New Product Development and the Product Life Cycle

 
Order Description
“New Product Development and the Product Life Cycle” Please respond to the following:

Scenario text attachment has been uploaded for this request.
* From the scenario, analyze the goals, product, price, and promotion for the new product launch in each stage of the product life cycle. Recommend two (2) marketing tactics and strategies that the marketing intern should consider in order to increase product revenue over time. Provide rationale for your response.

From the e-Activity, imagine that your company is a smartphone manufacturer that is launching a new product. Recommend the approach that you would take in order to brand the new product. Determine the primary way in which you would convey the advantage of your company’s product versus the top retailers in the industry. Provide a rationale for your response. Note: You may create and / or make all necessary assumptions needed for the completion of this discussion.

eActivity
Use the Internet to research two to three (2-3) of the top smartphone manufacturers. Focus on the new smartphones that each company is rolling out. Be prepared to discuss.

“New Product Development and the Product Life Cycle” Please respond
to the following:
* From the scenario, analyze the goals, product, price, and promotion for the new
product launch in each stage of the product life cycle. Recommend two (2) marketing
tactics and strategies that the marketing intern should consider in order to increase
product revenue overtime. Provide rationale for your response.
From the e-Activity, imagine that your company is a smartphone manufacturer that is
launching a new product. Recommend the approach that you would take in order to
brand the new product. Determine the primary way in which you would convey the
advantage of your company’s product versus the top retailers in the industry. Provide a
rationale for your response. Note: You may create and I or make all necessary
assumptions needed for the completion of this discussion.
eActivity
Use the Internet to research two to three (2-3) of the top smartphone manufacturers. Focus on
the new smartphones that each company is rolling out. Be prepared to discuss.
MKT 500 WeekS Scenario: The Stages of the Product Life Cycle
Slide # Scene # Narration
Slide 1 Scene 1 MKT500_5_1_Ed-1: Hello, Samantha. How are
you this morning?
[Ed, Samantha — Ed’s Office] MKT500_5_1_Samantha-1: I’m doing fantastic.
Ed and Samantha meet in the I’m really excited about this project. I felt
morning to discuss the next steps energized after our meeting with Carl last week
in the tablet PC launch, when we presented our ideas for our branding
strategy.
MKTSOO_5_1_Ed-2: I’m glad to hear that! Ijust
left Carl’s office, and he had some valid
questions. The most important question for us to
consider next was, “Once we launch the new
tablet and enjoy the honeymoon period, what is in
store for Golds Reling in the years that follow?”
MKT500_5_1_Samantha-2: I see, so Carl wants
us to focus on the life cycle of the product next?
MKT500_5_1_Ed-3: Correct. As you may recall
from various Strayer marketing classes, the
product life cycle is a popular metaphor in
marketing to describe the evolution and duration
of a product in the marketplace.
MKT500_5_1_Samantha-3: Yes. I recall that the
stages within this life cycle are market
introduction, market growth, maturity, and
decline.
Sales and profits behave predictably during the
different stages, and the marketing actions that are
thought to be optimal during each stage are also
clearly prescribed.
MKT500_5_1_Ed-4: You’re absolutely right.
You’ll also recall; what occurs in each stage of
the product life cycle.
Click the stages of the product
life cycle to leani more about
each.
Market Introduction: During
this stage a company brings a
new product, including both
goods and services, into the
marketplace with heavy
marketing spending. Promotion
techniques used include
advertising, samples, coupons, et
cetera.
Strategically, prices might start
low, a strategy known as
penetration, but they often start
high in order to recoup
development costs, a strategy
known as skimming. The
company uses limited
distribution and sales are also
low.
Market Growth: This stage is
characterized by accelerated
sales, rise in profits, stronger
customer awareness, greater
distribution channel coverage,
and entry of competitors. The
company might be able to begin
increasing prices. Advertising is
intended to persuade customers
as to the brand’s superiority
compared to competitors.
