Marketing Uas Notes

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Managing Service Productivity

- Can train current employees better or hire new ones who will work harder or more skillfully.

- Increase the quantity of s by giving up some quality. A

- service provider can harness the power of technology

- Attempts to industrialize s or cut costs can make it more efficient in the SR. Can also reduce LR ability to innovate, maintain service quality, or respond to consumer needs and desires.

Ex) airlines providing free snacks & charging luggage = in their attempts to improve productivity, they have mangled customer service.

- In attempting to improve service productivity, companies must be mindful of how they create and deliver customer value. They should be careful not to take the “service” out of service.

The New-Product Development Process

Idea generation- Systematic search for new-product ideas.

9.1 Major Stages in New-Product Development

Internal Idea Sources – through R&D, can pick the brains of its own people. Intrapreneurial programs tht encourage employees to develop new product ideas.[pic 5]

External Idea Sources –

- Distributors (as they’re close to market, pass along info about consumer problems & new p possibility)

- Suppliers (new concepts, techniques, materials)

- Competitors (clues about new product)

- Trade magazine, shows, websites, commercial laboratories & inventors.

- Customers – analyze questions& complaints to find new products tht better solve consumer problems, invite to share suggestions & ideas.

Crowdsourcing - Inviting broad communities of people— customers, employees, independent scientists and researchers, & public at large—into the new-product innovation process.

Idea screening - Screening new-product ideas to spot good ideas & drop poor ones as soon as possible.

- RWW screening (Real, Win, Worth Doing) framework.

Product Concept - detailed version of the new-product idea stated in meaningful consumer terms.

Concept testing - Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal.

Marketing strategy development - Designing an initial marketing strategy for a new product based on the product concept.

Consists of three parts.

1) Describes target market, planned value proposition & sales, market share, & profit goals for the first few years.

2)Outlines product’s planned price, distribution, and marketing budget for the first year.

3) Describes planned LR sales, profit goals & marketing mix strategy.

Business analysis - review of the sales, costs & profit projections for new p to find out whether these factors satisfy company’s objectives.

Product development - Developing p concept into physical p to ensure tht p idea can be turned into workable market offering.

Test marketing - Stage of new-p development in which p & proposed marketing program are tested in realistic market settings.

Commercialization - Introducing a new product into the market.

Customer-centered new-product development - New-p development that focuses on finding new ways to solve customer problems & create more customer satisfying experiences.

Product life cycle (PLC) - The course of a product’s sales and profits over its lifetime. Can describe p class/ brand, p form. It involves five distinct stages:

[pic 6]

1. Product development begins when the company finds & develops new-product idea. During this, sales are 0 & company’s investment costs mount.

2. Introduction - period of slow sales growth as the p is introduced @ market. Profits are nonexistent in this stage

cuz of heavy expenses of product introduction. First distributed & made available for purchase.

3. Growth - period of rapid market acceptance & increasing profits. P sale starts climbing quickly.

4. Maturity - period of slowdown in sales growth or levels off cuz the p has achieved acceptance by most potential buyers. Profits level off or decline cuz of increased marketing outlays to defend the p against competition.

5. Decline - period when sales fall off and profits drop, fade away.

from technological advances, shifts in consumer tastes, increased competition.

Some firms withdraw from the market.

Remaining may remove their p offerings.

May drop smaller market segments & marginal trade channels, or they may cut the promotion budget and reduce their prices further

Weak product may take up too much of management’s time.

Often requires frequent price & inventory adjustments.

Requires advertising, sales force attention tht might be better used to make “healthy” p more profitable.

P’s failing reputation can cause customer concerns about the company & its other products. Keeping weak p delays search for replacements, creates a lopsided product mix, hurts current profits, & weakens the company’s foothold on the future. For these reasons, companies need to pay more attention to their aging products. management may decide to drop the product from its line. It can sell it to another firm or simply liquidate it at salvage value

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