MKT501 tutorial 8 solution

1. Idea Generation-The first step in new-product development is idea generation. New

ideas can be generated by: Conducting marketing research to find out the consumers'
needs and wants. Inviting suggestions from consumers. Inviting suggestions from
employees. Brainstorming suggestions for new-product ideas. Searching in different
markets viz., national and international markets for new-product ideas. Getting
feedback from agents or dealers about services offered by competitors. Studying the
new products of the competitors. Idea screening-Most companies have an "Idea
Committee." This committee studies all the ideas very carefully. They select the good
ideas and reject the bad ideas. Before selecting or rejecting an idea, the following
questions are considered or asked: Is it necessary to introduce a new product? Can the
existing plant and machinery produce the new product? Can the existing marketing
network sell the new product? When can the new product break even? If the answers
to these questions are positive, then the idea of a new-product development is selected
else it is rejected. This step is necessary to avoid product failure. Concept testing-
Concept testing is done after idea screening. It is different from test marketing. In this
stage of concept testing, the company finds out: Whether the consumers understand
the product idea or not? Whether the consumers need the new product or not? Whether
the consumers will accept the product or not? Here, a small group of consumers is
selected. They are given full information about the new product. Then they are asked
what they feel about the new product. They are asked whether they like the new
product or not. So, concept testing is done to find out the consumers' reactions towards
the new product. If most of the consumers like the product, then business analysis is
done. Business analysis-Business analysis is a very important step in new-product
development. Here, a detailed business analysis is done. The company finds out
whether the new product is commercially profitable or not. Under business analysis,
the company finds out...Whether the new product is commercially profitable or not?
What will be the cost of the new product? Is there any demand for the new product?
Whether this demand is regular or seasonal? Are there any competitors of the new
product? How the total sales of the new product be? What will be the expenses on
advertising, sales promotion, etc.? How much profit the new product will earn? So, the
company studies the new product from the business point of view. If the new product
is profitable, it will be accepted else it will be rejected. Product development-At this
stage, the company has decided to introduce a new product in the market. It will take
all the necessary steps to produce and distribute the new product. The production
department will make plans to produce the product. The marketing department will
make plans to distribute the product. The finance department will provide finance for
introducing the new product. The advertising department will plan the advertisements
for the new product. However, all this is done as a small scale for Test Marketing.
Test marketing-Test marketing means to introduce the new product on a very small
scale in a very small market. If the new product is successful in this market, then it is
introduced on a large scale. However, if the product fails in the test market, then the
 company finds out the reasons for its failure. It makes necessary changes in the new
product and introduces it again in a small market. If the new product fails again the
company will reject it. Test marketing reduces the risk of large-scale marketing. It is a
safety device. It is very time-consuming. It must be done especially for costly
products. Commercialization-If the test marketing is successful, then the company
introduces the new product on a large scale, say all over the country. The company
makes a large investment in the new product. It produces and distributes the new
product on a huge scale. It advertises the new product on the mass media like TV,
Radio, Newspapers, and Magazines, etc. Review of market performance-The
Company must review the marketing performance of the new product. It must answer
the following questions: Is the new product accepted by the consumers? Are the
demand, sales and profits high? Are the consumers satisfied with the after-sales-
service? Are the middlemen happy with their commission? Are the marketing staffs
happy with their income from the new product? Is the Marketing manager changing
the marketing mix according to the changes in the environment? Are the competitors
introducing a similar new product in the market? The company must continuously
monitor the performance of the new product. They must make necessary changes in
their marketing plans and strategies else the product will fail.
2. Product idea: the product idea is the initial stage in the development process of a
product. Usually, the research and development team of any company along with its
management team, nourishes different ideas of developing the various products and
then finally fixes on one particular idea. Sources of the product idea can be internal
like, by scientists, engineers, designers, sales person etc. Also, the consumer can
equally helpful in developing product idea, by giving a clear idea of their demands.
Engaging marketing research by a company will be helpful to them while developing a
product idea. Product Concept: Product concept is one of the important marketing
concepts. It believes that consumers mostly favor those products that offer the high
quality level, performance and unique as well as innovative features. Companies
which have the faith in product concept, is totally engaged in making quality products
and improving them. A photograph or diagram that depicts a good being offered for
sale. Several product image types taken from different angles and blow ups are often
used extensively by businesses that market their goods in online advertising and e-
commerce websites to attract customer interest and purchases. An image enhances the
product description which makes it appealing for the visitors of the eStore.
3. Customer centric product development ensures: High satisfaction among customers.
Because the product was made according to the customer demands and needs, it would
satisfy them more as compared to another product which might not be directly used by
the customer. Increase in customer loyalty. It is very important for any company to
follow customer- centered, team-based, and systematic approach during development
of new product. It has been found that around 90% of the new products get failed as
they do not able to fulfill the needs of the customers. In order to overcome these
problems, the companies need to develop a customer-centered approach. A product
should be developed in such a manner that it fulfills the expectations of the customers.
4. Sales decline for many reasons, including technological advances, shifts in consumer
tastes, and increased competition. Management may decide to maintain its brand,
repositioning or reinvigorating it in hopes of moving it back into the growth stage of
the product life cycle. The decline stage in the product life cycle is when a product
dissolves as a result of decreased or negative growth. It is a result of lower demand,
which ultimately results from new inventions and technology advancements.