1. Top 10 Marketing Concepts Chapter 20 Introducing New Market Offerings Marketing Mangement Philip Kotler , Kevin Lane Keller 13th Edition PaoVirata September 2011 Prof. Bong De Ungria pRUNSViRATA www.prunsvirata.blogspot.com

2. Chapter 20 Top 10 Marketing Concepts Outline pRUNSViRATA Managing the Development Process : IDEAS Concept 1 – Idea Generation Concept 2 – Idea Screening Managing the Development Process : CONCEPT STRATEGY Concept 3 – Concept Development Testing Concept 4 – Marketing Strategy Development Concept 5 – Business Analysis www.prunsvirata.blogspot.com

3. Chapter 20 Top 10 Marketing Concepts Outline (cont) pRUNSViRATA Managing the Development Process : DEVELOPMENT TO CONCEPTUALIZATION Concept 6 – Product Development Concept 7 – Market Testing Concept 8 – Commercialization Consumer : ADOPTIVE PROCESS Concept 9 – Stages in Adoptive Process Concept 10 – Factors Influencing the Adoptive Process www.prunsvirata.blogspot.com

4. Managing the Development Process : IDEASConcept 1 – IDEA GENERATION pRUNSViRATA New product ideas can come from interacting with various Customers Employees Scientists Engineers Channel members Marketing Agencies Top Management Competitors www.prunsvirata.blogspot.com

5. Managing the Development Process : IDEASConcept 1 – IDEA GENERATIONSeven Ways to Draw New Ideas From Customers pRUNSViRATA Observe how your customers are using your product Ask your customers about their problems with your products Ask your customers about their dream products Use a customer advisory board to comment on your company’s ideas Use Web sites for new ideas Form a brand community of enthusiasts who discuss your product Encourage or challenge your customers to change or improve your product www.prunsvirata.blogspot.com

6. Managing the Development Process : IDEASExample1 – IDEA GENERATIONSeven Ways to Draw New Ideas From Customers pRUNSViRATA Observe how your customers are using your product This can be done through : Market Research Surveys www.prunsvirata.blogspot.com

7. Managing the Development Process : IDEASExample1 – IDEA GENERATIONSeven Ways to Draw New Ideas From Customers pRUNSViRATA Ask your customers about their problems with your products Ask your customers about their dream products Market Research Surveys www.prunsvirata.blogspot.com

8. Managing the Development Process : IDEASExample1 – IDEA GENERATIONSeven Ways to Draw New Ideas From Customers pRUNSViRATA Use a customer advisory board to comment on your company’s ideas Use Web sites for new ideas www.prunsvirata.blogspot.com

9. Managing the Development Process : IDEASExample1 – IDEA GENERATIONSeven Ways to Draw New Ideas From Customers pRUNSViRATA Form a brand community of enthusiasts who discuss your product Encourage or challenge your customers to change or improve your product www.prunsvirata.blogspot.com

10. Managing the Development Process : IDEASConcept 2 – IDEA SCREENING pRUNSViRATA Drop poor ideas as early as possible 2 Types of Errors in IDEA SCREENING DROP – error : company dismisses a good idea GO – error : company permits a poor idea to move into development and commercialization Absolute product failure – loses money Partial product failure – loses money but covers all variable cost and some fixed costs Relative product failure – yields a profit lower than the company’s target www.prunsvirata.blogspot.com

11. Managing the Development Process : IDEASExample2 – IDEA SCREENING pRUNSViRATA DROP – error www.prunsvirata.blogspot.com

12. Managing the Development Process : IDEASExample2 – IDEA SCREENING pRUNSViRATA GO – error www.prunsvirata.blogspot.com

13. Managing the Development Process : CONCEPT STRATEGYConcept 3 – CONCEPT DEVELOPMENT TESTING pRUNSViRATA 3 Steps in CONCEPT DEVELOPMENT TESTING Concept Development Who will use this product? What primary benefit should this product provide? When will people use this product? Concept Testing - presenting the product concept to target customers and getting their reaction Conjoint Analysis –measures the consumers preference for alternative product concepts www.prunsvirata.blogspot.com

