Product Example of a Test Market - Assignment Example

Marketing Find a recent example of a test market. What product was test marketed and what were the results of the test market? McDonalds, with its multiple locations world wide, have the ability to carry out test marketing in their own stores. An example of test marketing carried out by McLobster. McDonalds were looking for what was missing in the Canadian marketing. McLobster passed the initial screening stage that aids in the spotting of good ideas and rejects poor ones (Mills 34). The product concept was next, which involves a detailed version concerning the idea in terms that the consumer can understand. Next, it was turned into a product image at which stage it became more than a description and a physical representation was created. Eventually, the product got to the stage of market development where the parent company described its target market, the market share, the sales, planned value proposition, and their profit goals. Finally, McDonald carried out a business analysis on the product through a review of its profit projections, costs, and sales to define if it fits into their company objectives. After this stage, the product was pushed to the product development, where they created McLobster. They consulted specialists in seafood. Finally, McDonald performed their test marketing by bringing McLobster, as well as its marketing program, into the real market conditions. At this point, they offered McLobster to its target market at particular locations. Test marketing for a company like McDonald is quite easy since they experimented with a product like McLobster at their own restaurants by carrying out local and small promotions and offering it under “NEW” on the menu. However, McLobster was not profitable enough for McDonalds to commercialize it, although, it is given as a seasonal product (Mills 35). Find and include 5 examples of recent new products that failed. Why did they fail? New Coke Cited as one of the most notorious brand missteps of all, it was launched buy Coca Cola in the mid-80s in an attempt to stay ahead of its competitors during the famous “cola wars”. It was introduced in a way that made regular coke drinkers feel like they did not matter to the company, which led to a product boycott (Haig 23). Crystal Pepsi This cola was introduced in the early in 90s and had no lime/lemon flavor unlike other clear and carbonated drinks, although it also did not possess the usual flavor prevalent in colas either. The soda, despite an expensive and glitzy media campaign, failed to catch. They lost millions trying to guess at straws and have not fully recovered yet (Haig 40). This error has informed most competitors not to change acceptable norms like cola colors. Arch Deluxe This burger was launched by McDonalds at a cost estimated to be >$150 million in 1996 as a massive promotional campaign. The company hoped to spin it into a sophisticated option for adult consumers. However, it failed terribly in the fast food market. An article in the NY Times cited this product as the leading cause of sluggish financial growth for McDonalds in 1997 first quarter (Haig 49). Ben-Gay Aspirin Possessing a strong name behind a product is not a guarantee for success. In fact, it can be a hindrance, especially if the brand is too tied to one product. Known for its unique smell and its warm, burning sensation on the skin, Ben-Gay was not a good fit for aspirin packaged by Pfizer decades ago. While they were designed to relieve pain, people could not get around swallowing something that they associated with a sensation of burning (Haig 50). The mistake came in attaching its name to a product that was not in character. The Zune Introduced in 2006 by Microsoft, it immediately faced comparisons with the iPod and the fact that it only used software from Microsoft. In 2008, it was announced that it had made losses of $100 million, blamed on constantly changing software and iPod’s years of experience in the market (Haig 52). Find an example of bundle pricing. Explain what the regular price would be if you bought each product individually. What is the price of the group of products (the bundle)? Would you save money? What was the rationale behind grouping those products or services together? Walmart gives a perfect example of bundle pricing for products through the way that they sell various consoles for video games. For instance, the company’s “Xbox 360 Super Elite 250GB Bundle” includes various products. These are inclusive of a final fantasy face plate, a standard definition composite A/V/ cable for the Xbox 360, an Ethernet cable, a wired headset for the Xbox 360, 2 wireless controllers for the Xbox 360, a 250GB hard rive for the Xbox 360, final fantasy XIII, and a Xbox 360 console (Mills 54). The entire package retails for $399, which saves the customer approximately $35 compared to buying this items one by one. Walmart took advantage of the fact