Understanding the Marketing Mix and New Product Development

4 P's of marketing

Product, Promotion, Price, Place (Distribution)

Importance of marketing mix

It helps businesses create a strategy to reach their target audience.

Three levels of a product

Core Benefit, Tangible Product, Augmented Product

Product mix

design mix packaging name log trademark and function

Four types of consumer goods

Convenience Goods, Shopping Goods, Specialty Goods, Unsought Goods

Three naming strategies

Family Brand, Separate Family Name, Individual Brand Names

Four elements of the promotion mix

Advertising, Sales Promotion, Public Relations (PR), Personal Selling

Seven types of advertising

Newspaper, TV, Magazine, Direct Mail, Radio, Outdoor, Internet

Goal of sales promotions

To encourage immediate purchases with short-term incentives.

Examples of public relations

Press releases, product placement in movies, sponsored events

Five steps in the personal selling process

Prospecting, Pre-Approach, Sales Presentation, Handling Objections, Closing

Five characteristics of services

Intangibility, Labor-Intensive, Variability in Quality, Simultaneous Production & Consumption, No Inventory

Eight stages of the new product development process

Idea Generation, Idea Screening, Concept Development, Marketing Strategy, Business Analysis, Product Development, Test Market, Commercialization

Idea Generation stage

Brainstorming new product ideas.

Sources of new product ideas

Consumers, Employees, Competitors, Technology, R&D

Example of Idea Generation

Pillsbury Bake-Off, where consumers submit new baking recipes.

Idea Screening

company screens ideas to determine if there feasible and eliminate some ideas

Three types of screening

Judgment Screening, Preliminary Marketing Screening, Preliminary Consumer Testing

Example of an idea that would fail screening

Flying cars (too expensive, unrealistic technology).

Concept Development

company conducts multi-dimensional scaling to see where the product would fit in the company

Tool used to analyze concept development

Multi-dimensional scaling (compares products).

Example of Concept Development

McDonald's testing if customers see them as similar to Burger King or KFC.

Marketing Strategy stage

Developing a detailed plan for the 4 P's (Product, Price, Promotion, Place).

Included in the marketing strategy

how are you going to package, promote, name and price

Business Analysis stage

evaluate if its profitable and estimate sales. Determine if the sales coming from your other products

Cannibalization in marketing

When a new product takes sales away from an existing product.

Example of Business Analysis

If Energy Wheaties reduces regular Wheaties sales, it may not be profitable.

Product Development stage

A prototype is created and tested.

Two types of testing in Product Development

Functional Tests (does it work?) & Consumer Tests (do people like it?).

Example of Product Development

Apple testing new iPhone prototypes before mass production.

Test Market stage

A small-scale launch of the product in select cities.

Pros of a Test Market

Real-world feedback, identifies potential problems.

Cons of a Test Market

Expensive (~$1M per test), takes too long, competitors can copy.

Example of Test Market

McDonald's tested pizza in select cities, but it failed.

Commercialization stage

Full-scale product launch.

Two commercialization strategies

National Launch (everywhere at once), Rollout (gradual release in regions).

Example of a Rollout Strategy

The Impossible Burger was first launched in California before expanding nationwide.

Reasons why new products fail

Small market, poor brand fit, lack of retailer support, poor forecasting, competition response.

Examples of failed products

Edsel (Ford) - Market changed before it launched. Heinz green ketchup - Kids liked it, but parents didn't rebuy.