Market Maturity: During this
stage the advertising continues to
persuade customers about the
brand’s relative advantages and
serves as a reminder to buy the
product; products may proliferate
to a fuller product line to satisfy
MKT500_5_1_Ed- 5: Click the stages of the
product life cycle to learn more about each.
MKT500_5_1_Ed-6:
Market Introduction: During this stage, a
company brings a new product, including both
goods and services, into the marketplace with
heavy marketing spending. Promotion techniques
used may include advertising, samples, and
coupons.
Strategically, prices might start low, a strategy
known as penetration, but they often start high in
order to recoup development costs, a strategy
known as skimming. The company uses limited
distribution, and sales are also low during marLet
introduction.
MKT500_5_1_Ed-7:
Market Growth: This stage is characterized by
accelerated sales, rise in profits, stronger
customer awareness, greater distribution channel
coverage, and entry of competitors. The company
might be able to begin increasing prices as the
product is accepted by the target market.
Advertising is intended to persuade customers as
to the brand’s superiority compared to
competitors.
MKT500_5_1_Ed-8:
Market Maturity: During this stage, the
advertising continues to persuade customers about
the brand’s relative advantages and serves as a
reminder to buy the product; products may
proliferate to a thller product line to satisfy more
segments of customers. There is more
competition; sales grow but profits decline,
typically because of pressures from competition;
strong competitors gain market share and weaker
firms begin to fall out of the marketplace; and the
product offerings of different firms often begin to
homogenize. Instead of reducing prices, the firms
should try to find new benefits, and either
increase, or at least maintain, current prices.
Slide 2 Interaction
MKT500_5_1_Ed-9:
more segments of customers.
There is more competition; sales
grow but profits decline; strong
competitors gain market share
and weaker firms begin to fall out
of the marketplace; and the
product offerings of different
firms often begin to homogenize.
Instead of reducing prices, the
firms should tn’ to find new
benefits and either increase, or at
least maintain current prices.
Market Decline: This phase is
characterized by declining sales
and profit. New products start
replacing older ones. The firm
may divest. harvest, or rejuvenate
the old product.
The lengths of product life cycles
vary a lot. The length of productcategory
life cycles tends to be
longer than those of individual
brands.
Market Decline: This stage is characterized by
declining sales and profit. New products start
replacing older ones. The firm may divest,
harvest, or rejuvenate the old product.
The lengths of product life cycles vary a lot. The
length of product-category life cycles tends to be
Longer than those of individual brands.
MKTSOO5LEd-1O: I also have a video here
with a bit more information about the product life
cycle.
Slide 3 Scene 1, cont.
[Ed, Samantha — Ed’s Office] r
Slide 4 Traditional Product Life Cycle
http://www.vouwbc.com/watch?
v=wYeXCeBZhjE
Slide 5 Scene 1. cont. MKT500SlSamantha-4: Thanks for that
summary of the stages of the product life cycle,
[Ed, Samantha — Ed’s Office] Ed. Thinking about the introduction stage, a
product such as ours needs a lot of promotions for
the launch.
MKT500_5_1_Ed-1 1: Exactly. We have to cut
through all of the clutter out there and make our
tablet the first one that customers think of when
they are considering their purchase. We have to
create good top-of-the-mind awareness, not just
spontaneous awareness.
MKT500_5_1_Samantha-5: Remind me again
of the difference between the two?
MKT500_5_1_Ed-12: Top-of-the mind
awareness is the first brand that a customer
thinks of when asked an unprompted question
about a particular product category. Companies
that are well known advertise heavily and have
attention-getting ads that tend to receive the
highest top-of-the-mind awareness scores in ad
tracking studies. I am sure that we can think of
some products that fall into this category. Let’s
think of some…
When I say, “gaming system”, what do you think
of?
MKT500_5_1_Samantha-6: Xbox. How about,
“foreign car”?