that customers that wanted to buy a Xbox 360 would also need to buy the other items, or at least some of them, at one point in the future. By electing to sell all the products together packaged as one, Walmart made sure that they would at least get some profit from selling every one of these items instead of letting them buy final fantasy XIII or an extra controller from Gamestop or Bestbuy after they had bought the initial product (Walmart Mills 55). The bundling process also gives the consumer added value by saving them time and money through letting them buy all the items at the same time. What are the top 5 retailers in the world in 2011? What country are they from? What countries do they have stores in? What are the names of the stores they use in different countries? The biggest retailer globally is Walmart, operating in over fifteen countries with over 8,500 stores and using over fifty-five different names (Krafft & Mantralla 28). In the US, they operate under the name Walmart in all the states and Puerto Rico. In Mexico, Walmart operates under the name Walmex while it operates under Asda in the UK. In India, they are known as Best price, and Seiyu in Japan. Walmart also has wholly owned operations in Canada, Brazil, and Argentina. Their business ventures in South Korea and Germany proved unsuccessful, however. In second place is Carrefour S.A., a French retailer that has its HQs in the Greater Paris region of Boulogne, Billancourt in France (Krafft & Mantralla 29). It had over 1,300 hypermarkets. The company mainly operates Saudi Arabia, United Arab Emirates, Dominican Republic, Colombia, China, Brazil, Argentina, and Europe. It also runs shops in some parts of Asia and Northern Africa where most of the stores are not as big as hypermarket. Almost all stores around the world are named Carrefour. In third is Metro AG, which is a German retail, cash and carry, and wholesale group with its HQs in Dusseldorf, in Germany (Krafft & Mantralla 30). The company holds the largest market share in Germany. In the UK and other European countries, it goes by Makro and Metro Cash and Carry while, in Germany, they go under the name Real. In Belgium, they go under the name Galeria Kauhof while its electronics shops in Europe go by Saturn and Media Markt. Tesco PLC comes in at 4th and is based in the UK, in Cheshunt. They have stores in the Czech Republic, China, Hungary, Japan, Ireland, Poland, Malaysia, Turkey, Thailand, South Korea, Slovakia, and the US (Krafft & Mantralla 30). It usually goes by the name Tesco, although, in some countries, it enters joint ventures, for instance, Tesco Lotus in Thailand and Charoen Pokphand, in South Korea. Finally, Kroger Co comes in at 5th with its HQs in Cincinnati and maintains its stores in most states, in America. It does not have stores outside the US (Krafft & Mantralla 31). Find 2 examples of viral marketing. What brand or company was being promoted? What techniques did they use? The Subservient Chicken viral campaign was created to promote Burger King’s Tender Crisp sandwich (McDonald 90). The program featured print, TV, and most importantly, a viral marketing website. The viral campaign involved a subservient chicken character appearing in an advert named subservient chicken vest. The viral commercial featured a man in his sitting room directing another man wearing a chicken suit to behave in the manner he wanted him to behave. The subservient chicken character was so successful that it was used in other promotional campaigns. The Big Word project was a website that was created by Lee Munroe and Paddy Donnelly at the University of Ulster in Northern Ireland. The project, launched in 2008, was aimed at redefining the dictionary using websites (McDonald 101). Users could buy any word from a list of over one hundred and seventy at one dollar per letter with the word being linked permanently to a URL of his/her choice. The project added over 2000 words and saw thousands of visitors in its first week. The project was initiated as part of the creators’ Multi-disciplinary Masters Course, drawing on Paddy’s experience in viral marketing and Lee’s knowledge in web usability. The project used viral marketing by relying, on bloggers, to spread the word of its existence on the internet, being featured in numerous blogs around the world. After interest had cooled in mid-2009, a glowing report on the site by popular blog Fire Ball that was picked up by other blogging sites raised its profile again to even higher heights than before (McDonald 101). How are consumers using /responding to social media advertising? A study carried out by IDG Research reported that 95% of consumers utilize at least one social media platform. 