BA 590 New Product Development and Sales

PlaceProductPricePromotion Brand Type of Brand: Individual or family Manufacturer or dealer Product Idea Physical good/service Features Quality level Accessories Installation Instructions Product line Warranty None, full, or limited Package Protection, Promotion, or both Target Market 8-3 Exhibit 8-1 Defining “Product”

Exhibit 13-7 Time The Adoption Curve Percent Adoption Innovators (3-5%) Early Adopters (10-15%) Early Majority (34%) Late Majority (34%) Laggards/ Nonadopters (5-16%)

The Adoption Curve Innovators: First to Adopt, Eager to Try Young, Well-Educated, Mobile Seek Info from non-salesperson Sources Early Adopters Opinion Leaders Greater Contact with Salespeople Word-of-Mouth

The Adoption Curve Early Majority: Avoid Risk, Try Only if Others Have Usually are Not Opinion Leaders Late Majority: Cautious About New Ideas, Older and More Set in Their Ways More Subject to Peer Pressure

The Adoption Curve Laggards: Suspicious of New Ideas Do Things the Way that They Have Always Been Done

The Product Life Cycle 9-3 Exhibit 9-1 Total Industry Profit + – $ 0 Market Introduction Market Growth Market Maturity Sales Decline Time Total Industry Sales

Defining Product High Physical Good Emphasis Nails, Soup Medium Physical Good Emphasis/Medium Service Emphasis: Restaurant Meal, Automobile Tune-up High Service Emphasis: Financial Services, Hair Cut, Postal Service

Consumer Product Classes Convenience Specialty Unsought Shopping 8-4 Consumer Product Classes

Product Lines Product Assortment: All Products and Product Lines in a Firm Product Lines: Individual Products that are Closely Related Individual Products: Particular Products in a Product Line

Oakley Product Assortment

Oakley Product Line

Individual Product

3-Minute Drill Identify a New “Individual Product” or “Individual Service” that is Part of an Existing Product Line. Explain Why it Would be Successful Example: Kodak has a Product Line of Disposable Cameras. A Possible New “Individual Product” Would be a Disposable Digital Camera. 1-5

The Product Life Cycle 9-3 Exhibit 9-1 Total Industry Profit + – $ 0 Market Introduction Market Growth Market Maturity Sales Decline Time Total Industry Sales

Introducing New Products Managing Mature Products Future Adaptation New Markets Dying Products Budget / Rate of Growth Persuasion / Less Profit New or Improve? New Strategies Phase Out Focus: Planning for Life Cycle Stages 9-4

Idea Generation Ideas from: Customers and users Marketing research Competitors Other markets Company people Middlemen Screening Strengths and Weaknesses Fit with objectives Market trends Rough ROI estimate Idea Evaluation Concept testing Customer reactions Rough estimates of cost, sales, profits Development R & D Develop model or service prototype Test marketing mix Revise plans as needed ROI estimate Commercial -ization Finalize product and marketing plan Start production and marketing “Roll out” in select markets Final ROI estimate 9-5 Exhibit 9-4 New-Product Development Process

Long-Run Consumer Welfare Immediate Satisfaction Desirable Products Pleasing Products Salutary Products Deficient Products High Low High Low Types of New Product Opportunities 9-6 Exhibit 9-5

Key Issues Top Level Support Market-Guided R & D Authority 9-7 New-Product Development Management

Total Quality Management Cost of Defects Empowerment Continuous Improvement Customer Focus Management Leadership and return on quality Quality tools, benchmarking, and the like TQM 9-8

NPD At Briggs and Stratton Are There Any Advantages to Holding Off International Distribution of the Quattro Engine? What Does Maturity in the Mower Market mean for B & S? Should B & S Develop Their own Line of Lawn Mowers?