MKT500_5_1_Ed-13: BMW. I’ve got one:
“education”
MKT500_5_1_Samantha-7: (Laughing) Strayer
University What can you tell me about
spontaneous awareness?
MKT500_5_1_Ed-14: Well, spontaneous, or
unaided, awareness refers to the other brands a
customer thinks df when asked an unprompted
question about a particular category. For example,
when asked about cereal, a customer may first
think of Cheedos, so Cheerios would have top-of
the-mind awareness. However, the customer may
next think of Apple Jacks, meaning Apple Jacks
has spontaneous awareness.
For top-of-the-mind awareness, consider this
question, “When the need arises for a particular
service or product, what is the first thing, name,
company, or store that comes to mind?” Whether
it’s a person or a business, whoever pops into your
mind first has successfully achieved top-of-the
mind awareness.
The goal of PR, and all of marketing, is to park
your product in your customers’ minds right next
to the “need” button; this button rests right at the
top of their mind.
MKT500_5_1_Samantha-8: That makes perfect
sense! Can you explain a little more about the
purposes of top-of the mind awareness and
spontaneous awareness?
(Displayed on screen) (Display graph on screen)
H:g MKT500_5_1_Ed-15: Top-of-the-mind
awareness is an important purchase driver, but
spontaneous awareness is important for brand
—— recognition. whidh establishes a customer’s trust
Low
in the product and removes any associated risk
with making a purchase.
The more buzz about a product or service, the
more awareness exists. The more awareness
exists, the higher the probability of being in that
Low
Spontawcus Awareness
top-of-the mind position.
MKT5005lSamantha-9: So how can we here
at Golds-Reling go about creating buzz for our
new tablet launch?
MKT500_5_1_Ed-16: Creating buzz and
awareness is done by many things, such as an
Internet blog or website, usually all working
together synergistically.
Getting that label and moniker starts with
announcing to the world, usually announcing to
your particular target market, that you are in
business. We would do this with a press release
that’s sent to the media, handed out to prospects
and customers, or used as a direct-mail piece. We
could also post the press release on our website,
which has been a very effective form of
communication for us in the past.
MKT500_5_1_Samantha-IO: Yes, I remember
from my classes at Strayer University that top-ofthe-
mind awareness is often difficult to achieve
for a new product.
MKT500_5_1_Ed-17: Right. The primary
purpose of our advertising, PR, and social media
efforts will be to create top-of-the-mind
awareness.
DIL,on Inxvat:o,
(Display/igate on screen)
Here is a diagram that will help explain how
consumers adopt a new product. In addition to the
marketing actions underlying the product life
cycle, during these phases, marketers have also
developed a theory about what customers are
doing.
Marketers are of the opinion that when a new
product is introduced, the person to try it first
goes and shows it to others; the others appreciate
it, buy it. and then tell others. This word-of-mouth
(Displayed on screen)
Click the sections of the
Diffusion of Innovation figure to
learn more about each group.
or “viral marketing” helps activate the process of
the diffusion of innovations.
MKT500_5_1_Ed-18: This figure shows the
diffusion process as a normal curve and partitions
the customer base into five groups.
MKTSOO_5_1_Ed-19: Click the sections of the
Diffusion of Innovation figure to learn more
about each group.
MKT500_5_1_Ed-20: The innovators are the
first three to five percent who like to try new
ideas and are willing to take risks.
MKT500_5_1_Ed-21: The early adopters are
the next group, or the ten to fifteen percent who
are even more influential as opinion leaders,
primarily because they are a bigger group.
MKT500_5_l_Ed-22: The early majority, who
make up thin’-four percent, are more risk averse
than the first two groups.
MKT500_5_l_E,d-23: The late majority, who
make up thirty-four percent, are even more
cautious, often older and more conservative, and
wish to buy only proven products.