44% of the surveyed correspondents reported that being exposed to technology products on social media had an effect on the likelihood that they would purchase a product (Close 34). A further 40% said that they were loyal to brands that they dealt with on the social media platform. Additionally, 42% said that they were willing to recommend technology brands to others if the firm’s presence on social media affected them positively. Consumers normally look for marketers that answer their questions regarding the products by answering their questions on forums like Facebook. Consumers will also seek out information on product reviews from social media (Close 35). Tablet users purchase products on their devices through social media forums. Mobile devices and social media have converged to influence the way in which consumers can receive and give information on products, as well as for shopping. Find 2 recent articles on the new or proposed changes to labeling laws in the US. Summarize what the labeling law changes are likely to be. The federal Trade Commission is looking for public comments regarding changes proposed, by the agency, to eliminate requirements. These are unnecessary, on companies that sell fur products in order to allow them increased flexibility regarding labeling, as well as to update the guide on product names on furs that list common names of animals that are allowed on fur labels (Federal Trade Commission 1). This is according to an article, FTC Proposes Changes to its Fur Labeling Rules that appeared on the Federal Trade Commission website. The proposals are meant to act as part of a review regarding the name guide that is required by congress under the FTC’s systematic rules and guides review, as well as under the TFLA. The product is part of the campaign by the FTC on fur labeling and advertising. This helps consumers to be informed by requiring the retailers to label products using information like the name of the animal and its country of origin (Federal Trade Commission 1). In the article US Agencies propose Changes to Food labeling Standards, a public consultation seeking to eliminate the regulations for food labeling such as processing and packaging methods used by processors and manufacturers (Food Production daily.com 1). Three federal agents in the US who are responsible for standard regulation launched it. The alterations were necessitated by recent advances in technology for the food industry and to bring the US in harmony with international standards. The alterations are meant to promote consistency, brevity, and simplicity in American food standards (Food Production daily.com 1). Find an example of a product in each stage of the Product Life Cycle (Introduction, Growth, Maturity and Decline.) Explain why they are in that stage Introduction Phase The new Beats by Dr. Dre pill speaker is in its introduction phase as consumers have just heard about it. The product has a high price in order to recoup their initial expenses, which have been sunk into marketing the products (Stark 25). The product has just appeared in print and electronic media in adverts. Growth Phase The iPad is now in its growth phase as its sales and profits are on an upward trajectory. The price has still not come down, and the quality is still the same. Apple has also increased its distribution based on positive feedback from consumers (Stark 29). Advertising has also increased visibly. Maturity Stage Beats by Dr. Dre Monster headphones are in this stage as competition in the market has increased as other companies come up with similar products. The price has also come down, and new features to differentiate from other products, for example, adding an online music store to its portfolio (Stark 30). Decline Stage The iPod is in its decline stage as newer technologies like music store enabled headphones come into the market. The prices have decreased drastically with fewer resources being used on promoting the product (Stark 32). Works Cited Close, Angeline. Online Consumer Behavior: Theory and Research in Social Media, Advertising, and e-tail. London: Routledge, 2012. Print. Federal Trade Commission. FTC Proposes Changes to its Fur Labeling Rules. 9 July 2012. Web 11 December 2012 www.ftc.gov/opa/2012/09/furproducts.shtm>. Food Production daily.com. US Agencies propose Changes to Food labeling Standards. 20 May 2011. Web 11 December 2012 www.foodproductiondaily.com/Quality-Safety/US-agencies-propose-changes-to-food-labelling-standards?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright Haig, Matt. Brand failures : the truth about the 100 biggest branding mistakes of all time. London : Kogan Page , 2011. Print. Krafft, Manfred. & Mantrala, Murali. Retailing in the 21st century: current and future trends. New York : Springer , 2011. Print. McDonald, Kelly. How to market to people not like you : "know it or blow it" rules for reaching diverse customers. Hoboken : John Wiley & Sons , 2011. Print. Mills, Gordon. Retail pricing strategies and market power. Melbourne : Melbourne University Press , 2012. Print. Stark, John. Product lifecycle management : 21st century paradigm for product realisation. New York: Springer, 2012. Print. Read More