Marketing Mix

Product

anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need

Continuous/ Incremental Innovation

requires no new learning by consumers

eg. better razor, new car model, iphone 13

marketing strategy: increase awareness and distribution

Dynamically Continuous innovation

• disrupts consumer’s normal routine but does not require totally new learning

• eg. electric toothbrush, CD player, automatic camera flash

• marketing strategy: advertise point of difference and benefits

Discontinuous aka Breakthrough Innovation

• requires new learning and behaviors

• eg. wireless router, digital video recorder, electric car

• marketing strategy: educate consumers through product trial and personal selling

New product Development

• about 80% of new products fail/ dramatically underperform

• why?

  • Overestimate market, underestimate costs (planning fallacy)

  • incorrectly positioned, priced, branded, or advertised

  • competition

New Product Development Process

1. Idea Generation

2. concept and development testing

3. marketing strategy development

4. business analysis

5. product development

6. market testing

7. commercialization

Idea generatiion

Internal Sources

• research and development departments

External sources

• competitors (Hydrox and Oreo cookies)

• outsourcing (Ideo)

Screening ideas

R-W-W

• is it real (address a real need?)

• can we win (sustainable competitive advantage?)

• is it worth doing (sufficient profit potential?)

2. concept development and testing

• expand ideas into more complete product concepts

• describe features the product should have and benefits those features will provide

• test different concepts with target customers

3. Marketing strategy development

develop a marketing strategy that can be used to introduce the product to the marketplace

• identify the target market

• estimate its size

• determine how the product can be positioned

• plan pricing, distribution, and promotion expenditures necessary for roll-out

4. Business analysis

Is there a business case for it? Need to consider:

• projected sales, costs, profits

• company’s objectives

• company’s capabilities 

5. product development

• work with engineers to refine the design and production process

• develop one or more prototypes

• evaluate prototypes with prospective customers

6. Market testing

try out the complete marketing plan (product, price, place, and promotion) in a small geographic area that is similar to larger target market

reduces uncertainty, but comes with tradeoffs

• expensive

• takses time

• competitio can see what you’re up to