MKT500_5_1_Ed-24: The final group, the
laggards or non-adopters, who account for five
to fifteen percent, are the most risk averse. They
Slide 6 Interaction
are typically skeptical of new products and
stereotypically lower in income.
Slide 7 Scene 1, cont. MKT500_5_1_Samantha-11: And the
innovators are who we want to target with our
[Ed, Samantha — Ed’s Office] advertising, PR, and social media during our
launch. Correct?
MKT500_5_1_Ed-25: Absolutely. In fact, I have
a formula right here that I think will be helpful for
a successful launch.
Disphn’Jornnilu here:
n1 = [ p + q (N — i / M)] (M — N1 — 01 SCPCL’Il)
i) In the equation given in the figure, we are trying
to forecast 11 subscript t, which is, the number of
units we will sell during time period, t. N
subscript Tminus one represents the number of
units we have sold so far, or cumulative sales in
units .Mis the max on the likely market potential.
The term on the right, .41 — N subscript t nuims
one, means “how we are doing so far?”: what is
the difference between what we could sell. M, and
what we have sold so far, which remember, is N
subscript t minus one. p is called the coefficient
of innovation—it’s the likelihood that someone
will buy or adopt the new product due to
information obtained from the marketer. q is the
coefficient of imitation—the likelihood that
someone will buy or adopt the new product due to
word-of-mouth information obtained from
another consumer.
MKT500_5_I_Samantha-12: Hmmm. . .1 can
think of two different ways we can use this
diffusion model. First, we can observe early sales
data, fit the model, and make predictions about
the future. Alternatively, we can use past results
on products similar to ours and plug in those
numbers to make predictions about the future
even before launching the product.
MKT500_5_1_Ed-26: That’s correct, Samantha!
The imitation effect, or q is usually bigger; p in
ratio to q is about one to ten. The percentage of
innovators and early adopters, the customers who
are drivingp, is about ten to fifteen percent of the
market, whereas the remainder of the market is
eighty-five to ninety percent, and they are driving
q. We can speed up innovators; that is, make p
bigger, by introducing price decreases early, or
speed up imitators; that is, make q bigger, by
introducing price decreases later.
We need to interact with our customers
throughout these phases. During the new product
launch, we will heighten awareness through
advertising.
In the diffusion process, word-of-mouth increases
the size of q, the imitation effect. Thus based on
our formula. we need to do a lot of buzz
marketing aimed at innovators and early adopters,
which comes by the way of our website and PR.
MKT500_5_1_Samantha-13: This is excellent
research, Ed, and I believe that Carl will be
impressed with your efforts, but how do we know
that our new tablet is hitting the mark and will be
accepted in the marketplace?
MKT500_5_1_Ed-27: Well, we began our new
product plan internally, by identifying the
corporate and marketing missions and objectives
to be achieved via the new product or service.
We’ve been careful to remember that customers
are important in the feedback they provide in the
new product development process.
However, a number of factors influence the
customers’ acceptance of new products and the
diffusion of the innovation throughout the
Scene 2
[Ed, Samantha, Carl —
Conference Room] Ed and Samantha meet with Carl
in the conference room to share
the next steps for the tablet
launch.
marketplace. Consumer acceptance tends to be
higher when the new product:
A. Has a clear relative advantage over
existing products
B. Is compatible with the customer’s lifestyle
C. Is not overly complex, or the complexity
is masked by a user-friendly interface
D. Is easily tried or sampled, to facilitate
initial assessment
MKTSOO_5_1_Samantha-14: I see. Utilizing the
factors of compatibility tends to make acceptance
of innovations better, so I’m convinced that this
will help make the launch of Golds Reling’s new
tablet very smooth.
MKT500_5_I_Ed-28: Exactly. We had better
start organizing our data if we want to be ready
for our update meeting with Carl this afternoon.
MKT500_5_1_Samantha-15: You’re right. Let’s
get started.
MKT500_5_2_Ed-1: Hello, Carl. I hope you had
a good lunch. We have a lot to share with you
regarding the product life cycle of our new tablet.
