Ppt New Prod Dev and Pricing Mktg

8/8/2019 Ppt New Prod Dev and Pricing Mktg

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NEW PRODUCT DEVELOPMENT


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New-Product Development Strategy

Two ways to obtain new products

Acquisition refers to the buying of a whole

company, a patent, or a license to producesomeone elses product

New product development refers to original

products, product improvements, productmodifications, and new brands developed fromthe firms own research and development


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New-Product Development Process

Major Stages in New-Product Development


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Idea Generation

Internal sources refer to the companys own

formal research and development,

management and staff, and intrapreneurial

programs

External sources refer to sources outside the

company such as customers, competitors,distributors, suppliers, and outside design

firms


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Idea Screening Identify good ideas and drop poor ideas

R-W-W Screening Framework:y Is it real?

y Can we win?

y Is it worth doing?


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Concept Development and Testing

Product idea is an idea for a possible product

that the company can see itself offering to

the market

Product concept is a detailed version of the idea

stated in meaningful consumer terms

Product image is the way consumers perceivean actual or potential product


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Concept Development and Testing

Concept testing refers to testing new-product

concepts with groups of target consumers


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Marketing Strategy Development

Marketing strategy development refers to the

initial marketing strategy for introducing the

product to the marketThis consists of three parts:

Part 1: target market, planned product positioning, sales and

profit goals

Part 2: price, distribution and marketing budget

Part 3: planned long run sales (timetable), marketing mix

strategy, contingency plans


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Business Analysis

- this will be the analysis and

evaluation of costs, sales, and

profits. If the product will satisfy the

companys objectives in terms of

saleability, and viability


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Product development

if the product passes the Business

Test, the company will then move to

developing more than one physical

versions of the product concept

(prototype)


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Test marketing

Test marketing is the stageat which the productand marketing

program areintroduced into morerealistic marketingsettings

Provides the marketerwith experience intesting the productand entire marketingprogram before fullintroduction


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Commercialization

Commercialization is the introduction

of the new product

When to launch

Where to launch

Planned market

rollout


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2nd P: PRICING

PRICE

the amount of money charged for a good or

service; more broadly, price is the sum of values

consumers exchanged for the benefits of having or

using a product or service.


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2nd P: PRICING

Rate- for rooms in hotelsFare for transportation services

Tips for extra services renderedToll price for using a special highway

Price may go by many names,

depending on the company or

product:


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2nd P: PRICING

FACTORS TO CONSIDER WHEN SETTING PRICE

1. Internal Factors

a. Marketing Objectivesb. Marketing Mix strategy

c. Costs2. External Factors

a. Nature of market and demand

b. consumer perception of price and valuec. analyzing the price-demand relationshipd. price elasticity of demand buyers are less price

sensitive if products are unique, hard to find, a prestige or

luxury brand, or when substitute products are non-existent

e. competitors price


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2nd P: PRICING

PRICING STRATEGIES1. Prestige pricing hotels and restaurants seeking to

position themselves as luxurious and elegant will enter

the market with a huge price that will support this position2. Market skimming pricing setting a high price when

the market is price insensitive3. Marketing-penetration pricing setting a low initial

price to penetrate the market quickly4. Product-bundle pricing combining products and

offering the bundled products at reduced price


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2nd P: PRICING

PRICING STRATEGIES5. volume discounts special rates or prices for large quantity

purchases

6. discounts based on time of purchase lower prices when the

demand is low (hotel rates during off-peak season) special discounted

rates on advance bookings (example: airline rates)

7. psychological pricing aspects like prestige, round figures and

ignoring end figures (ex.: quoting prices in US dollars give a sense ofprestige; pricing of 1.99 instead of 2.00)

8. Promotional pricing temporary pricing at lower figures for special

occasions (sale prices, festivity-based, etc)


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2nd P: PRICING

Special Pricing Consideration in the Hospitality

Industry:

The restaurant industry historically employ arule of thumb that the highest-priced entre

should be no more than 2.5 times as expensiveas the lowest-priced entre.


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Ppt New Prod Dev and Pricing Mktg