PRODUCT DEVELOPMENT AND MARKETING CONCEPT Friday, November 19

Overview  No business’ decisions are more important than the decisions surrounding product development.  Analytical tools, such as Product Mapping, Marketing Opportunity Analysis or a Benefit Analysis are essential.

Product Mapping  Companies research:  What’s already on the market;  What consumers like and dislike about existing products;  And most importantly, what is missing.  This process is called Product Mapping.  Product mapping helps determine common characteristics among each product grouping.

 Product Surveys – A group of consumers comment on a collection of products and determine common factors they perceive.  Product maps instruct the product development team as to what product to make and what features to include.

Marketing Opportunity Analysis (MOA)  Also known as a situational analysis because it defines the various opportunities or market situations for a specific brand.  Composed of 3 distinct parts:  Overall Market;  Indirect Competition;  Direct Competition.

Overall Market  The MOA identifies the category under investigation that defines the brand.  The category is broad, ie. toothpaste.  If the marketer were preparing an MOA on toothpaste, you must list all brands on the market, including those of different packaging sizes.

Indirect Competition  MOA groups the competitive brands by features and each classification can be further simplified.  Indirect competition (ie. pudding competing with cake) can reveal possible marketing opportunities, but would only be pursued after exhausting all direct competition opportunities.

Direct Competition  Identifies all competitive brands that compete for a share of the same market.  Products are practically identical.  The researcher examines the MOA for gaps.  Ie. This could mean (a) the market is not large enough for more than one brand, or (b) there is an opportunity for a competitor.

Market Potential  The MOA can also help determine the market potential of a specific type of product.  This is calculated by multiplying the number of possible buyers (N) by the average selling price (P) and the average number of the item that each buyer purchases in a year (Q). MP = N x P x Q

Benefit Analysis  Any feature of a service or product should add utility and provide some benefit to the consumer.  Products should:  Solve consumer problems;  Add value.  A feature-benefit analysis connects each feature to utility and the benefit to the product.  A cost-benefit analysis is a comparison of the estimated costs of an action with the estimated benefits it is intended/likely to produce.

Questions…  Complete the ICE Activities for 5.5  # 1 (a), 2 (a) & 3 (a).