Promotion Sales Promotion Personal Selling 1-5

Exhibit Basic Promotion Methods Target Market Target Market Price Promotion Place Product Sales Promotion Sales Promotion Personal Selling Personal Selling Publicity Advertising Mass Selling Mass Selling

Exhibit 13-2 Aimed at middlemen Price deals Promotion allowances Sales contests Calendars Gifts Trade Shows Meetings Catalogs Merchandising aids Aimed at final consumers or users Contests Coupons Aisle displays Samples Trade shows Point-of-purchase materials Banners and streamers Trading stamps Sponsored events Aimed at company’s own sales force Contests Bonuses Meetings Portfolios Displays Sales aids Training materials 13-4 Sales Promotion Activities

0 Price Quantity D 0 Price Quantity 0 Price Quantity D2D2 D1D1 D D D B. to the rightA. To be more elasticC. Both to the right and more elastic 13-8 Promotion and the Demand Curve

Exhibit 13-4 Feedback ReceiverDecoding Message channel EncodingSource Noise The Traditional Communication Model

Encoder Decoder Common frame of reference The same message may be interpreted differently by the encoder and the decoder Message Interpretation

Push-Pull Strategies Exhibit 13-6 Wholesaler Promotion Push Wholesaler Promotion Push Retailer Promotion Push Final Consumer Pull Business Customer Pull Promotion to Business Customers Promotion to Final Customers Promotion to Channel Members Producer’s Promotion Blend Personal Selling, Sales Promotion, Advertising, Publicity 13-13

Setting the Promotion Budget Task Method! Uncommitted Resources? Per Unit? Match Competitors? Percentage of Sales? 13-15

Exhibit 14-1 Sales Promotion Mass Selling Personal Selling Target Market Price Promotion Place Product Personal selling techniques Compensation and motivation approach Selection and training procedure Number and kind of salespersons needed 14-3 Strategy Planning for Personal Selling

Supporting Order-Taking Order-Getting 14-4 Basic Sales Tasks

Order Getting Establishing Relationships with New Customers and New Businesses Order Taking Sell to Regular or Established Customers, Complete Most Transactions, Maintain Relationships Supporting Missionary and Technical Specialists

Supporting Order-Taking Order-Getting 14-4 Basic Sales Tasks

Types of Sales Presentations Prepared Sales Presentation Memorized Presentation for All Useful for Quick Training, Lower Skill Levels Consultative Selling Approach Understanding the Customer’s Needs Before Attempting to Close Acts as a Consultant to Identify and Solve the Customer’s Problems

Types of Sales Presentations Buying Formula Approach Starts With Prepared Presentation Approach Leads Customer Through Logical Steps Final Close

Exhibit 14-3 Evaluate needs of established customers Prospect for new customer Set effort priorities Select target customer Preplan sales call and presentation(s) Make sales presentation Close sale Follow up to establish Follow up to maintain Feedback 14-8 Steps in the Personal Selling Process

Questions What Strategy Decisions are Needed in the Personal Selling Area? Why Should the Marketing Manager Be Involved?

Major Accounts Telemarketing Sales Territory Sales Force Size Large Customers Quick, Inexpensive Geographic Area Work Load Focus: 14-5 Salesforce Structure

Key Components Job Description Level of Compensation Method of Payment Training 14-7 Selecting, Training, and Motivating

Compensating and Motivating Two Basic Decisions Level of Compensation Method of Compensation Method Of Compensation Straight Salary Straight Commission Combination Plan

14-9 Consultative Selling Approach Selling Formula Approach Prepared Approach Three Presentation Approaches Types of Presentation Approaches

Types of Sales Presentations Prepared Sales Presentation Memorized Presentation for All Useful for Quick Training, Lower Skill Levels Consultative Selling Approach Understanding the Customer’s Needs Before Attempting to Close Acts as a Consultant to Identify and Solve the Customer’s Problems

Types of Sales Presentations Buying Formula Approach Starts With Prepared Presentation Approach Leads Customer Through Logical Steps Final Close

Branding Rejection Nonrecognition Recognition Preference Insistence Change Position Increase Awareness Continue Education Maintain Availability Develop High Brand Equity Focus: 8-6

What Kind of Brand to Use? Generic Family Brand Individual Brand Branding Choices Manufacturer Dealer ? ? ? ? ? ? ? 8-7

Convenient packages are easier to use, making purchase decisions easier for the customer as well. 8-8 The Strategic Importance of Packaging

A warranty says the company stands behind the product. Consumers often feel more comfortable with products they know come with assurances. Warranty 8-9 Using Warranties to Improve the Marketing Mix