JUNE 2009 EXAMINATION DMM08 PRODUCT MANAGEMENT by jdo18246

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									                           JUNE 2009 EXAMINATION
                                   DMM08
                             PRODUCT MANAGEMENT

Time: Three Hours                                                    Maximum Marks:100

Note: The paper is divided into two sections. Section A and Section B. There are seven
questions in Section A. Students are required to attempt four questions from Section A
and Section B is compulsory. Each question carries 20 marks.

                                        SECTION – A

1. What is the main difference between a Product and a Brand? Where is a product made?
   Where is a brand made?                                                         (20)

2. (a) What are the principal criticisms of the product life cycle as an operationally useful
       constraint?
   (b) What is a dominant design and when is it most likely to appear during a product life
       cycle?                                                                        (10+10)

3. (a) What is the fundamental principal of pricing?
   (b) How can consumer value and producer costs be integrated to influence product design
       and product cost?                                                          (10+10)

4 (a) Contrast the purpose of concept and product tests.
  (b) What are the pros and cons of blind product tests?                                (10+10)

5 (a) What is the purpose of test market? Can a national rollout be test market? Explain
  (b) Describe the steps in a simulated test market and the information that would be collected
      at each step.                                                                    (10+10)

6. What do you understand by product positioning? What is the need for positioning in today’s
   marketing scenario? What are the elements of positioning? Suggest various strategies for
   product positioning.                                                                  (20)

7. Discuss the importance of tracking preference, satisfaction, awareness and distribution of
   product.                                                                              (20)

                                        SECTION – B

8. CASE STUDY : Marketing Apple’s IPOD: Music to Your Ears

   Whether it starts with a dream, an idea, or a thought the road to marketing success is often
   long and requires research, planning, product alterations, and creative contemplations, which
   makes it all the more rare to witness the success of the iPod, the brainchild of Apple founder
   Steve jobs, who got his product designed, built and on shelves in less than a year. The cool
   product of choice for listening to and trading the latest sounds, the iPod has expanded to
various models that music enthusiasts have quickly bought up during its brief existence.
Furthermore, its introduction and subsequent acceptance has spawned an entire industry
comprised of companies that market compatible accessories. Despite some initial problems
with its battery life, the product is going strong, driving the majority of Apple’s revenue
growth. iPod thus is a prime example of successful marketing.

The Product Concept
Launched in October 2001, iPod was the first portable music player with the capability to
download and store thousands of songs digitally. Its sales have reached over 4 million per
year. The concept started off in response to consumer wants and in an environment that was
ready for a product that would change the tide in the practice of pirating digital forms of
music. Jobs saw the need for a good quality player that would allow its user to legally
download and customize their music and to trade songs. In less than three years, his
invention had already been termed” a cultural phenomenon” by Brandweek magazine.

This is not to say the road to success was without hurdles. Jobs had to persuade the major
music labels to allow their artists’ songs to be downloaded for 99 cents each, or about $9.99
per album. After being burned by sites like Roxio’s Napster, which allowed peer-to-peer
downloading for free, the music industry was hesitant to open its doors to such a proposal.
Jobs sold the idea to the recoding industry by making sure it would get its cut and relying on
his credibility as a well-known name in computers and the head of Pixar Animation Studios.
iPod owners would purchase songs via Apple’s iTunes Music Store software, accessed
through the iMac. The concept represented a cultural change for how people would access,
purchase, and listen to music. The support of the industry soon became overwhelming;
iTunes now offers more than 1 million tracks, representing major music labels and 600
independents.

Making it Happen
Being first in the market with a very desirable product meant jobs was able to command
upward of $400 for the 40GB (10,000 songs stored) iPod model. More than 1,000
accessories have been rolled out, including car adaptors, custom carrying cases, and home
speakers.

When other companies realized the power of the iPod, they began co-branding with Apple so
that they could get a piece of the action. Hewlett-Packard, Bose, Volkswagen of America,
and BMW – which built adaptors into some of its cars’ stereo systems – are just a few
examples. Other smaller companies marketed iPod accessories, allowing Apple to extend the
iPod’s reach even further in the retail market. Even U2 got into the game, working with Apple to
offer an iPod specific to the band.

The iPod’s most distinguishing feature, according to Apple’s advertising agency, was the white
cord that connects the player to the earphones and that identifies iPod users as they go about
their daily business, whether that means walking across campus, dancing down the sidewalk,
or driving in their BMWs. Anyone can spot a member of the iPod “club”. The introductory
multimedia advertising campaign therefore focused on a simple, silhouetted dancing figure
with a highlighted iPod and earphones.
Apple has a new iPod, which in addition to playing 15,000 songs and displaying 25,000
photos on a 2.5-inch color screen, can play videos. Customers can purchase music videos,
short films from Pixar Animation, and TV shows like Desperate Housewives and Lost.
There is concern among some network affiliates that this “off TV” viewing will hurt ratings
and this certainly may ultimately be true, but the video iPod is an example of the paradigm
shift that has been developing.

The Future
The iPod has been such a success that some industry analysts claim Apple would be better
off as a marketer of entertainment and consumer electronics rather than a computer company.
As CEO, job has a reputation in the marketplace for his creative genius and for personally
seeing new products successfully from the initial idea to the product launch. He has been
credited with an uncanny ability to spot the next revolutionary innovation that will change
the landscape of the marketplace. That’s tough reputation to maintain. Will the company
morph into a small electronics marketer? Will it take a different direction in the not-so-
distant future? The answer depends on so many factors that it defies speculation. For the
time being. Apply will enjoy its recent successes and prepare for the next big thing.

Apple’s iPod commands an impressive share of the hard-drive based music player market,
hovering around 90 percent. However, iPod is seeing a few serious competitors from other
companies. Samsung’s Z5 and Sony’s new Walkman have earned some recognition and
sales. However, they have some of the same problems other portable players are running
into-there are not as many accessories for them as for iPod, their synchronization with the
computer to upload songs is not nearly as effortless, and their ease of use is still lagging
behind the simple language developed by Apple. Some analysts suggest that the mini player
sector will see more competition in the future as it becomes a casual market and price
competition begins. But they expect that iPod will still dominate the larger memory portable
player market. Its brand recognition is growing each year as more companies are co
branding their products to make iPod easier to use, cooler to own, and more visible than ever.

QUESTIONS:

1.     One critical factor that affects the market potential for a product innovation is the
   ability to offer a differentiated product that delivers unique and superior value to
   customers. Discuss the extent to which Apple successfully accomplished this with the
   iPod and with its subsequent introductions, like the iPod shuffle and the iPod nano.
           (6)
2.     How would you classify the iPod today in terms of its stage in the product life cycle?
   Why?                                                                                  (7)
3.     Provide a description of what you think each type of adopter would be for an iPod.
   Do you think we are seeing late majority adopters or laggards yet?                    (7)


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