14. Managing the Development Process : CONCEPT STRATEGYExample3 – CONCEPT DEVELOPMENT TESTING pRUNSViRATA Concept Development Who will use this product? What primary benefit should this product provide? When will people use this product? Milk Kids Adults Complete Nutrition Home School Workplace www.prunsvirata.blogspot.com

15. Managing the Development Process : CONCEPT STRATEGYExample3 – CONCEPT DEVELOPMENT TESTING pRUNSViRATA Concept Testing Conjoint Analysis www.prunsvirata.blogspot.com

16. Managing the Development Process : CONCEPT STRATEGYConcept 4 – MARKETING STRATEGY DEVELOPMENT pRUNSViRATA 3 Part Strategy Plan Market Size, Structure, Behavior Price, Distribution Strategy, Marketing Budget Profit goals, Marketing Strategy Mix www.prunsvirata.blogspot.com

17. Managing the Development Process : CONCEPT STRATEGYExample4 – MARKETING STRATEGY DEVELOPMENT pRUNSViRATA Market Size, Structure, Behavior www.prunsvirata.blogspot.com

18. Managing the Development Process : CONCEPT STRATEGYExample4 – MARKETING STRATEGY DEVELOPMENT pRUNSViRATA Price, Distribution Strategy, Marketing Budget www.prunsvirata.blogspot.com

19. Managing the Development Process : CONCEPT STRATEGYExample4 – MARKETING STRATEGY DEVELOPMENT pRUNSViRATA Profit goals, Marketing Strategy Mix www.prunsvirata.blogspot.com

20. Managing the Development Process : CONCEPT STRATEGYConcept 5 – BUSINESS ANALYSIS pRUNSViRATA Management needs to prepare sales, cost, and profit projections to determine whether they satisfy company objectives through: Estimating Total Sales Estimating Costs and Profits www.prunsvirata.blogspot.com

21. Managing the Development Process : CONCEPT STRATEGYExample5 – BUSINESS ANALYSIS pRUNSViRATA Estimating Total Sales Estimating Costs and Profits www.prunsvirata.blogspot.com

22. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONConcept 6 – PRODUCT DEVELOPMENT pRUNSViRATA Physical prototypes – development of a prototype that embodies the key attributes described in the product-concept statement Customer Tests- rigorous functional test Alpha Testing – testing the product within the firm Beta Testing – testing with the customers www.prunsvirata.blogspot.com

23. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONExample6 – PRODUCT DEVELOPMENT pRUNSViRATA Physical prototypes www.prunsvirata.blogspot.com

24. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONExample6 – PRODUCT DEVELOPMENT pRUNSViRATA Customer Tests Alpha Testing Beta Testing www.prunsvirata.blogspot.com

25. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONConcept 7 – MARKET TESTING pRUNSViRATA Consumer-Goods Market Testing– consumer-products tests seek to estimate four variables : trial, first repeat, adoption and purchase frequency Business-Goods Market Testing – technical people observe how test customers use the product and their reactions after the test. www.prunsvirata.blogspot.com

26. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONConcept 7 – MARKET TESTING pRUNSViRATA Consumer-Goods Market Testing Four Major Methods of consumer-goods market testing Sales Wave Research – products offered to customers at no cost then measures the customers’ reaction and repeat buy Simulated Test Marketing – uses advertising resources such as tv commercials or print ads measures the sales generated from this activities Controlled Test Marketing – research firm manages a panel of stores that will carry the new products for a fee Test Markets – uses full advertising and promotion campaign to certain cities www.prunsvirata.blogspot.com

27. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONExample7 – MARKET TESTING pRUNSViRATA Consumer-Goods Market Testing Four Major Methods of consumer-goods market testing Sales Wave Research Simulated Test Marketing www.prunsvirata.blogspot.com

28. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONExample7 – MARKET TESTING pRUNSViRATA Consumer-Goods Market Testing Controlled Test Marketing Test Markets www.prunsvirata.blogspot.com

29. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONExample7 – MARKET TESTING pRUNSViRATA Business-Goods Market Testing www.prunsvirata.blogspot.com

30. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONConcept 8 – COMMERCIALIZATION pRUNSViRATA When (Timing) Where (Geographic Strategy) To Whom (Target-Market Prospects) How (Introductory Market Strategy) www.prunsvirata.blogspot.com

31. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONExample8 – COMMERCIALIZATION pRUNSViRATA When (Timing) Summer Christmas Season School Opening Rainy Season Where (Geographic Strategy) Major Cities Provinces Sports Shops Department Stores www.prunsvirata.blogspot.com

32. Managing the Development Process : DEVELOPMENT TO COMMERCIALIZATIONExample8 – COMMERCIALIZATIONLaunch of a new shoes pRUNSViRATA To Whom (Target-Market Prospects) Students Runners All Men Only Female Only Adults Only How (Introductory Market Strategy) Product Launch Advertisements Store Distribution www.prunsvirata.blogspot.com

33. CONSUMER – ADOPTION PROCESSConcept 9 – STAGES IN THE ADOPTION PROCESS pRUNSViRATA Adoption – individual’s decision to become a regular user of a product Consumer Adoption Process – the mental steps through which an individual passes from first hearing about an innovation to final adoption www.prunsvirata.blogspot.com

34. CONSUMER – ADOPTION PROCESSConcept 9 – STAGES IN THE ADOPTION PROCESS pRUNSViRATA Five Stages of Adoption Process Awareness – customer is aware of the product but lacks information Interest – customer is stimulated to seek information about the product Evaluation – customer considers whether to try the product Trial – customer tries the product Adoption – customer decides to make full or regular use of the product www.prunsvirata.blogspot.com

35. CONSUMER – ADOPTION PROCESSExample9 – STAGES IN THE ADOPTION PROCESS Doctor’s Adoption Process to a new drug pRUNSViRATA Five Stages of Adoption Process Awareness A medical representative introduces a new drug. Interest Doctor requests for more studies regarding the drug. www.prunsvirata.blogspot.com

36. pRUNSViRATA Evaluation Doctor reviews the literature and clinical studies provided. Trial Medical Representative gives the doctor sample medicines for trial patients. www.prunsvirata.blogspot.com CONSUMER – ADOPTION PROCESSExample9 – STAGES IN THE ADOPTION PROCESS Doctor’s Adoption Process to a new drug

37. pRUNSViRATA Adoption Once proven effective and will improve the quality of life of the patient, the doctor will prescribe the medicine to his patients and will be his top of mind choice medication for that ailment. www.prunsvirata.blogspot.com CONSUMER – ADOPTION PROCESSExample9 – STAGES IN THE ADOPTION PROCESS Doctor’s Adoption Process to a new drug

38. CONSUMER – ADOPTION PROCESSConcept 10 – FACTORS INFLUENCING THE ADOPTION PROCESS pRUNSViRATA READINESS TO TRY NEW PRODUCTS AND PERSONAL INFLUENCE – the effect one person has on another’s attitude or purchase probability CHARACTERISTICS OF THE INNOVATION – some products catch on immediately, whereas others take a long time to gain acceptance ORGANIZATION’S READINESS TO ADOPT INNOVATIONS – adoption is associated with variables in the organization’s environment www.prunsvirata.blogspot.com

39. CONSUMER – ADOPTION PROCESSExample10 – FACTORS INFLUENCING THE ADOPTION PROCESS pRUNSViRATA READINESS TO TRY NEW PRODUCTS AND PERSONAL INFLUENCE Influence of endorsers www.prunsvirata.blogspot.com

40. CONSUMER – ADOPTION PROCESSExample10 – FACTORS INFLUENCING THE ADOPTION PROCESS pRUNSViRATA CHARACTERISTICS OF THE INNOVATION Solar powered cars – not all can easily adopt and switch to these vehicles www.prunsvirata.blogspot.com

41. CONSUMER – ADOPTION PROCESSExample10 – FACTORS INFLUENCING THE ADOPTION PROCESS pRUNSViRATA ORGANIZATION’S READINESS TO ADOPT INNOVATIONS CT scans are for major hospitals and institutions . This innovation is not yet suitable for provincial clinics and health centers. www.prunsvirata.blogspot.com

42. Top 10 Marketing Concepts Chapter 20 Introduicng New Market Offerings Marketing Mangement Philip Kotler , Kevin Lane Keller 13th Edition PaoVirata September 2011 Prof. Bong De Ungria pRUNSViRATA www.prunsvirata.blogspot.com