C HAPTER – III PRODUCT/SERVICE ANALYSIS 1 Dr. BALAMURUGAN MUTHURAMAN

Product research is defined as marketing research that yields information about desired characteristics of the product or service. The characteristic of a good or service that will satisfy a recognized need or want, is usually identified. It implements the data collection process, analyzes the results and gives the findings and their implications. Dr. BALAMURUGAN MUTHURAMAN 2

N EW P RODUCT R ESEARCH P ROCESS Generation of new product concepts Evaluation and development of those concepts Evaluation and development of the actual products Testing in the context of the marketing program Dr. BALAMURUGAN MUTHURAMAN 3

N EW P RODUCT R ESEARCH (C ONTD.) Need Identification Perceptual maps Social and environmental trends Benefit structure analysis Product users Focus-group interviews Lead user analysis Concept Identification Dr. BALAMURUGAN MUTHURAMAN 4

Perceptual Maps Marketing research technique in which consumers views about a product are traced or plotted (mapped) on a chart. Respondents are asker questions about their experience with the product in terms of its performance, packaging, price, size, etc. Theses qualitative answers are transferred to a chart (called a perceptual map) using a suitable scale (such as the Likert scale), and the results are employed in improving the product or in developing a new one. Dr. BALAMURUGAN MUTHURAMAN 5

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Benefit Structure Analysis BSA determines what specific benefits and characteristics are desired by consumers for a particular product or service. It identifies perceived deficiencies in what is currently provided. Lead user analysis Leading buyers who are the early adopters of new methods, products, and technologies. Their needs and choices usually portend the needs and choices of the general market, and provide significant opportunities for introduction of innovative products. Dr. BALAMURUGAN MUTHURAMAN 7

C ONCEPT E VALUATION A ND D EVELOPMENT Use Testing Blind use test A blind or blinded experiment is a test or experiment in which information about the test that might lead to bias in the results is concealed from the tester. If both tester and subject are blinded, the trial is a double-blind trial. For example, when asking consumers to compare the tastes of different brands of a product, the identities of the product should be concealed – otherwise consumers will generally tend to prefer the brand they are familiar with. Similarly, when evaluating the effectiveness of a medical drug, both the patients and the doctors who administer the drug may be kept in the dark about the dosage being applied in each case. Predicting Trial Purchase Pre-test Marketing Dr. BALAMURUGAN MUTHURAMAN 8

Test Marketing Designing the sell-in market test Selecting the test cities Implementing and controlling the test Timing Measurement Costs of a test market Dr. BALAMURUGAN MUTHURAMAN 9

P RICING R ESEARCH One of the hardest decisions an organization has to make is how to price its products. Price a product too low and you may not cover your costs or generate profits. Price the product too high and potential customers never turn into paying customers. Methods used for pricing Gabor and Granger method Multi-brand choice method Research for Profit-oriented Pricing Research for Sales-oriented Pricing Dr. BALAMURUGAN MUTHURAMAN 10

The Gabor Granger method is a method to determine the price for a new product or service. It was developed in the 1960s by Clive Granger and André Gabor. Widely recognized and used in the marketing science industry is the Gabor-Granger approach. It is a convenient and practical pricing technique to determine the highest price a respondent is willing to pay for a given product. Dr. BALAMURUGAN MUTHURAMAN 11

Marketing of two or more similar and competing products by the same firm under different and unrelated brands. While these brands eat into each others' sales, multi-brand strategy does have some advantages as a means of (1) obtaining greater shelf space and leaving little for competitors' products, (2) saturating a market by filling all price and quality gaps, (3) catering to brand-switchers users who like to experiment with different brands, and (4) keeping the firm's managers on their toes by generating internal competition. 12 Dr. BALAMURUGAN MUTHURAMAN

A profit-oriented pricing strategy involves setting prices for your products that will guarantee you'll make money on each sale. You determine your cost for manufacturing each product, then add a percentage for profit. There are some strategies and issues you should review before setting prices in this manner. While profits are the goal of any business, setting prices based on profit goals can present some problems for your business. They feel that the overall pricing objective should be based on using a sales orientation. This philosophy is based on the idea that increasing sales will provide a better financial position than increasing profits Dr. BALAMURUGAN MUTHURAMAN 13