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Week 11

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					    MKTG 5850- Week 11



• Planning for New Products
   Concept Testing: Purpose of
• Assess New Product Ideas
    from Consumer Viewpoint
• Does Consumer View Match
    Company's
• Assist in choosing
    Best alternative
• Indicate Target markets
• Obtain clues to promotional
     Appeals
• To suggest early modifications
Product and Process Development
• Development of the new product includes:
  – Product design
  – Packaging design
  – Decisions to make or purchase product
    components

• Product Development Process:
  –   Product Specifications
  –   Industrial Design
  –   Prototype
  –   Process Development
  – Use Tests ©
          Testing Products
          With Customers

• Concept Testing


• Product Use Tests©
           Does it have the
         required attributes?


Verify        PURPOSE OF      Ideas for
               USE TESTS
claims                      improvements
             Identify use
              situations
     PHYSICAL PRODUCT
          TESTING
• Laboratory tests
• Expert evaluation
• Consumer tests
  –Single product evaluation
  –Blind tests
  –Experimental variations
  Issues in Marketing Strategy & Market Testing
• Marketing Strategy Decisions
   – Market Targeting
   – Positioning Strategy
• Market Testing Options
   – Simulated Test Marketing
   – Scanner – Based Test Marketing
   – Conventional Test Marketing
   – Testing Industrial Products
   – Selecting Test Sites
   – Length of the Test
   – External Influences
   Reasons for Test Marketing
• Est. National Mkt. Share or Sales Volume
• Correct Observable Problems With Product
  or Strategy
• Investigate
   * Buyer Characteristics
   * Trial and Usage Rates
   * Purchase Frequencies
   * Product Applications
• Check Alternative Strategies
         Picking Test Markets (5
              Considerations)
•   1. Demographics
•   2. Distribution
•   3. Competition
•   4. Media
•   5. Category Activity
            Comparing Test Methods
    (simulated v’s controlled v’s conventional)
•   Cost
•   Control of test units
•   Ability to test marketing programs
•   Effectiveness in revealing problems
•   Security (from competitors)
•   Speed of execution
•   Captures buyer behavior
•   Captures trade behavior
•   Captures org. resistance to change
•   Helps forecast new product sales/costs
       3 Market Test Methods
•   Pseudo Sale
     • Speculative ©
     • Simulated (Pretest markets)- PRESCREENING ©
Speculative Method: Where appropriate
 • Ind. firms have close r/ships
   with buyers
 • New product work is technical
 • Where there is little risk
   (other methods costly)
 • Patent exists, no rush,
   dev prod/ mkt together
 • Where item is new & key
   diagnostics are needed
                  Simulated Test Markets
•   Features
    * Respondents screened
    * Qualified people shown commercials
    * Participants "allowed" to purchase product
    * If not purchased then given free trial
    * Contacted later for evaluation of product
     (after usage period)
•   Advantages
    * Short time span (18-24 weeks)
    * 5%- 10% of cost
    * Confidential
    * Degree of accuracy on par for some aspects
    * Various marketing mixes can be tested
•   Disadvantages
    * Not highly precise results
    * No competitive reactions
    * No measure of trade response
    * Product must fit into existing cat.
    * Not useful for small share situations
    * Assumes market variables e.g. awareness
          3 Market Test Methods
•   Pseudo Sale
      • Speculative
      • Simulated (Pretest markets)- PRESCREENING


• Controlled Sale
      •   Informal Selling
      •   Direct Marketing
      •   Mini-markets
      •   Scanner Markets ©
         Scanner Markets
•   BehaviorScan –offered by IRI
•   Uses 8 cities, pop. 100,000
•   Uses electronic equip on TV's
•   Panels of 1,000 families
    * who record media exposure
    * make all puchases at Behaviorscan store
    * use plastic card id. family
•   Company gets:
    * full record of all print media
    * family by family purchases
    * complete record of 95% of groceries
     from check out scanners in stores
            Market Test Methods
•   Pseudo Sale
      • Speculative
      • Simulated (Pretest markets)- PRESCREENING


•   Controlled Sale
      •   Informal Selling
      •   Direct Marketing
      •   Mini-markets
      •   Scanner Markets (Roll-out of product)

• Full Sale (Conventional)
            • Limited Marketing
            • By Application
            • By Geography
      What else do we test?
• Product
• Packaging
• Name
     PHYSICAL PRODUCT
          TESTING
• Laboratory tests
• Expert evaluation (Alpha/Beta tests)
• Consumer tests
  – Single product evaluation
  – Blind tests (New Coke)
  – Experimental variations
          Packaging Concerns
•   Protection
•   Economy
•   Convenience
•   Promotional
•   Testing
    –   Engineering tests
    –   Visual tests
    –   Dealer tests
    –   Consumer tests
              Brand Naming
• Suggest something about product benefits

• Suggest product qualities

• Easy to pronounce, remember, recognize

• Should be distinctive
         Business Analysis
• Revenue Forecasts

• Preliminary Marketing Plan

• Cost Estimation

• Profit Projections

• Other Considerations
4 Commercialization Issues
 •   When (Timing)
 •   * First Entry
 •   * Parallel Entry
 •   * Late Entry

 •   Where (Geographical Strategy)
 •   *   Single Locality
 •   *   Region
 •   *   Several Regions
 •   *   National Market
 •   *   International

 •   To Whom (Target–Market)
 •   *   Early Adopters
 •   *   Heavy Users
 •   *   Opinion Leaders( favorable)
 •   *   Low Cost to reach

 •   How (Intro Strategy)
        COMMERCIALIZATION
The Marketing Plan
  – Complete marketing strategy
  – Responsibilities for execution
  – Cross – functional approach

Monitoring and Control
  – Real – time tracking
  – Role of the Internet
  – Include product performance metrics with
    performance targets

				
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posted:10/29/2011
language:English
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