MArketing 300

Explain how the new product development process improves the odds of new product success

1. Idea generation

• Branstoriming many ideas often from customer or market trends

2. Idea screening

• Filtering out bad ideas early to focus only on promising ones

3. Copncept testing

• Getting feedback from target customers before development 

4. Product development 

• Creating and refining a prototype or model

5. Market testing 

• Releasing the product in a limited market to measure real world application

6. Commercialization 

• Launching the product with full marketing supp

Explain how the relationship between sales and profit changes in the PLC over time:

How the Relationship Between Sales and Profit Changes in the Product Life Cycle (PLC)

Summary Version:

• Early on: High costs, low profits (maybe even losses).
  
  

• Growth: Profits rise as sales explode and costs spread out.
  
  

• Maturity: Profits flatten and then start slipping as competition heats up.
  
  

Decline: Profits fall sharply as sales drop and brands cut back

DEMONSTRATE the difference between a new product (FTC) and a product improvement. How is the latter used to extend the PLC?

Difference Between a New Product (FTC) and a Product Improvement

• The Federal Trade Commission (FTC) defines a "new product" as one that is either entirely new to the market or has been changed significantly in function or form — and it can only be called "new" for 6 months.
  

• FTC “New Product” = Major change to function or form (new design, new tech)
  
  

Product Improvement = Enhances features, but the core product stays the s

1. Explain the value of IMC

• Integrated marketing communications (IMC) means coordinating all promotional tools (advertising, social media, PR, personal selling ETC) to deliver ONE clear consistent message across all channels 

Explain how you would use a push strategy Vs a pull strategy to promote your brand?

Push Strategy (Push the product to the customer):

• You focus on getting your product in front of customers through intermediaries like retailers, wholesalers, or direct sales teams. You're "pushing" the product down the distribution channel.

  Pull = make people want your product so much they go looking for it.

  
  

• Describe the most common budgeting method and explain the disconnect as to why it is not the most preferred by brand managers 

• The most common budgeting method in marketing is the percentage-of-sales method.

• the most common is basing it on a percentage of sales or projected sales, this is not smart because it does not address problems, e.g. sales are low because of poor advertising and now less money is being spent on advertising making the problem worse

Preferred method 

• Task method: focuses on determining the specific promotion objectives and tasks required to achieve them and then allocating the budget accordingly 

• Three main promotion objectives are:integrated marketing communications

• Informing 

• Educating potential customers about the products features benefits and availability. This isd particularly crucial during the introduction stage of the product life cycle

• Persuading

• Convincing customers to choose the companies product over competitors offerings. This becomes more important as the market matures and competition intensifies

• Reminding

• Keeping the product in customers minds and reinforcing brand loyalty. This is relevant for mature products and during the decline stage when the goal may be to maintain existing customers

 encoding and decoding

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Decoding (what the audience does):

This is when the consumer interprets the message based on their own background, experiences, and understanding.

Encoding (what the marketer does):

This is when the marketer creates a message they want to send to the audience. It involves choosing the right words, images, tone, and channel to convey the brand’s idea.

Product advertising

• Product advertising seeks to sell a specific product 

A Coca-Cola commercial that promotes Coke Zero Sugar as “just as good as the original” targets that exact product.

Pioneering advertising

• Used in the early stages of the product life cycle to develop primary demand for a product category 

• Apple’s original iPhone launch ad explaining what a smartphone can do — because most people hadn’t used one before.

• Competitive marketing 

• Can be direct, aming for immediate buying action or indirect, amiing to influence future buying decisions

• Pepsi ad comparing its taste directly to Coca-Cola’s.

• Verizon ads showing better 5G coverage than competitors — trying to convince buyers to switch

• Reminder advertising

• Used to keep the products name before the public when the product has achieved brand preference or insistence often in market maturity or sales decline stage. THus type of advertising style serves to reinforce previous promotion 

• M&M’s “Melts in your mouth, not in your hands” ads — they’re not selling something new, just reminding you they’re still around and loved.

• Institutional advertising

• Promotes an organization's image, reputation, or ideas rather than a specific product. 

• Nike’s “Just Do It” campaign with social justice messaging — not promoting shoes, but the brand’s identity.

• A bank ad that highlights its commitment to sustainability and local communities, rather than promoting a checking account.

Deception

A false or misleading claim that can influence a consumer’s decision.

 Illegal in commercial advertising. The FTC can take action.

Puffery

A subjective, exaggerated, or vague claim that no reasonable person would take as fact.

Legality: Legal, because it’s considered opinion, not a factual statement.

Native Advertising:

A form of paid media where the ad is designed to match the look, feel, and function of the platform it appears on.
It blends in with regular content, often appearing as an article, video, or post, and is less intrusive, aiming to provide value and relevance to the viewer.

Example:
A "sponsored post" on Instagram that looks like a regular influencer post or a BuzzFeed article titled “10 Ways to Stay Healthy” sponsored by a fitness brand.

Paid Media

Media exposure that a brand pays for to reach an audience.

Earned Media

Free publicity gained through word-of-mouth, public relations, or customer actions—not directly controlled by the brand.

 Owned Media

Channels and content that the brand creates and controls.

• Paid = You pay to promote
  
  

• Earned = You earn attention organically
  
  

• Owned = You own the platform

Astroturfing:

Creating fake online reviews or social media posts to fabricate positive sentiment

• Explain how PR can be used to extend an advertising budget

• PR can create stories, events, or viral moments that spark conversation and sharing on social media.

• This drives engagement at little or no cost, helping your ad dollars go further by keeping the brand in public conversation

•  Explain when direct distribution is the better choice when indirect distribution should be used

• Direct distribution allows a skincare brand to maintain full brand control and receive direct feedback from customers.

Indirect Distribution – Definition & When to Use It

Definition:

A channel strategy where the producer uses intermediaries (like wholesalers, retailers, or agents) to move products to the final customer.Example:
A snack company using supermarkets and convenience stores to get on more shelves faster.

• why use multiple channels even though they are more difficult to manage

• Reach more customers. Some customers prefer brick and mortar while some may prefer to shop online

Explain how product classes affect “place” decisions and how “place” changes as brands mature.

• Product Class = How consumers shop for the product:

• Convenience Products → Need widespread distribution (e.g., candy, soap)

• Shopping Products → Use selective distribution (customers compare)

• Specialty Products → Use exclusive distribution (limited availability)

• Describe the differences between horizontal and vertical conflict and between horizontal and vertical arrangements. What are the legal implications of each?

Horizontal Conflict

• Conflict between firms at the same level of the channel (e.g., two retailers or two wholesalers)
  
  

• Example: Two dealers undercut each other’s pricing
  
  

🔹 Vertical Conflict

• Conflict between firms at different levels (e.g., producer vs. retailer)
  
  

Example: A manufacturer sells directly to customers, bypassing retailersHorizontal Arrangement (illegal)

• Firms at the same level collude to fix prices or divide markets
  
  

• Example: Two retailers agree not to compete in certain areas
  
  

• Illegal under antitrust laws
  
  

🔹 Vertical Arrangement (sometimes legal, sometimes not)

• Manufacturer controls how intermediaries sell
  
  

• Exclusive dealing or price maintenance may be legal if it doesn’t reduce competition
  
  

Courts decide legality based on market power and consumer harm