Much like the personalities of people, the product
life cycle and thediffusion of innovation process
will vary. Some companies are innovators,
whereas others are reactors. Golds Reling is an
innovative company.
MKTSOO_5_2_CarI-1: I agree.
MKT50052_Ed-2: Our research shows that the
first to market is often the first to fail because a
new concept takes a while to sink into the minds
of customers. By comparison, first movers may
have advantages in launching new products
because there is less risk. In either case, after the
first to market, the next few “early follower”
firms have approximately the same survival risks
—
Slide 8
)
when launching either totally new or
incrementally new products. Next generation
products such as ours are easier to launch because
there is an existing customer base, channels of
distribution, and much more predictability.
MKT500_5_2_Samantha-1: So, based on our
research after completion of the test marketing
process, prior to our launch, this data will be used
in an attempt to predict the tablet’s likely success.
If the predictions of sales are not promising, this
stage is the last opportunity for Golds Reling to
abort before launching. If the predictions are
promising, we will proceed to commercialize.
Here is the formula that we will use to make our
predictions.
Slide 9 Interaction MKT500_5_2_Samantha-2: Click the segments
of the equation to learn more about sales
Click the segments of the predictions.
equation to learn more about
sales predictions. MKT500_5_2_Samantha-3: We have
constructed a forecasting model, and it will be
$SP = MP x P1 x Pr. used to estimate the sales potential, or dollar sign
S.P.
MKTSOO_5_2_Samantha-4: The first estimate
needed for this is market potential, known as
M.P., which is how many units we might possibly
sell. We will use some data from our previous
launches to decide on potential unit projections.
Secondary data or other relevant benchmarking
data are also used.
MKTSOO_5_2_Samantha-5: Next, P.1., the
estimate of the purchase intention, or the
likelihood that the target segment will buy the
product, has to be determined. This number
comes from the most recent marketing research
that was conducted.
MKT500_5_2_Samantha-6: Finally, the
component we need to consider which is under
our control is Pr., the price the company intends
to charge. All of these components are put into
the equation: dollar sign SP equals market
potential times purchase intention times price
charged.
Slide 10 Scene 2, cont. MKT500_5_2_Carl-2: This is very impressive,
and Golds Reling is in good hands with both of
[Ed, Samantha, Carl — you in charge of this launch. I’m eager to see your
Conference Room] plans for the next steps of setting the price and
determining the distribution channels. Good
work!
Slide 11 Interaction – Check Your MKT50052Ed-3: Select the answer that best
Understanding. completes the sentence.
Select the answer that best
completes the sentence.
During the introduction stage of
the product life cycle, sales grow
slowly and
A. competition becomes tough
B. profit is minimal
C. more product is needed
D. advertising expenditures are
low.
B. the promotion is complete.
A: Incorrect Feedback:
Competition becomes tough in
the growth stage.
B. Correct Feedback: Profit is
minimal because the company
has invested heavily in research
and development.
C: Incorrect Feedback: Product
development has already
occurred.
D: Incorrect Feedback:
Advertising expenditures are
really high during the
introduction stage.
F: Incorrect Feedback:
Promotion is a big part of the
growth and maturity stages.
Slide 12 Scene 3 MKT500_5_3_Samantha-1: I’m glad Carl
appreciated the research we’d done for each stage
[Ed, Samantha — Hallway] of the tablet’s product life cycle. I really do
believe that with the right strategies, Golds Reling
will be able to achieve both top-of-the-mind and
spontaneous brand awareness with the new tablet.
MKT500_5_3_Ed-1: I agree. With buzz
marketing. we’ll attract the innovators and early
adapters that we identified in the difthsion model,
and we’ll be able to successfully penetrate the
market.
Remember that we have an c-Activity and the
weekly threaded discussion on new product
development and the product life cycle where
we can discuss this further. See you next week

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