Download Marketer is faced with 2 options when using price for positioning

Marketing and Product Development
Market research reveals
What consumers want and points towards
opportunities
2 questions before developing
a new product:
1. can we produce it
2. can we sell it
Production team answers:
1. can we produce it
2. costs
For many businesses product Once the business is underway
development is infrequent
In the case of most successful An ongoing marketing activity
businesses product
development is
Cooperation between
marketing and production is
complex and constant
Feasibility study
To determine if a business opportunity is possible,
practical and viable
Who performs feasibility
studies
All businesses
Invention or Innovation
Product development begins An idea that is based on solving a problem for
with
consumers
“Necessity is the mother of invention”
Inventions are
New devices, methods or processes developed from
study or experimentation
Businesses use invention to
Create original solutions to consumer needs
Innovation is
A product or service that uses new technology, items,
or process to change:
1. existing products
2. methods used to produce products
3. ways to distribute them
There are many more
Innovators than there are inventors
Most innovations develop as Competitive market
a result of the
Example
Tracking packages for shipping
Stages of Product Development
Inventors tend to
Sell or license their ideas to others who know how to
develop products for the marketplace
Innovators on the other hand marketers
are more likely to be
Stages of product
development
1.
2.
3.
4.
idea generation
idea screening
concept development
market strategy
5.
6.
7.
8.
feasibility study
product design
test marketing
Market Entry
Prototype
Sample of what the product might look like and operate
Market strategy discovers:
Primary and secondary market
Feasibility is closely tied to
what other stages?
Product design takes into
account the preferences of
1. market strategy
2. product design
Primary market
Test marketing often includes A survey
Product Development and Utility
Utility
What is added to the product to make it valuable on the
market
Utility affects
The value equation by providing consumers with
something they did not have before
Types
1. form
2. information
3. place
4. time
5. possession
Function
What the product is intended to do
Form follows function
means:
The product’s looks will be dictated by what it’s
intended to do
Components of the Form
Utility
1.
2.
3.
4.
5.
6.
material
scent
flavour
colour
design
packaging
Information utility
Provides consumers with instructions, directions,
manuals
Place utility
Makes it possible for consumers to purchase the
product
Time utility refers to
Making the product available when consumer needs it
Possession Utility
When they are easy to purchase
How can we increase
possession utility
1. payment plans
2. lower price
.1 - Positioning and Branding
“Perception is Reality”
Positioning allows us to
Create an image, the outward representation of the
person we want to be
Positioning by others can
lead to
Misunderstandings and limited choices
Marketers too make choices How to position their product or service
about
These choices mean
That the brand will appeal to some people and not to
others
6.2 - Types of Positioning
5 Types of positioning:
1.
2.
3.
4.
5.
Benefit
target
price
distribution
service
Benefit positioning
Customers want the product they buy: to do something
for them
Often a company will
position its products or
service as being
One that offers consumers more benefits than
competitors
Problem with benefit
positioning
Competition can do the same
Price Positioning
Marketer is faced with 2 options when using price for
positioning:
1. cheapest
2. most expensive
If a marketer chooses a price in the middle range, they must use a different
positioning strategy!
A luxury good offers
Status more than quality
Consumers of luxury
products want
The product to be expensive
Examples of luxury items
1. caviar
2. diamond watches
3. expensive ties
Many consumers are
willing to pay high prices
for
Quality
Manufacturers who use
price positioning with the
promise of quality must
Be sure to provide it
It is possible that if a
The product is of inferior quality.
product boasts the same
features but less expensive
consumers will think
Distribution Positioning
Examples:
1. Avon
2. Amazon
Service Positioning
Examples:
1. convenience stores
2. free installation
Ikea uses price and service Low price, less service because products not assembled
in combination.
6.3 How to Position a Product
The initial positioning
premise
Marketers have to be prepared to alienate some
consumers
Businesses may decide that It doesn’t want!
there are some consumers
Some companies try to be Examples:
all things to all consumers
1. nike
2. apple
3. Car manufacturers
Clear and coherent
positioning
If consumers don’t know: they won’t go!
A company that does not
position its product in a
distinctive manner will
discover
Consumers have no reason to choose it over a competitors
6.4 Branding
Business creates a brand
for a product to give it
A distinct identity
Why?
To keep consumers from confusing it with
competitors
Product Differentiation
includes
1. branding
2. advertising
3. positioning
A brand consists of
Includes:
Commodities
All the features that make up the product’s image
1. name
2. logo
3. slogan
Unbranded products
Why don’t farmer’s need to They sell stuff like potatoes, lettuce…all the same
engage in marketing
activities?
Commodity marketing is
usually conducted by:
Marketing boards
Marketing boards try to
Increase the overall consumption of the commodities
Brand Names
Corporate dominant
1. corporate dominant
2. product dominant
Examples:
1.
2.
3.
4.
5.
Product Dominant
Roots
Mastercraft
President’s Choice
Kelloggs
Nike
Examples:
1. Zest
2. Kodiak
3. Luvs
Logo
Symbolic ways to create a brand
Includes:
1.
2.
3.
4.
5.
trademarks
trade names
brand marks
logotypes
symbols
3 types of logos:
1. monogrammatic
Example:
2. Visual Symbols
Example:
3. Abstract Symbols
Example:
Slogans
Short catchy phrase that is always attached to the
company’s name and logo
How many words should a 7
slogan have?
Brand Strategies
Brand Strategies
1.
2.
3.
4.
5.
Support
Develop Extension
license
co-brand
acquire
Once a brand has been reposition
positioned it is very hard
to
When is it feasible to
change?
Introducing into foreign market
Brand Extension
Capitalize on other brand’s success
Examples:
1. coke/diet coke
2. Humpty Dumpty chips/Cheezys
3. Nike apparel/golf clubs
Licensing: similar to
Brand extension but for a fee license to other
companies
Famous people even
license
Themselves
Co-Branding: when two Or more brands combine
Acquisition of a
successful brand
If you can’t beat ‘em, buy em!
– Branding for International Markets
The Internet connects
3 choices when going
international:
Consumers and businesses around the globe
1. leveraging positive reputation and use the
same brand identification
2. rename to reflect local culture and market
preferences
3. acquire local brand
Factors when choosing:
1. Centralized or not? If centralized, stay the same
Glocal means:
Thinking global but acting local
2. Expansion Strategy If wants to go global, build on original, but if wants
limited trade, acquire or rename
3. Corporate Identity
Strong international identity would lead to keeping it,
otherwise change or merge
4. Similarity of
Products
If the product mix is narrow it is easier to push it into
foreign markets
5. Similarity of
markets
The more similar the market is to your own the easier
it is to push the same product
6. Competition in
foreign markets
Joint ventures or buyouts best if heavy competition
exists
7. Cultural
Associations
If bad blood exists, use different brand or
acquire/merge
8. Changing Dynamics Brand can be local one day and international the next