its customers, who are young, not wealthy, likely to have children (but no nanny), and, because they work for a living, have a need to shop at odd hours.
BUSINESS ANALYSIS
Business Analysis
Business Analysis Estimating Sales, Costs, and Profits Projections to See if They Meet Company Objectives
Cont..
From the projections we can conclude Maximum Investment Loss= $4.6 Million Pay Back Period is of 3.5 years. Now this goes with the management to decide whether to take risk of $4.6 million and a possible payback period of 3.5 years.
PRODUCT DEVELOPMENT
Product Development
Product development converts a product idea into a physical form and identifies a basic marketing strategy. It involves working prototype construction. Quality Function Deployment Customer Attributes Engineering Attributes
What is QFD
QFD stands for Quality Function Deployment. QFD is a set of methods used in translating customers needs and demands into working prototype. Its takes as input all the customer needs and demands and provides a technical output for engineers to build a prototype. Example customer wants powerful bike with good acceleration and engineers can turn the need into required horsepower. QFD is improved communication between Marketers, Engineers and Manufacturing People.
TEST MARKETING
Test Marketing
Launching a product in a small geographical area
A field experiment in realistic market setting Aims -To predict likely results of a national launch -To test the operational effectiveness of the marketing plan -To identify possible problems -To assess consumer reaction
Customers Test
Alpha Testing is testing the product within the organization to see how it performs in coordination with different application. Beta testing is testing with sample of consumers to bring them into lab or give them samples to use them at home.
Market Testing
After management is satisfied with functional and psychological performance, the product is ready to be branded with a name, logo, and packaging and go into a market test. 3 Types of Major Market Testing are Sales Wave Research Simulated Test Marketing Controlled Test marketing
Cont..
The company notes how many consumers buy the new brand and competing brands. This provides a measure of the ad s relative effectiveness against competing ads in stimulating trial. Those who did not buy the new brand are given a free sample. Some weeks later they are interviewed by phone to know about product s value in terms of satisfaction.
COMMERCIALIZATION
COMMERCIALIZATION
Commercialization is the process of introducing a new product or production method into the market.
Commercialization process
The funnel. It is essential to look at many ideas to get products or businesses that can be sustained longterm It is a stage-wise process and each stage has its own goals and milestones It is vital to involve main stakeholders early, including customers
WHEN(Timing)
First entry-Firm enjoys first mover advantage can backfire if the product is not debugged Parallel entry-Firm might time its entry to coincide with the competitors entry the market may pay more attention when both the companies are advertising the new product Late entry-Firm might delay its launch until after the competitor has borne the cost of educating the market the firm can learn the size of the market and avoid flaws
Where(Geographic strategy)
Small companies select an attractive city and put on blitz campaign,entering one city at a time. Large companies introduce their product into a whole region and then move to the next Companies with national distribution networks,such as auto companies,launch new models nationally. With the web connecting the far-flung parts of the globe,companies are increasingly rolling out new products simultaneously across the globe.
MEDIUMS OF LAUNCH
TYPES OF LAUNCHES
Press Release Online marketing/Blogging/Social Media Television Ads Event Launches Publicity Campaigns Road Shows Bill Boards
EVENTS
Products or services launched through promotional events Launch of Tata Nano
TRAILERS
Mostly Movies and Serials will be launched through trailers Launch of Robot Movie
AD CAMPAIGNS
Products or Services can be launched through Ad Campaigns Toyota Etios Launch
Video
PRINT MEDIA
Products launching through News Papers , Magazines Launch Of Maruti Swift
BILL BOARDS
Product Launch promotion through Bill Booards Bill Board of Mc Donalds introducing Espresso
Product Launch Launch like Steve Jobs: 7 Ways to Build Your Next Product Launch iPhone Launch
3. Be Revolutionary
Do something none of your competitors have ever done before Paint a picture of the future that your customers want to live in
5. Take Pre-Orders
Apple almost always offers pre-ordering of their new products It s not uncommon for them to sell hundreds of thousands of units within a week of launch